6 PayPal Alternatives for Business Owners

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    Today’s business landscape is increasingly becoming digital, which is reflected in the growing number of payment methods for online shopping. This means that streamlining the payment process for customers is essential, along with working with a secure payment gateway. 

    One of the most popular payment providers trusted by businesses is PayPal, but SMBs need to know that there are plenty of sites like PayPal out there that might work better for them. Each option has its own unique strengths and drawbacks, so it’s important to see which features are a priority for your business. 

    Why Choosing the Right Payment Provider Is Necessary   

    Choosing the right payment provider from ​​these other sites like PayPal can help your business make the most cost-effective decision in terms of security, contract terms, and included features. 

    The Drawbacks of PayPal  

    While PayPal has some major benefits, including a highly recognized brand name and strong encryption, there are websites like PayPal that provide a better experience in some areas. Some areas of improvement that can be addressed by the company include:

    • The relatively high transaction fees of 3.7% and 30 cents that PayPal alternatives don’t charge as much for
    • The lack of protection for businesses that sell digital goods and services
    • The occasional freezing of accounts can last up to 6 months or more with no notice
    • The long length of time it takes to withdraw funds to your bank account (between 3-5 working days)
    • The prohibition of payment processing with high-risk businesses according to their Acceptable Use Policy
    • The lack of operation in some countries, although it is available in over 200 countries worldwide

    PayPal Alternatives You Should Know About  

    If you’re looking for websites like PayPal that provide a similar experience, you can find more affordable options that are significantly more cost-effective. There are plenty of PayPal alternatives that provide additional features that can influence the success of your business. 

    Square 

    One of the best credit card processors that provide a PayPal like service is Square. They provide transparent fees and help your business avoid long-term contracts that can be costly.

    Square’s Pricing 

    Square charges a flat rate processing fee of 2.6% + 10 cents per transaction on all contactless payments made through the platform, swiped payments, and chip payments. On the other hand, it costs 3.5% + 15 cents per transaction for manually entered payments.

    Square’s Features 

    Square’s major perks include a free online store to showcase your products, invoice creation, a virtual terminal, inventory management, CRM, plenty of shopping cart options, a free domain, and mobile POS solutions.

    Monthly add-on options include payroll, appointment booking, automated reminders, no-show protection, and more. 

    Square’s Drawbacks 

    Although Square provides plenty of features for small companies, it is not ideal for companies dealing with a large volume of transactions since fees can add up. Like PayPal, it also isn’t the right choice for those in high-risk industries. 

    Wise 

    Wise’s PayPal like service helps reduce the cost of currency conversion fees by allowing customers to hold multiple currency options and withdraw different ones, with very low rates. 

    Wise’s Pricing 

    In terms of pricing, Wise provides affordable rates for international transactions. This usually ranges between 0.4% and 1.4% of the total transfer amount, along with mid-market exchange rates that don’t come with a significant markup. You can use their fee calculator online to estimate any fees you may have to pay. 

    Wise’s Features 

    Wise allows users to create an account online easily, and there are no minimum transfer amounts required per transfer. They are known for their excellent and responsive customer service and support, and their fees are generally transparent and available for reference online.

    Their main strength is avoiding expensive international transaction fees and exchange rates that businesses may face, especially for traditional bank accounts. 

    Wise’s Drawbacks 

    Although Wise has many strengths and does international transfers better than PayPal, they charge a top-up fee based on the currency. While it is free to deposit EUR and GBP, you may have to pay to deposit USD. In addition, those who own over €15,000 in EUR balance will be charged 0.4% yearly. 

    PaymentCloud 

    What PaymentCloud does better than PayPal is its ability to deal with high-risk industries. It caters to those considered as high-risk businesses, though this may come with higher fees depending on your credit history and processing needs. 

    PaymentCloud’s Pricing 

    Unfortunately, PaymentCloud doesn’t offer solid pricing details on its websites. This means that you will have to get in touch with the company to obtain a quote for their payment processing services. However, they don’t charge any setup or cancellation fees. 

    PaymentCloud’s Features 

    PaymentCloud is a good PayPal alternative when it comes to the services they provide. They provide payment terminals, mobile terminals, and wireless terminals. E-commerce businesses can also take advantage of virtual terminals that have the ability to process ACH transactions, create recurring payments, and generate detailed analytics and reports. 

    They also allow third-party integration with popular online merchants, including Shopify and Wix, along with online shopping cart software types. 

    PaymentCloud’s Drawbacks 

    It should be said that PaymentCloud’s major weakness is the lack of transparent pricing on its website. You’ll need to receive a quote after application, and their site could be a little more user-friendly in terms of navigation. 

