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Updated Apr 18, 2024

The Best PayPal Alternatives

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Jennifer Dublino, Contributing Writer

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If you’re a small business owner who wants to accept credit cards in person and online, you’ve probably considered using PayPal. PayPal is a payment facilitator, which is a company that simplifies the credit card acceptance process. PayPal places its business customers under its master merchant account, so businesses don’t have to apply for and deal with separate merchant accounts. 

Many businesses accept card payments with PayPal, but it’s not for everyone. Here’s a look at the best PayPal alternatives that might work well for your business, along with an overview of precisely what PayPal offers. 

Editor’s note: Looking for the right credit card processor for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

Best PayPal alternatives

Different payment processing vendors are better suited for particular functions and transactions. Through careful analysis, we’ve rounded up some of the best options for businesses depending on their needs. Here are some worthy options to consider.

TipBottom line

If you’re considering a credit card processor for your business, check out our reviews of the best credit card processors, compare their features, and decide which one is right for you.

Best PayPal alternative for in-person transactions: Square

While PayPal got its start enabling cashless payments online, Square was a mobile payment pioneer, introducing the first widely used card reader that plugged into a mobile phone. Square’s strongest presence is in the in-person retail transaction space; more recently, it has branched out into e-commerce payments with its payments service. 

Here’s a rundown of what Square has to offer:

Square’s e-commerce functions

  • Free online store: To distinguish itself, Square offers merchants a free online store that incorporates its payment system. Businesses can choose from various site setups with industry-specific features. As with PayPal, Square websites can accept donations and membership fees. A Square online store is a good option for a startup without a website or a brick-and-mortar business that wants an e-commerce option.
  • Square Online Checkout: If you don’t need a website, you can still use Square for your e-commerce payment processing with Square Online Checkout, which is comparable to PayPal Checkout’s button generator. (We’ll explain more about PayPal’s features later.) With Square Online Checkout, you input information about each product, including its name, image and price. The service accepts Visa, Mastercard, American Express, Discover, JCB and UnionPay cards, as well as prepaid, debit and rewards cards with those logos. Square Online Checkout also takes Apple Pay and Google Pay, but not Venmo, PayPal or PayPal Credit.
  • E-commerce shopping cart: You can also use Square for your e-commerce shopping cart by connecting with one of its partners, which include GoDaddy, Wix, WooCommerce, Magento, Weebly and Shift4Shop (formerly 3dcart). However, If you have a custom-built website, you’ll need a web developer to help you connect Square payments.
  • Multiple ways to purchase: Like PayPal, Square enables customers to buy from merchants via links or QR codes to drive sales from social media, landing pages and printed materials.
FYIDid you know

If you’re comparing Square with PayPal, note that Square accepts fewer payment types and doesn’t have a responsive button display.

Square’s marketing functions

Square currently lacks marketing tools or programs that are comparable to PayPal’s Store Cash, which offers customers incentives to buy from a retailer they’ve visited. However, Square does offer integrated email marketing software that tracks sales made through its emails, texts and social links. This software is similar to Constant Contact or Mailchimp, but it pulls contacts from the merchant’s customer list and lacks the ability to add noncustomers.

Here’s the pricing for Square’s integrated email marketing software:

  • 0-500 contacts: $15 per month
  • 501-1,000 contacts: $30 per month
  • 1,001-2,000 contacts: $40 per month
  • 2,001-4,000 contacts: $55 per month

Square’s subscription features

Like PayPal, Square supports subscriptions and free trials. However, Square’s process is a bit clunky and confusing. 

There are three possible ways to set up subscriptions and free trials with Square:

  • Square Online (for use with Weebly): This option allows merchants to sell one-time memberships (which aren’t really subscriptions).
  • Square checkout links: This function isn’t web-based; customers receive an email asking them to pay. The customer then chooses whether this is a one-time payment or a subscription payment.
  • Square recurring invoices: This feature is not web-based, either. Recurring invoices offer the advantage of sending customers a one-time payment request and then charging their payment card when it’s time to renew the subscription.

Square mobile payment functionality

You can accept mobile payments with the Square Point of Sale app on a compatible iOS or Android device. With a Square reader, the cost is 2.6 percent plus 10 cents per transaction. For transactions where the card number is keyed in, it’s 3.5 percent plus 15 cents.

Square offers the following mobile payment equipment options: 

  • Contactless card and chip reader: For $59, this option lets you accept chip cards, contactless (NFC) payments, Apple Pay and Google Pay. It includes a backup magstripe reader that plugs into your phone’s headphone jack or Lightning connector. This system connects to your mobile device via Bluetooth.
  • Magstripe reader for Android or Apple: The first magstripe reader is free; existing customers pay $10 for each additional one.

