3 Alternatives to PayPal

As soon as you think about online payments, you automatically think PayPal.

PayPal is a great system. There’s no escaping the fact. But to rely on it solely can be a mistake. After all, a monopoly is not a healthy scenario, so you should at least consider diversifying your payment channels.

Why Choose a PayPal Alternative?

  1. Your customers and/ or partners are unable to use PayPal. This is a regular situation, as some people cannot use PayPal for one reason or another or simply refuse to do so. If you don’t find an alternative means, it could mean you lose a customer (or partner, if things are extreme).
  2. Blocked PayPal account. This does happen, and it happens quite often, too. What’s more, it’s been said that PayPal can lock accounts for little to no reason, and that can be a frightening consideration. That said, don’t be tempted to place all your eggs into PayPal’s basket.
  3. The necessity for something safer. If you’re regularly sending or receiving larger amounts, say into the thousands of dollars, then wire transfer or checks can be a safer alternative.
  4. Reduce cost. PayPal is far from being the cheapest around. However, if cost reduction is your main concern, the truth is that your options are pretty limited.

Best PayPal Alternatives

Unfortunately, there is no one best alternative to what PayPal offers, and it really comes down to your needs. If you have a global payment need, then there are a few larger companies that may fit the bill. Otherwise, there are generally quite a number of local alternatives, at least in the U.S. that could prove a better fit if you’re looking to keep payments within a single country. If you’re looking to diversify the way you take online payments, here are three alternatives to PayPal that might work.

  1. Skrill

This company was previously known as Moneybookers. Arguably, it’s one of very few good alternatives to what PayPal offer. It’s mainly targeted to the U.K. and to Europe in general, given that merchant fees are that much more favorable for the continent.

Skrill is accepted by numerous top service providers and websites: eBay, Upwork (previously known as Odesk and Elance), and Skype, to name the three.

It’s also easy to use, which is of course a key factor.

What about Skrill fees? Keep in mind that this may vary, but for now, there’s a maximum of 1 percent sending fee (capped at €10), and no fee for reception. This is good!

In terms of fees on merchant account, it rises up rather steeply, though still not bad. For merchants with over €50,000 monthly volume, in the U.K. the fees are 1.4 percent + £0.20. For non-European merchants, the fees are substantially higher at 3.9% + €0.35 for those who have a monthly sales volume of no more than €2,500.

  1. Google Wallet

Another name changer – Google Wallet was previously known as Google Checkout, and it represents a valid alternative to PayPal, albeit with some features lacking.

The fees are reasonable. You can send money freely if it comes directly from either your Google Wallet balance or your bank account. On the other hand, when sending from a credit card, it costs 2.9 percent on the amount you send. It’s entirely free to receive money.

If you have a very sizable turnover, bear in mind that Google Wallet has limitations. Per single transaction, the limit is 10,000 USD, while over a five day period, you can send no more than 50,000 USD. If you’re sending this amount, it’s probably wise to utilize wire transfer.

  1. Payoneer

The only big difference between Payoneer and the other services that are listed here is that you can create a virtual U.S. bank account. For anyone who is not stationed in the U.S., this can prove more than worthy if you must have money located in a U.S. bank. Do check with a lawyer on this though, if it poses a legal issue within your country.

Payoneer is not cheap to use. Firstly, there’s an annual fee, which is $29.95. Then, for an ATM withdrawal, there’s a fee of around $3. Next, transaction fees, though these vary depending on your locale and the amount.

In spite of Payoneer’s high fees, the company is still popular, and many websites have now embraced it with relatively open arms.

For those with the more intricate need for a business merchant account setup, Dharma Merchant Services is highly recommended.

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About Dequiana Jackson

Dequiana Jackson, Founder of Inspired Marketing, Inc., helps overachieving women entrepreneurs conquer limiting beliefs and create marketing plans that grow their businesses. This includes one-on-one marketing plan development, digital product creation, web design and content marketing. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog, Entrepreneur-Resources.net.

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