    Stripe 

    Similar to PayPal, One of the top online credit card processors for e-commerce businesses is Stripe. It is used by many top companies, can be easily customized, and is relatively inexpensive and easy to set up, making it a good choice for smaller businesses. 

    Stripe’s Pricing 

    Stripe charges fixed or customized pricing depending on what you’re looking for. The first type has a fixed charge of 2.9% + 30 cents for every successful transaction online. For in-person payments, they charge 2.7% + 5 cents per transaction. 

    You can also choose to obtain a customized rate that depends on the features of your plan. There are no additional monthly fees, setup fees, or cancellation fees, and you can cancel your contract anytime. 

    Stripe’s Features 

    Stripe has many convenient features, including automatic bank deposits, preventing time-consuming account holds. They accept plenty of payment options, including the major credit and debit cards, as well as digital wallets like Apple Pay and Google Pay. 

    They also accept ACH debit and credit transfers in addition to wire transfers, dealing with more than 135 currencies from around the world. With buy now, pay later options, including Klarna and Afterpay, it is a good choice for businesses with global customers. 

    Stripe’s Drawbacks 

    Unfortunately, Stripe’s service is currently only available to businesses based in the U.S. and Canada. They also offer limited functionality for brick and mortar businesses, and their extensive list of online tools may be difficult to use for those without prior experience. 

    Shopify 

    Shopify is another provider similar to PayPal and is a good option for online businesses, especially those with an existing Shopify store. It is easy to use for beginners and those with little to no coding experience. 

    Shopify’s Pricing 

    Shopify’s pricing depends on your subscription plan. The more expensive subscription plans can give you a discounted transaction rate but will only be cost-effective for businesses that sell high volumes. 

    Shopify Basic costs $29 monthly with 2.9% + 30 cents per transaction, while the  Shopify plan is $79 monthly with  2.6% + 30 cents per transaction. Finally,  Advanced Shopify is $299 monthly with 2.4% + 30 cents per transaction. 

    Shopify’s Features 

    Shopify has all the e-commerce features you’d expect, including plenty of themes, hosting, inventory management, shopping cart functionality, social media integration, top-notch security, and more. 

    Shopify’s Drawbacks 

    Like many providers, Shopify isn’t ideal for high-risk businesses. It also charges rather high monthly account fees for all the plans involved, which may not be an ideal choice for businesses that are just starting out. 

    Skrill

    Skrill is another good option for companies looking to lower transaction fees. PayPal’s fee of 4.5% is rather high compared to Skrill’s relatively low rate of 2.9%. 

    Skrill’s Pricing 

    When it comes to pricing, Skrill is one of the lowest on the market. They charge only 1.45% per transaction plus 50 cents to send and receive funds, while transferring money to a bank account comes at no additional cost.

    However, international transfers cost 4.99% per transaction. In addition, withdrawal from a bank account costs $5.50, and the annual prepaid card fee is $10.

    Skrill’s Features 

    Skrill’s set of features include a multi-currency account, speedy one-touch payments, integrations with third-party apps, chargeback protection, security and fraud management, and competitive conversion rates. 

    Customer support is available online in 12 different languages, and they allow users to send payments in 40 different currencies at the moment. 

    Skrill’s Drawbacks 

    Unfortunately, Skrill doesn’t currently serve some companies, including some in Africa and Japan. They also charge an inactivity fee of $5 if the account is not used in 12 months. 

    Frequently Asked Questions

    Learn more about PayPal like services and secure payment methods with some of the most common topics business owners should know about. 

    What is the best alternative to PayPal?

    Some PayPal competitors include Skrill, Square, Stripe, and Shopify Payments. However, the best alternative depends on the needs of your business. 

    Is Venmo owned by PayPal?

    Venmo is currently owned by PayPal, and it provides services similar to PayPal. They acquired Venmo in 2013 from its parent company Braintree. 

    Who is PayPal’s biggest competitor?

    In terms of digital payments, PayPal competitors include Square, Stripe, and Shopify. 

    Is TransferWise the same as PayPal?

    TransferWise provides services similar to PayPal, but Transferwise has an edge when it comes to currency conversions, transfer speed, and fees. 

    What is the most secure online payment method?

    Sites like PayPal and credit cards are the safest way to make payments online since they can employ powerful security encryption and protect customer data efficiently. 

    Although PayPal has plenty of benefits, there are several other companies you can consider, like Wise, Square, Stripe, and Shopify Payments. By doing your research, you may end up with lower fees and more features suited to your business. 

    Read on to learn more about the ins and outs of credit card processing on Processing Card today! 

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