Square’s virtual terminal options

Like PayPal, Square offers a virtual terminal, or payment gateway, for remote billing or accepting credit cards over the phone. This virtual terminal can issue receipts by email, text or print and collect customer feedback on digital receipts. It can also schedule recurring payments. 

For professional-service businesses, the virtual terminal can integrate with the Square Terminal credit card machine (see below for more information). There is no monthly fee; the transaction fees are 2.6 percent plus 10 cents for in-person processing and 3.5 percent plus 15 cents for remote processing.

FYIDid you know

There’s some confusion about the difference between a payment gateway and a payment processor. A payment processor facilitates transactions between your merchant account and a customer’s bank account, while a payment gateway authorizes your customers’ payments.

Square’s point-of-sale options

Point of sale (POS) is where Square really shines. Square offers specialized software and hardware solutions for different business types: retail, food and beverage, and professional services.

Retail software

Square’s retail POS software gives you these abilities:

  • Integrate online and in-person sales and customer data
  • Add notes on customer preferences and characteristics
  • Manage inventory, even across multiple locations
  • Offer shipping and in-store pickup
  • Handle other business tasks, such as team management, payroll and reports

Square used to have three retail-solution tiers but now offers one free POS plan. Square’s free POS plan has no monthly fee; you’ll pay 2.6 percent plus 10 cents for in-person transactions and 2.9 percent plus 30 cents for online transactions. It includes the POS app, online store and basic inventory tools. If you process over $250,000 in credit card sales, you may be able to get lower card processing fees.

Restaurant software

Square provides solutions to accommodate different restaurant types: quick service, full service, fast-casual, bars and breweries, and ghost kitchens. Its POS software includes the following features:

  • Fast order entry with conversational modifiers
  • Real-time menu updates across devices
  • Ability to repeat an order in a few taps
  • Kitchen display system (KDS) that produces digital tickets, allowing managers to manage all orders in one screen
  • Integration of online ordering into the POS and KDS
  • Menu management
  • Bulk additions to update menu
  • Integrations with other software, like Homebase, TapMango, 7shifts and BentoBox
  • Ability to handle promotions
  • Order manager
  • Reports, including by section and menu item
  • Automatic gratuity for large parties
  • Table management with timers
  • Kitchen reports
  • Ability to reopen closed checks

Square offers three restaurant POS pricing tiers:

  • Free: The Free plan has no monthly fee; you’ll pay 2.6 percent plus 10 cents for in-person transactions and 2.9 percent plus 30 cents for online transactions. It includes the POS app, team management, and support from 6 a.m. to 6 p.m. Monday through Friday.
  • Plus: The Plus plan is $60 per month per location, plus $40 per month for each added POS device and $50 per month for each location using a mobile POS solution. Costs are the same per sale. The Plus plan has advanced POS features, unlimited Square KDS devices, Team Plus (additional team-management features), course management and 24/7 support.
  • Premium: The Premium plan has custom pricing. To be eligible, you’ll need more than $250,000 annually in processed sales. This tier includes Square Payroll, Square Loyalty and Square Marketing.

Square’s equipment

Square offers the following equipment options: 

  • Square Register: This includes a cashier-facing display and a customer-facing display. It costs $799 upfront, or $39 per month over 24 months. (Save $137 with the upfront option.)
  • Square Stand: This is an iPad stand for when you’re using an iPad as a POS system. It costs $149 upfront, or $14 per month over 12 months. (Save $19 with the upfront option.)
  • Square Terminal: This all-in-one device accepts cards via tapping, swiping and inserting. It can also take debit PINs and print receipts. The cost is $299 upfront, or $27 per month over 12 months. (Save $25 with the upfront option.)
Did You Know?Did you know

Restaurant payment processing has some unique considerations. You should consider your average sales ticket size, monthly sales volume and processing needs before signing a contract with a credit card processor.

Square’s money-moving abilities

Square has its own bank, Square Financial Services, which can integrate seamlessly with the Square Payments online payment-processing solution, giving merchants instant access to their money with no fees, minimum-balance requirement or credit checks. 

If you have a bank account, Square allows you to send up to $10,000 per transfer instantly, with unlimited instant transfers per day. Instant transfers cost 1.5 percent of the transfer amount. Standard transfers are usually sent within 36 hours (one to two business days) and are free.

Bottom LineBottom line

Square is an excellent choice for in-person retail and restaurant businesses because of its specialized software. Square is easy to integrate, and its free website tool is a nice addition. Read our in-depth Square review for more information.

