11 Best PayPal Alternatives for Small Businesses

When to Use an Alternative to PayPal

Whether you’re a business selling products or services over the internet, or you’re a small to medium-sized enterprise (SME) required to post revenue and cash flow information with the US government, PayPal dominates the online payment scene.

Only recently have other payment systems forced PayPal’s hand on credit card processing business in the US. The new rules require PayPal, along with the likes of Square, Intuit Go Payment and Google Wallet to give merchants more options to protect themselves from credit card theft.

That move has created huge opportunities for tech-savvy payment startups like Stripe and Braintree to grab more business from PayPal as it redraws its business strategy to adapt to the new anti-fraud requirements. At the same time, PayPal is continuing to evolve with other new tactics like revamping its search engine marketing services, streamlining its popular Payflow Pro payments system and continuing to expand its mobile payment options.

Square: Best PayPal Alternative

PayPal is the most widely used online payment method today as it centers around online auctions and purchases, but it does not support daily cash-flow business transactions. So it is a no brainer for entrepreneurs to check out available alternatives for regular transaction transactions.

By drawing a comparison of 11 best alternatives in a chart, I have tried to simplify this matter by identifying the key features and economic costs for entrepreneurs and their customers.

Entry of any online payment provider is usually free and it is one of the best pay as you go online payment method that supports hardware and software uses. For startups and small businesses, it is an ideal service as it does not include any hidden transactional costs such as monthly payment, account setup and monthly subscriptions.

Square is primarily an online payments gateway for small business. It was founded by Twitter co-founder Jack Dorsey in 2009. Recently it has acquired Braintree venture by PayPal. It primarily focuses on mobile payments that are carried out by scanning a credit or debit card and allowing the user to pay for a product or service by swiping a credit card in an iPad or iPhone.

The bold move has changed the dynamics and given Square a new feather to its cap. This technology is very helpful to small businesses as this method uses the existing point-of-sale technology at small merchants. It also has mobile device support and supports business transactions.

Venmo: Best Peer-to-Peer Alternative for PayPal

There’s no shortage of existing payment solutions on the market. Some are old, some are new, and some are established, and this affects every buyer’s evaluation of these types of services. Venmo is one of those alternative options that is both new and well established – but is it the best one?

Venmo allows for payments in the form of direct monetary transfers between individuals. These payments are made privately by simply entering in the other person’s Venmo user name. That person can then accept the money or decline it. Payments through Venmo happen in real-time, which makes it one of the best payment options for those who want to get paid quickly.

There are no transaction fees, which is a major aspect of the Venmo name. However, you do have to look at the Venmo app or website every time a payment is made, which lowers its convenience factor, and each transaction is digital short hand, which could be used as a security concern.

All in all, Venmo is still new and limited in reach. So are its competitors. As such, there are many more options in this field. Here are some of the best alternative options available.

Google Pay: Best PayPal Alternative for Digital Wallets

PayPal is a popular bill processing, payment processing, and convenience fee payment options for online shoppers. The best thing about PayPal is that it’s used by millions of online retailers around the world. This company was founded in 1998 and is one of the most popular online payment services out there.

However, the downside of PayPal is that they hold a monopoly over the e-commerce industry. This means that if you’re a small to medium business, you’re more likely to go through the hassle of navigating your way through a third-party processor than you would if you set up your own online payments processing.

There are, however, a series of payments processor alternatives that have starting popping up these days. One of them is called Google Pay. Google Pay is an online payment platform owned by Google that only works with Google-owned products (G Suite and Google Play Store).

With Google Pay, retailers are able to accept credit, debit, and mobile payments with no deals if they want.

Stripe: Best PayPal Alternative for Online Payments

Stripe is a highly popular online payment gateway used by emerging startups and ecommerce stores. PayPal may be the most well known online payment gateway, but it’s also the most expensive one, as it charges 2.4% plus 30 cents. It also has several negative policies that have been publicised by several businesses in the past, which put a lot of pressure on payment gateway providers. Stripe offers no fee for transactions and supports two factor authentication with a range of tools suited for startups. Some of the plugins and tools that Stripe provide are:

> Merchant Tool – allows you to capture leads for your business without any costs.

> Mobile SDK – allows you to provide mobile payments on the go.

> Integrated social login – allows you to streamline your use of social network credentials.

> API – enabling ecommerce merchants to create their own applications.

> Compatible with many different business models – not just a simple online or app based business.

> Multiple payment options – a wide range of payment methods supported by Stripe.

> Scales as you grow – Stripe is built on a capacity model that scales as you grow no matter how big your business gets.

Dharma: Best PayPal Alternative for B2B Sales

The need for help with B2B software integration and other services has always been a challenge for small business owners, but easy-to-use tools like Dharma and its sharing capabilities make it possible for companies of any size to get some help, quickly and easily.

Dharma is a cloud-based SaaS solution that connects businesses to freelancers to bid on projects with new flat-fee pricing.

As freelancers bid on projects and a business owner reviews each proposal, a quote is generated in real-time that can be paid online in a few clicks. After selecting a freelancer, the business owner gets the details of the selected freelancer and project, and the freelancer is brought into the project. Karma is also awarded to the freelancer, allowing them to compete for more work.

An additional feature is the ability to get quotes from top freelancers based on price and number of hours desired. Companies can receive quotes from over 4 million freelancers ranging from minute to hourly rates for specific skill sets with new freelancers reaching Dharmabased freelancers are also vetted to make sure that only the top professionals are eligible to bid on a business’s projects.

