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The Best PayPal Alternatives

Jennifer Dublino
Jennifer Dublino
business.com Contributing Writer
Updated Apr 01, 2022

PayPal is a popular payment facilitator that can help your business start accepting credit cards, but it's not the only game in town. Here are some PayPal alternatives to consider.

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 – 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. 

TipTip: 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 is right for you.

What to consider when choosing a PayPal alternative

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

Consider the following factors when 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

FYIFYI: 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.

1. 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 Square Payments service. (You may want to check out our comparison of PayPal and Square.)

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

Square’s e-commerce functions

To distinguish itself, Square offers merchants a free online store that incorporates its payment system. Businesses can choose from a variety of site setups with industry-specific features. Like PayPal, Square websites can accept donations and membership fees. 

A Square online store is a good option for both startups without a website and brick-and-mortar businesses adding an e-commerce option.

If you don’t need a website, you can still use Square for your e-commerce payment processing with Square Online Checkout. Square Online Checkout 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 reward cards with those logos. Square Online Checkout also takes Apple Pay and Google Pay, but not Venmo, PayPal or PayPal Credit.

You can also use Square for your e-commerce shopping cart by connecting with one of its partners, including GoDaddy, Wix, WooCommerce, Magneto, Weebly and 3dcart. However, If you have a custom-built website, you’ll need a developer to help you connect Square payments.

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

Like PayPal, Square enables customers to buy from merchants via link or QR code to drive sales from social media, landing pages and printed materials.

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.

Square’s marketing functions

Square currently doesn’t have any marketing tools or programs 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 without the ability to add non-customers. 

Square’s integrated email marketing software is priced as follows:

  • 0-500 contacts: $15 per month
  • 501-1,000 contacts: $25 per month
  • 1,001-2,000 contacts: $35 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:

  1. Square Online (when using Weebly): This allows merchants to sell one-time memberships (which aren’t really subscriptions).
  2. 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.
  3. Square recurring invoices: This feature is also not web-based. 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% plus 10 cents per transaction. When keying in the card number, it’s 3.5% plus 15 cents.

These are some Square mobile payment equipment options: 

  • Contactless card and chip reader ($49): This enables you to accept chip cards, contactless (NFC) cards, Apple Pay and Google Pay. It includes a backup magstripe reader that plugs in to 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 one is free, while existing customers pay $10.
  • OtterBox case/mount for reader ($49): This attaches the reader to an iPhone XR.

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, and the transaction fees are 2.6% + 10 cents for in-person processing and 3.5% + 15 cents for remote processing.

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 pickups.
  • Handle other business tasks, such as team management, payroll and reports.

There are three retail-solution tiers: Free, Plus and Premium.

  1. Free: The Free plan has no monthly fee and costs 2.6% plus 10 cents for in-person transactions and 2.9% plus 30 cents for online transactions. It includes the POS app, online store and basic inventory tools. 
  2. Plus: The Plus plan is $60 per month per location. It costs 2.5% plus 10 cents for in-person transactions and 2.9% plus 30 cents for online transactions. This plan includes cross-location exchanges, advanced inventory tools, retail reports and Square Team Management (software for scheduling, paying and managing your team). 
  3. Premium: The Premium plan has custom pricing. To be eligible, you need more than $250,000 annually in processed sales. The Premium tier includes the Square Payroll payroll service, Square Loyalty (which keeps track of customer loyalty points, rewards, etc.), Square Marketing (email marketing and marketing automation services), and account management.

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 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

The three restaurant-solution pricing tiers are again called Free, Plus and Premium.

  1. Free: The Free plan has no monthly fee and costs 2.6% plus 10 cents for in-person transactions and 2.9% 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. 
  2. Plus: The Plus plan is $60 per month per location, plus $40 per month for each added POS device. Costs are the same per sale. The Plus plan has advanced POS features, unlimited Square KDS devices, Team Plus (additional team-management features) and 24/7 support. 
  3. Premium: The Premium plan has custom pricing. To be eligible, you’ll need more than $250,000 annually in processed sales. It includes Square Payroll, Square Loyalty and Square Marketing.

Equipment

For all its business customers, Square offers the following equipment options: 

  1. Square Register: This includes a display that faces the cashier and a display that faces the customer. The cost is $799, or $39 per month over 24 months.
  2. Square Stand: This is an iPad stand for when you’re using an iPad as a POS system. The cost is $169, or $16 per month over 12 months.
  3. 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, or $27 per month over 12 months.

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% 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 less likely than PayPal to freeze merchant funds, it’s easy to integrate, and its free website tool is a nice addition. Read our in-depth Square review for more information.

2. Best PayPal alternative for large-scale businesses: Stripe

Like PayPal and Square, Stripe offers a suite of payment solutions. Stripe’s main 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’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. 

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. Stripe allows merchants to qualify for the simplest method of PCI validation if it’s not already PCI compliant.

Stripe uses machine learning to reduce fraud, with the option to apply extra authentication to high-risk payments. The standard cost of using Stripe is 2.9% plus 30 cents per transaction. 