Best PayPal alternative for large-scale businesses: Stripe

Like PayPal and Square, Stripe offers a suite of payment solutions. Stripe’s primary strength is e-commerce payments, although it also offers a virtual terminal and card readers. Its main customers are large-scale businesses such as Zoom, DoorDash, Shopify and Lyft.

Stripe’s e-commerce functions

  • Stripe Checkout: Stripe’s e-commerce solution is called Stripe Checkout, which is designed and hosted by Stripe. Stripe Checkout features address auto-complete, one-click payments, real-time card validation and third-party autofill to make it easier and faster to complete a payment form. 
  • Multiple payment types: Businesses can accept credit and debit card payments with Stripe. Stripe also accepts Apple Pay, Google Pay (but not PayPal or Venmo) and local payment methods in more than 25 languages and 135 currencies. 
  • PCI validation: Stripe allows merchants to qualify for the simplest method of PCI validation if it’s not already PCI compliant.
  • Anti-fraud measures: Stripe uses machine learning to reduce credit card fraud, with the option to apply extra authentication to high-risk payments. 
  • Cost per transaction: The standard cost of using Stripe is 2.9 percent plus 30 cents per transaction. 
  • Retried payments to boost acceptances: Stripe reduces the overall percentage of declined transactions by identifying and trying the best way to retry the purchase. While this system is in place for all kinds of purchase situations, boosting purchase acceptance is especially important in e-commerce sales because they’re considered riskier and are more likely to be declined.
Did You Know?Did you know

Even if your e-commerce transactions are considered riskier, there are ways to protect your business when you take payments online, including using two-factor authentication, instituting a personal verification system, and ensuring your hosting provider has safeguards in place.

Stripe’s mobile and point-of-sale functionality

  • Stripe Reader M2: Stripe’s handheld reader, the Stripe Reader M2, is comparable to Square’s contactless chip reader. It connects via Bluetooth to a mobile device. It costs $59; each transaction is charged 2.7 percent plus 5 cents. 
  • Stripe Reader S700: Stripe’s upcoming reader, the Stripe Reader S700, is an Android-based smart reader that can work as a mobile POS solution. It was not yet available at the time of this writing.
  • BBPOS WisePOS E: The BBPOS WisePOS E is a hybrid countertop and handheld card reader that costs $249. 
  • Smartphone compatibility: Stripe’s software supports payment on iPhones and Android phones without a reader.

Stripe’s recurring billing and subscription features

Stripe can generate invoices, support subscriptions, schedule email reminders for missed or overdue payments, and handle billing proration. It can also trigger actions based on upgrades, payments and cancellations. 

Stripe’s recurring billing can handle flat-rate pricing, multiple-pricing selling, per-seat billing, usage-based billing, and flat-rate-plus-overage billing models. 

Stripe’s marketplace operations

If your business is a marketplace where you provide a platform for service providers to sell, Stripe may be a good solution for you. The software helps marketplaces instantly onboard and manage service providers, split revenue from transactions among multiple recipients, and control expenses. It also allows you to retain your sellers with instant payouts and balance cards.

Stripe’s money-moving abilities

When you first get set up with Stripe, it takes seven to 14 days to transfer your money to your bank account. Once you’re established, payouts to your bank account arrive on a two-day rolling basis. If you’re in a high-risk industry, however, your money will take 14 days to arrive. Companies based in countries other than the U.S. and Australia will also have slower transfer times.

Bottom LineBottom line

Stripe is best suited for e-commerce and marketplace businesses, especially those planning to scale quickly. It has excellent security features, and its transaction-retry protocol can increase sales that otherwise would have been declined. Read our in-depth Stripe review for more information.

Best PayPal alternative for e-commerce businesses: Authorize.Net

Like the other providers mentioned here, Authorize.Net lets businesses accept payments online at retail locations and via mobile devices. Authorize.Net also supports phone sales and online billing. It accepts Visa (its owner), Mastercard, American Express, Discover, JCB, PayPal, Apple Pay and e-checks, but not Google Pay or Venmo.

Other than PayPal, Authorize.Net is the only payment provider that takes PayPal accounts, and it’s the only one that accepts e-checks.

Authorize.Net’s e-commerce features

  • Simple Checkout: Straightforward e-commerce sites can use Authorize.Net’s Buy Now button with its Simple Checkout tool. Otherwise, you’ll need a developer to help you integrate the payment processing into your website. 
  • Fraud detection and secure storage: Authorize.Net includes advanced fraud detection and secure customer data storage in every plan. 
  • Payment gateway charges: Unlike the other companies, Authorize.Net’s payment gateway isn’t included for free; it will cost you $25 per month. If you don’t have a separate merchant account, the cost is 2.9 percent plus 30 cents per transaction (the All-in-One plan). If you have a merchant account, the cost is $25 per month for the gateway and 10 cents per transaction, plus a daily batch fee of 10 cents (the Payment Gateway Only plan). Approval for the All-in-One plan can take up to five business days, depending on your industry, credit history and responsiveness.

