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Alternative Payment Systems

Consumers are steadily shifting farther from cash payments in favor of various alternative payment services. Not surprisingly, there are tons of options in the marketplace today for payment services. You more than likely use at least one type of alternative payment service and never even notice it.

What are Alternative Payment Services?

Alternative payment services are things such as digital and virtual wallets that allow consumers to pay for goods and services without cash or other traditional payment methods. These services almost always include a mobile app for your phone that can be connected to your bank account or credit card. These services provide fast, secure payments for consumers, which is the key reason we use them.

These types of services can be categorized into a few subsets for easier understanding. Those subsets include:

  • Mobile Payment Services
  • eWallets
  • Improved Banking Services

In this article, we’re going to briefly look at each type of service and consider their similarities and differences. There is not necessarily one option that is better than another, so we will focus on features instead. Each consumer and business will choose their service based on needs, which are not universal to all.

Mobile Payment Services

The following mobile payment services are gaining popularity in the marketplace. Consumers can use these applications to send and receive money from friends, family, and others with whom they conduct business. Here’s a breakdown of each one.


Venmo requires a mobile application on your smartphone to initiate transactions. When you initiate a payment, you can choose what type of payment it will be and search for the person to whom you are sending money. The recipient of the funds needs to have a Venmo account, as well.

Venmo has a desktop application, but you cannot initiate payments there. It is designed to be exclusively mobile and has a robust mobile app for this purpose. It also has a social component to interact with other users, but no one really knows why!


This app is very similar to Venmo in that it is designed to be 100% mobile. You can operate the application from your smart phone and send peer-to-peer funds. It is typically connected to either your bank account or a credit or debit card from which the funds are deducted.

CashApp differs from Venmo because you can get a debit card that is connected to the account.

Consumers who want to use a physical debit card can order one from CashApp. Using the card at retailers and ATMs will deduct money from the balance of the CashApp account and/or the connected bank account.


Zelle requires a bank account to be able to send funds, which is a little different than the other apps mentioned above. With Zelle, you cannot use a credit or debit card to fund the account. It must be connected to a bank account.

It is similar in all other ways, and functions just like the other apps. You can send and receive money through the application on your phone. It is used only for peer-to-peer payments.


Many eWallet solutions have also emerged from this revolution in the industry. These alternative payment services differ from those listed above because you can pay businesses in addition to friends and family. Here’s a brief description of some of the key players in this space.


This is the most robust of the eWallets listed in this post. PayPal has been in the game longer than the others and therefore has had the time to fine-tune their services. With a PayPal account, you can send money to friends and family, but you can also pay businesses for goods and services.

PayPal is a prominent payment option on many websites with virtual terminals. It also offers payment services to businesses, complete with invoicing and reporting functions. As a consumer, you can request an invoice from a business, click on the link in your email, and pay it through PayPal. It’s a very comprehensive solution for payment services.


Stripe is another popular payment service provider. It is specifically designed for businesses to accept payments from customers. As a consumer, there’s not much that Stripe can do for you in terms of sending money to friends or family.

Stripe recently expanded its services to include a money transfer option, but it is still geared towards businesses. This feature allows a business to create an invoice for a third party and send money from the buyer to the seller. However, this does not equate to the ability of an individual to send funds to a loved one.

Apple Pay

This application allows iPhone users to pay for goods and services using only their phone. To setup Apple Pay, you can download the app from the app store. Most new iPhones come with Apple Pay already installed, but if not, you can just download it.

After downloading the app, you can connect your debit or credit card and you’re good to go. This allows consumers to tap their phone against eligible payment terminals in brick-and-mortar stores, rather than carrying their physical cards or cash. It also recently added the functionality to allow users to send money to friends and family.

Google Pay

Google pay is the equivalent of Apple Pay and is often used by non-iPhone users. It has the same capabilities and is a little bit faster. It can process transactions in a shorter amount of time, which is a bonus for those impatient consumers out there!

Google pay users can pay businesses for goods and services, and also send money to loved ones through the same app. It is a mobile application that requires a bank account or debit/credit card to be connected.

Improved Banking Services

In an effort to keep up with technology, banks have started improving their services, as well. There are a variety of options available through your banking app that you may not be aware of! Here are a few of the key features you should check out.

Same Day ACH

An ACH payment is basically a direct deposit. They used to take 7-10 business days, but have been drastically improved in response to all the alternative payment services on the market. An ACH now can happen in as little as 24 hours, which is a huge improvement over what it has been historically.

ACH payments can be used to send money between loved ones. They can also function as an option for business-to-business transactions. Many businesses are starting to use ACH payments to pay their vendors, rather than cutting physical checks.

Remote Deposit Capture

If you’ve ever deposited a check through your bank’s mobile app, you’ve used this service. Remote deposit capture allows consumers to digitally scan a paper check into their banking app. The deposit is then sent electronically to the bank where it goes through the appropriate channels to be deposited.

This technology has been around for many years but has been significantly improved. Consumers can use this option for personal or business transactions, as long as their banking application has this functionality. To take advantage of it, simply download your bank’s mobile app, create an account, and find the “remote deposit” function.

Instant Interbank Transfers

This type of transfer occurs automatically and is available only when both banks in the transaction have the capability to process it. Instant interbank transfers can move money from one account to another, seamlessly and almost instantly. The great thing about this is that they can take place on weekends and holidays, unlike traditional transfers.

This function can be used to send money between individuals or businesses. Federal banking institutions have taken steps to enroll in this system to better service their clients. The catch is that both banks involved in the transaction must be enrolled for it to be instant.

Final Thoughts

As society continues to move away from cash transactions, the banking and tech industries are

challenged to be innovative and thoughtful in how they respond. The competition is fierce and that’s a great thing for consumers!