Founded in 1998 by a group of tech superstars, including Elon Musk, Max Levchin, and Peter Thiel, PayPal became the go-to brand name in online money management and was bought by eBay in 2002.
In 2021, PayPal accounted for 22% of all online transactions and its mobile payment volume was $227 billion. Despite its growth, PayPal is far from monopolizing the industry.
Key Takeaways
• In 2021, PayPal accounted for 22% of all online transactions and its mobile payment volume was $227 billion.
• PayPal helps keep transactions secure by not sharing financial information with sellers and also monitors transactions 24/7.
• Popular alternatives to PayPal include Venmo, Apple Pay, Stripe, and Skrill.
• According to Forbes, the favorite payment platform for merchants in 2022 was Square.
PayPal Main Features
One advantage that PayPal has is its large, multi-service platform with diverse offerings that many other digital payment systems lack. PayPal (PYPL) offers the following features:
•PayPal lets you pay for your favorite things at millions of online stores in the U.S. and across 203 global markets
• PayPal allows for making recurring payments to monthly bills and subscriptions.
• PayPal is free to use when donating or paying for a purchase or any other type of commercial transaction unless it involves a currency conversion.
• PayPal earns 3.9% from each merchant checkout transaction.
However, PayPal is not alone in the growing digital money space as consumers are turning to online payment systems in record numbers every year.
Here are 10 popular alternatives to PayPal:
1. Skrill
• Skrill merchant fees range from 2.5% to 4%.
• Skrill accounts not used for 12 months are assessed a fee of $5.
• Skrill has a limited number of merchant acceptance and PayPal is available at almost every major retailer.
• Skrill is a good option as it has zero deposit fees, zero fees for withdrawals, and sending and receiving money is free.
2. Payoneer
• Payoneer, like PayPal, operates in more than 150 countries.
•Payoneer offers an account that is free and allows withdrawals directly into your bank account. The other account is a prepaid card that is only available to individuals and costs $29.95 a month.
•Payoneer charges a transaction fee of $1.50 for local bank transfers.
• Payoneer also provides a service called Billing Service that allows for a business to set up payments from customers with a 3% fee for credit cards and 1% for debit cards.
3. Google Pay Send
• Google Pay Send can attach payments to Gmail messages.
•Like PayPal, Google Pay Send is great for sending money to and from anywhere for virtually any reason, but Google Pay Send does not charge a fee on debit transactions, whereas PayPal charges 2.9%.
• There are no setup or cancellation fees for Google Pay Send, and it is available for Android and iPhones.
• Google Pay Send allows for a variety of tools to manage your business and incorporate loyalty programs and other advantages.
4. Stripe
• This service is only available to U.S. and Canada-based businesses, but payments can come in from any source.
• Fees are very clear; Stripe charges 2.9% plus 30 cents on every transaction.
• The checkout process for Stripe is self-hosted and occurs on the business owner's site rather than sending customers to an external site such as PayPal.
• The Stripe network automatically deposits the funds into an outside bank account.
5. Venmo
• Venmo is a checkout option with several apps and websites, including Uber and GrubHub.
• When you withdraw money from your Venmo balance, it can take a few business days to transfer money to your bank account. If you need money faster, Venmo offers instant transfers for a 1% fee, with a minimum of $0.25 and a maximum of $10.
• Venmo doesn't have regular fees, like monthly or annual fees.
• Venmo includes popular features from social networks, including likes, comments, and messages attached to each payment.
6. Apple Pay
• Apple Pay is built into iPhone, Apple Watch, Mac, and iPad.
• Like PayPal's availability, Apple Pay is accepted at over 85 percent of retailers in the U.S.
• Apple does not charge any fees when you use Apple Pay, whether in stores, online or in apps.
• Apple Pay enables you to make secure, contactless purchases using Apple Cash, Apple Card, and any other credit and debit cards that you add to your Wallet.
7. Square
• A retail platform that allows retailers to sell in-person and online.
•Options for point of sale, eCommerce, invoices, and contactless payments.
• Free to use but retailers can add tools as needed including those for payroll and timecards for employees.
• Square's Intuitive Dashboard keeps a retailer's business data in one place.
8. Amazon Pay
• Using Amazon Pay does not add fees, including transaction fees, membership fees, and currency conversion fees, to purchases on sites and organizations accepting Amazon Pay.
• Transactions are safe and secure, and everything can be tracked with an Amazon account.
• Amazon Pay accepts credit and debit cards.
• Donations, movie tickets, and more can be made with voice connect through Amazon's Alexa.
9. QuickBooks Go Payment
• Requires a credit card reader for retailers to take payments right from a mobile phone or tablet.
• Swipe rates starting as low as 1.6% for pay-as-you-go or monthly plans are available starting at $19.95.
• It works with iPhones, iPads, Android phones, and Android tablets.
10. Shopify Payments
• Requires a Shopify account to accept Shopify Payments.
• Customers can use their preferred payment methods such as Visa, Mastercard, or ApplePay.
• Includes a built-in fraud analysis feature and flags orders that are potentially fraudulent.
• Pricing plans for Shopify account sellers range from $29/month to $299/month.
Does PayPal Provide Protection for Buyers?
PayPal helps keep transactions secure by not sharing financial information with sellers and also monitors transactions 24/7. PayPal also monitors fraud prevention and helps with dispute resolution, putting a hold on funds until the issue is resolved.
What Online Payment Platform Do Merchants Prefer?
According to Forbes, the favorite payment platform for merchants in 2022 was Square.
What Is a Cryptocurrency Payment Gateway?
A cryptocurrency payment gateway is a payment processor for digital currencies, similar to the payment processors, or gateways, that banks or credit cards use. Cryptocurrency gateways enable you to accept digital payments and receive fiat currency immediately in exchange.
The Bottom Line
In 2021, PayPal accounted for 22% of all online transactions, however, it is one of many companies in the growing digital money space for payments systems, which include Square, Venmo, and Amazon Pay.