Authorize.Net’s mobile payment features

  • Card storage: The card-on-file feature makes returning customers’ purchases quicker and easier. Additionally, the system can automatically update cards to help you avoid declines from expired cards. 
  • mPOS app: The mPOS app allows you to view transaction history, change settings, and process voids and refunds on the go. It can also be customized with varying tax rates, shipping information and products.
  • Card reader availability: Authorize.Net does not sell mobile card readers directly; you must purchase a compatible reader on its sister site, One option is the $189 ID Tech Augusta USB Smart Card Reader, which accepts only chip and magnetic stripe cards and connects to a Windows device via a micro-USB-to-USB cable.
  • POS integrations: Authorize.Net doesn’t have any POS solutions other than the combination of a virtual terminal or mobile app and a card reader. However, the service integrates with some third-party POS systems.

Authorize.Net’s virtual terminal 

Authorize.Net’s virtual terminal is called VPOS. It lets merchants email or print receipts and connect to a card reader via USB or Bluetooth. Data is stored in the Authorize.Net data center for security. Recurring billing can be conducted using the virtual terminal.

Authorize.Net’s money-moving abilities

Authorize.Net automatically transfers your revenue to your bank account at intervals that depend on your country’s location and risk level.

TipBottom line

Authorize.Net is best suited for e-commerce businesses, especially those with web developers on staff. It has excellent security features, but it’s not tailored to retail or restaurant businesses. Transaction costs will be high for businesses that process many smaller purchases.

Up-and-coming PayPal competitors

Keep an eye out for these up-and-coming players in the payment facilitation space:

What to consider when choosing a PayPal alternative

When you’re looking for the best PayPal alternative, consider how your business operates and what it needs (and doesn’t need). Avoid paying for features you won’t use, and find a payment gateway that offers the functionality you need. 

Consider the following factors when you’re evaluating PayPal alternatives: 

  • Low fees
  • Quick access to your money
  • High security level
  • Integration with other websites and software tools you use
  • POS hardware types and cost
  • Great customer service
  • Support for international transactions
  • Easy integration with your website

A primer on PayPal

In case you’re deciding between PayPal and a PayPal alternative, here’s a quick primer on PayPal’s pricing, setup, equipment, technology and more. PayPal lets merchants accept payments from e-commerce sites over the phone with a virtual terminal, by subscription and on-demand with invoicing.

Here’s a look at PayPal’s payment processing services.

What is PayPal Checkout?

PayPal Checkout is PayPal’s e-commerce and app payment solution. It offers contextual checkout button options so you can display payment buttons that are relevant to the individual customer. For example, Venmo users will see a Venmo checkout option. Paying with major debit and credit cards is also an option, as is the ability to choose Pay Later, which automatically splits the total cost into four payments. Offering these relevant payment options increases conversion because it makes paying easier.

Customers authorize payment in a PayPal pop-up window on the merchant site, and then PayPal automatically fills in the customer’s name and shipping address on the merchant checkout page. PayPal Checkout includes PCI compliance.

There are three levels of PayPal Checkout, and your business’s complexity and needs will determine which one is the best fit. (The fee for receiving domestic transactions via PayPal Checkout is 3.49 percent of the purchase price plus 49 cents per transaction.)

  • Button generator: This is PayPal Checkout’s most basic checkout option. The button generator eliminates the need to set up shopping-cart functionality because you can just copy the code and paste it into each product page on your website.
  • Standard integration: This requires a web developer (unless you use a popular e-commerce platform like Shopify, which has built-in integration). It enables customers to aggregate purchases in a shopping cart and pay for them simultaneously using various payment types.
  • Advanced integration: This gives you all of the standard integration features and adds the flexibility of customizing the look, feel and placement of the debit and credit card payment fields. More importantly, it has security features, including fraud protection tools.

What is PayPal’s Store Cash?

Store Cash is an optional feature for PayPal e-commerce merchants to help increase sales from abandoned shopping carts. PayPal can track about 40 percent of people who leave your site without purchasing. It can also identify customers who have purchased from you within the past 12 months but not within the past three months. 

