Alternative Methods Of Payment (AMOP)

What are Alternative Methods Of Payment (AMOP)?

Alternative methods of payment are means of making a payment other than cash. Alternative methods of payment (AMOP) include payments made using a credit or debit card, loyalty program points, cryptocurrencies like bitcoin or virtual wallets like Google Pay or Apple Pay. Another popular AMOP is Venmo.

Understanding Alternative Methods Of Payment

Alternative methods of payment (AMOP) including credit cards, debit cards and loyalty points have increased rapidly in the past decades. Most businesses accept non-cash options in transactions, as consumers find it more convenient to use a card rather than to carry around cash.

This also allows for a seamless transaction on the back end for the business. Many credit and debit cards are becoming contactless, which makes the transaction quicker than the old ways of using a card. Compared to cash, the transactions are much quicker compared to years past. The time it takes to count money to hand to a merchant, followed by the merchant counting out the change, can be costly in terms of time spent.

Businesses that accept alternative methods of payment often have to pay for the privilege. For example, card companies charge a fee such as a percentage of the sale, each time a credit or debit card is used in a transaction. A minimum fee may also be charged in the case of small transactions.

In some cases, businesses will allow a consumer to pay for a purchase by adding the amount owed to another bill. For example, a cell phone company may allow a customer to add the amount owed on a new phone to the monthly phone bill. This allows the customer to spread the cost of the phone out over several months, while also allowing the cell phone company to get the customer to sign a contract.

Examples of Alternative Methods Of Payment

Frequent flyer programs are an example of alternative methods of payment. Rather than pay for the cost of a flight with a credit card, the cardholder will use points that have accumulated from using the card to make other purchases. The value of the points are defined in the cardholder agreement.

Loyalty programs are another form of alternative methods of payment. For example, a restaurant patron may receive bonus points for each dollar spent. The restaurant may offer discounts on food and beverages according to how many points the patron has accumulated. This is an increasingly popular method of AMOP for restaurants that create payment applications for mobile devices.

Cryptocurrencies as an Alternative Method of Payment

The alternative method of payment space has undergone a transformation since the debut of Bitcoin in 2009. Bitcoin is an example of a cryptocurrency, or an electronic currency that uses cryptographic technology to ensure that the payment is safe and secure. Bitcoin and other cryptocurrencies have received widespread attention in the media and from investors, many of whom speculate in cryptocurrencies in an attempt to get rich.