I use Dharma when I need to outsource work to businesses like Smooch, which handles handling and facilitating bookings of non-profits events. I also use it to help freelancers find new clients and to hire freelancers full-time.

Braintree: Best PayPal Alternative for Comprehensive Payment System

If you are already using Braintree as your payment gateway, they have also developed a marketplace which is called Braintree Marketplace. This marketplace is a collection of technologies that allow all your business partners to do things that you already do when ordering from Braintree retail: from quickly shipping out your e-books, to processing payments, and sharing receipts with your customers.

Braintree’s Braintree marketplace is certainly one of PayPal’s biggest competitors because it works on a common database system. PayPal’s software interfaces with the DBMS and talks to the backend for transactions, processing, and billing, the Braintree portal does the same.

This means that there is no direct interface between the payment gateway and the retailer. This also means that there is no weak link. There…s no reliance on a single company to provide all the payment processing and service you need. Cons

Shopify: Best PayPal Alternative for Ecommerce

From its beginnings, Shopify has been one of the most popular ecommerce solutions for online stores. Why? Because Shopify provides a solid foundation for your online store to build on. Unlike other solutions and platforms that need you to have knowledge in coding, Shopify semi-automates your site’s content, allowing you to focus on selling. The Shopify platform offers 9 different products that include several themes and mobile apps, making it easy to grow your Shopify store and add new products and features. Some of its most popular products include online booking and next day delivery.

Shopify’s biggest value, however, doesn’t come from its ecommerce features. Payment processing, fraud protection, and inventory management are all built into its system; many other sellers don’t have to take care of these things. What’s more, Shopify lets you do this with a smaller monthly fee than most other merchants. Shopify’s eBay storefront extension can be set up in less than 5 minutes, and the platform’s support team is available around the clock.

If you rely on PayPal as an ecommerce payment processor, you need to consider shifting to Shopify. Shopify offers many sellers a robust platform for ecommerce while still charging less than PayPal.

PayPal Alternative:

Payment Depot: Best PayPal Alternative for Cheaper Rates

If working with PayPal is an option for you, it’s a great way to get paid. You can sign up for an account and connect it to your bank, so you’ll be able to receive money on your PayPal account or have it sent to your bank.

There are tons of ways to get paid from your customers and make it easy for them to pay you online. You can accept PayPal directly through your business page or you can do everything through PayPal’s API (Application Programming Interface). Depending on what your business needs are, you can customize your PayPal experience to meet your requirements.

If you want to work with a payment processor, you should plan ahead and compare payment processors to see which one works best for you. If you’re new to processing payments with PayPal, here’s a detailed guide that can help you get started.

2Checkout: Best PayPal Alternative for Global Sales

2Checkout provides a comfy, familiar user experience for paying on and off-line, which lets them convert more easily from other payment gateways.

TO GET STARTED:

One of the best things about 2Checkout is their ability to accept your credit card info with just one click. All the other payment gateways listed below need a bit more of work as they would need multiple steps, which may incur additional time and costs.

You start by entering your credit card information in the integrated virtual card processor. You can choose whether to have your card billed separately or to continue using the virtual card.

The system will process the charge and return you a 4 digit code, which you can use to pay the charge in case you’re paying on a mobile phone.

Visa and Mastercard credit cards and PayPal debit cards are processed through this gateway.

Given that 2Checkout already has a good sized audience, there are more merchants to choose from.

2Checkout has an API, which means that you can integrate their gateway with your apps. Also, they have a comprehensive tutorials on How toUse 2Checkout for Merchant Registration, two-step Credit Card Confirmation and a Virtual Payment Page.

Fattmerchant: Best PayPal Alternative for High Volume Invoicing and Virtual Terminal

Fattmerchant is a business to business (B2B) payments platform that allows merchants to accept payments for their products and services worldwide. It is available to merchants in a number of countries including the US, Canada, UK and Brazil.

The platform allows the merchant to setup a website, payment widget or widget with free or paid ecommerce apps that can be used to collect payments for products or services.

While Fattmerchant has a number of features that can make it useful to merchants, there are a few aspects of the service which make it best suited to certain types of businesses. First off, it allows merchants to collect payments without providing a physical address or telephone number. This may be useful for merchants that are located in a place like Tanzania and cannot be easily reached by many internet users.

Therefore, while the merchants don’t need to provide a physical address, they do need to provide a local telephone number. The business can specify a preferred phone number and if there’s not one in the local area, the platform will market the business locally using a number of features.

The platform also supports the ability to create custom fields in the payments form that can be used to collect additional user information.

The service also provides the ability for merchants to integrate with a greater number of payment gateway providers compared to other services.

Zelle: Best PayPal Alternative for ACH Transfers

Bottom Line

PayPal Alternatives for Small Businesses

The following is a curated list of PayPal alternatives that are either easy to set up or free for a small business. Use these PayPal alternatives for your small business today:

Paypal Payments Standard

PayPal is a very versatile payment tool and is probably the most popular method of settling transactions in the US. Paypal allows businesses, small or large, to receive and settle payments from around the world. It also provides 2-factor authentication features that make it secure and a solution that most businesses seek.

If you are a small business in the US, then you can use Paypal payments standard, a free and flexible way to accept payments within your Paypal account. You can sign up for Paypal payments standard at this link.

Paypal payments standard is an easy way to receive money online, and it’s free. Accept payments on your website, online store, eBay or even at your brick-and-mortar storefront.

For online businesses, it’s important to get your PayPal payments identifier. You can apply for Paypal payments identifier at this link. You´ll just need to provide them with your business information, and they give you an official ID.