PayPal then sends these people an email notifying them that Store Cash is in their PayPal wallet to spend on your site within seven days. You pay a fee to PayPal of 8 percent of the purchase amount only when a customer returns to your site and makes a purchase using Store Cash.

How does PayPal handle subscriptions?

With PayPal, you can enable recurring and subscription payments. The option has customizable trial periods to encourage customers to subscribe; it can handle fixed or quantity-based pricing. The fee for this type of transaction is 3.49 percent of the purchase price plus 49 cents, in addition to the $10 monthly fee.

What is Zettle?

Zettle is PayPal’s fixed retail POS solution. Signing up for Zettle is a bit more involved than signing up for PayPal Checkout or Virtual Terminal; merchants must meet eligibility requirements, apply and be approved.

Zettle includes an app to help you take payments, track sales and manage your inventory. It can integrate with your online sales, as well as with some of the best accounting software solutions, like QuickBooks Online. Download the Zettle app on a smartphone or tablet, or use it with a Zettle POS cash register. Zettle hardware includes a cash register, card reader, receipt printer and handheld scanner.

There are no monthly fees to use Zettle. The transaction fees are as follows:

  • Card-present and QR-code transactions: 1.75 percent 
  • Payment links and Zettle Invoice: 2.5 percent 

The costs for Zettle equipment are as follows:

  • Cash register and card reader: $249
  • Cash register, card reader and receipt printer: $499
  • Cash register, card reader, receipt printer and handheld scanner: $699
  • Card reader and receipt printer: $339
  • Card reader: $29 for new users, $79 otherwise
  • Card reader dock and charger: $49
  • Card reader dock with built-in receipt printer: $99
  • Stand for iPad: $159
  • Cash drawer: $119
  • Handheld barcode scanner: $229

What is the PayPal Virtual Terminal?

The PayPal Virtual Terminal is a secure payment gateway site that you can access via a web browser on a phone, tablet or computer. It’s suitable for companies that do most of their transactions over the phone; it requires no hardware, coding or software. 

After the PayPal Virtual Terminal is set up, you’ll enter customer contact information, the purchase amount, and credit or debit card information on the screen. Because the risk of fraud is higher for transactions where the payment card is not physically present, the fee is higher for virtual terminal transactions: 3.09 percent of the purchase price plus 49 cents.

What is PayPal’s invoicing option?

The PayPal invoicing option is most often used by freelancers and independent contractors. It allows business owners to create, manage and send invoices, and there’s no charge for these functions. The only time you’ll be charged is when a customer pays an invoice online using a credit card, debit card, PayPal account or PayPal Credit. PayPal’s fee for these online payments is 2.99 percent plus 49 cents per transaction.

What are the pros of using PayPal?

If you’re considering PayPal payment services, here are some upsides:

  • Ease of use: PayPal is easy to set up and use.
  • Well-known platform: Customers are usually already familiar with it.
  • Large customer base: There are 431 million active PayPal accounts, so giving users the option to pay with PayPal may increase your conversions.
  • International markets: PayPal is available in over 200 markets worldwide and more than 100 currencies, so it supports international sales.
  • Integrations: PayPal integrates with several popular shopping-cart systems.
  • Security: The platform complies with Payment Card Industry data security standards.
  • Financing: It offers PayPal Pay Later, which provides seamless financing of customer purchases, thus increasing conversions for higher-ticket items.
  • Billing options: It supports invoices, subscriptions and recurring payments.
  • High transaction limit: PayPal has a high withdrawal limit for instant bank account transfers: $25,000 per transaction.

What are the cons of using PayPal?

PayPal also has some downsides to consider:

  • Possible account freezing: Because all business clients are under the PayPal umbrella, PayPal is more sensitive to potentially fraudulent transactions. If PayPal suspects a problem, it can freeze your account, putting a serious crimp in your cash flow until you definitively prove your identity.
  • Risk for money holding: Due to its fear of fraudulent transactions, PayPal may decide to hold your money for up to 21 days. In the meantime, you won’t have access to that money for buying inventory or covering other business expenses.
  • Transfer fees: Your bank may charge you to receive money transfers from PayPal. Some banks charge a fixed fee for incoming transfers, regardless of the transfer amount.
  • Charge-back fees: PayPal assesses a $20 fee for each charge-back.
author image
Jennifer Dublino, Contributing Writer
Jennifer Dublino is a prolific researcher, writer, and editor, specializing in topical, engaging, and informative content. She has written numerous e-books, slideshows, websites, landing pages, sales pages, email campaigns, blog posts, press releases and thought leadership articles. Topics include consumer financial services, home buying and finance, general business topics, health and wellness, neuroscience and neuromarketing, and B2B industrial products.
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