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 since 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 taking payments online, including using two-factor authentication, using a personal verification system, and ensuring your hosting provider has safeguards in place.

Stripe’s mobile and point-of-sale functionality

Stripe’s handheld reader, the BBPOS Chipper 2X BT, is comparable to Square’s contactless chip reader. It’s currently Stripe’s only available card reader, connecting via Bluetooth to a mobile device. It costs $59, and each transaction is charged 2.7% plus 5 cents. 

The company will soon be rolling out the BBPOS WisePOS E, a hybrid countertop and handheld card reader, for $249.

Stripe’s recurring billing and subscription features

Stripe can generate invoices, schedule 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 integrates with other tools like Salesforce, DocuSign, NetSuite and Xero.

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. Its 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.

3. 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

For simple e-commerce sites, you can use Authorize.Net’s Buy Now button with its Simple Checkout tool. Otherwise, you’ll need to get a developer to help you integrate the payment processing into your website. Authorize.Net also includes advanced fraud detection and secure customer data storage in every plan. 

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% 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).

To get the All-in-One plan with the included merchant account, approval can take up to five business days, depending on your industry, credit history and responsiveness.

Authorize.Net’s mobile payment features

Authorize.Net’s mobile payment system has some nice features, including card on file, which makes returning customers’ purchases quicker and easier, and automatic card updates, so you can avoid declines from expired cards. 

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.

Authorize.Net’s mobile card readers are the same as Stripe’s: the BBPOS Chipper 2X Bluetooth for $130 and an audio jack plugin for $65. It also has the ID Tech Augusta USB Smart Card Reader for $189, which accepts only chip and magnetic stripe cards and connects to a Windows device with a USB cable.

Authorize.Net doesn’t have any POS solutions other than the combination of a virtual terminal or mobile app and a card reader, but the service does integrate with some third-party POS systems.

Authorize.Net’s virtual terminal 

Authorize.Net’s virtual terminal is called VPOS, and 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 done 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.

Bottom LineBottom 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.

Upcoming PayPal competitors

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

  • Stax by Fattmerchant
  • Due
  • Checkout
  • Flagship Merchant Services (read our Flagship review for more information)

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 customer service. 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 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. 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 to PayPal Checkout, depending on your business’s complexity and needs. (The fee for receiving domestic transactions via PayPal Checkout is 3.49% 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 since you can just copy the code and paste it into each product page on your website.
  • Standard integration: This requires you to use a web developer. It enables customers to aggregate purchases in a shopping cart and pay for them all at one time using a variety of payment types. 
  • Advanced integration: This gives you all 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% 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% 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, and it can handle fixed or quantity-based pricing. The fee for this type of transaction is 3.49% of the purchase price plus 49 cents.

What is PayPal Here?

PayPal Here is PayPal’s mobile in-person payment solution; it includes a mobile credit card reader and processing, monitoring and reporting through an app. 

PayPal offers two types of readers, both of which connect to the business owner’s mobile device via Bluetooth. The readers can’t accept PINs for debit card transactions, but they do accept both debit and credit cards, including Visa, Mastercard, Discover, and American Express, as well as PayPal, Venmo, Apple Pay, Samsung Pay, and Google Pay. Card readers can integrate with other POS hardware, such as receipt printers and cash drawers.

The app software is merchant-friendly and easy to use. It can calculate sales tax, apply discounts, send invoices, run sales reports and track inventory.

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

  • Card present, PayPal account and Venmo: 7%
  • Keyed-in card numbers: 5% plus 15 cents

These are the PayPal Here card reader equipment fees:

  • Chip and Swipe card reader: Free for new PayPal Here customers; $24.99 for existing customers
  • Chip and Tap card reader: $59.99 or $79.99 with a charging stand

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 Here, PayPal Checkout or Virtual Terminal; merchants must meet eligibility requirements, apply and be approved.

Like PayPal Here, 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 popular accounting software programs such as QuickBooks. 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: 29% plus 9 cents
  • Keyed-in card numbers: 49% plus 9 cents

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
  • 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 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, purchase amount, and credit or debit card information on the screen. Because the risk of fraud is higher for transactions in which the payment card is not physically present, the fee is higher for virtual terminal transactions: 3.09% 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. The fee for these online payments is 3.49% plus 49 cents per transaction.

What are the pros of using PayPal?

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

  • It’s easy to set up and use.
  • Customers are usually already familiar with it.
  • Since there are 325 million active PayPal accounts, giving users the option to pay with PayPal may increase your conversions.
  • It’s in 200 markets worldwide and more than 100 currencies, so it supports international sales.
  • It integrates with several popular shopping cart systems.
  • It’s secure and PCI compliant.
  • It offers PayPal Credit, which provides seamless financing of customer purchases, increasing conversion for higher-ticket items.
  • It supports invoices, subscriptions and recurring payments.
  • It 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:

  • PayPal may freeze your account. Since 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.
  • PayPal may hold your money. 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.
  • 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.
  • PayPal’s fee for chargebacks is high ($20 each).
Image Credit:

jacoblund / Getty Images

Jennifer Dublino
Jennifer Dublino
business.com 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.