PayPal Alternatives: 8 Online Payment Processors BETTER Than PayPal!

If you are searching for a PayPal alternative, chances are your PayPal account was suspended (limited), or you’re in a country which doesn’t qualify for a PayPal business account.

Either way, you need to act quickly. Not being able to receive payments means you’re missing out on revenue every single day.

The good news is that there are many viable PayPal alternatives, the downsides are higher fees and longer payout periods.

(NOTE: If PayPal doesn’t support your country, you can bypass that restriction by setting up an e-Residency company.)

PayPal Is #1, But There Are Alternatives …

If you run an online business, you can have customers and receive payments from anywhere around the world. PayPal remains the most popular online payment service.

With more than 100 currencies, the payment service offers online businesses a secure way to send and receive money.

While PayPal is a great payment option, it does have its downsides.

The main cause for concern for most online businesses are the transaction fees. PayPal charges 2.9% + $0.30 per transaction for sales in the US and 4.4% (plus currency-spread of 2.5%-3%) for international transfers.

And when you add the charges on credit and debit card payments, the service can be costly for many small online businesses.

In addition to incurring high transaction costs, many PayPal users have also had their accounts suspended or funds withheld for small issues. This can cause you to incur major losses.

You don’t want to put all your eggs in one basket. Having alternative payment options can come in handy and help you avoid potential cash flow issues.

If you can work around some of their limitations, the alternative payment processors I’ll share below will fit your needs.

Gumroad (3.5% + 30c per transaction)

  • Payout Interval: Every Friday
  • Payout Method: PayPal, Wire Transfer

Gumroad offers a free plan as well, but the transaction fee is 8.5%. Their premium plan is $10/month only – for most sellers upgrading is worth it.

There are many things I like about Gumroad: You’re able to sell different types of products, choose how they are being delivered and don’t need to host any files yourself.

If you look at the screenshot below: Digital Product is self-explanatory.

Physical Product won’t be relevant for most people. ‘Anything else!‘ redirects the customer to a specific URL after the purchase is completed. This could be a hidden link with file downloads/login info.

Gumroad Dashboard

In terms of selling digital products, there are 3 variations. I have only ever used the standard and subscription model. Keep in mind that Gumroad notifies customers 1 day before the recurring payment takes place. PayPal doesn’t do this.

It’s no secret that some membership sites count on their members forgetting about their subscription. With Gumroad, that’s a bit hard to pull off.

Subscribers are notified about the upcoming payment; naturally, many simply cancel before that.

Gumroad Digital Product

Gumroad will host all the product files & deliver them to the customer right after the purchase has been completed. Audio files can be streamed without downloading.

Gumroad Digital Product Files

Gumroad integrates with both MailerLite & ConverKit, which means purchase emails are automatically added to your email marketing sequence.

The Gumroad dashboard also allows you to broadcast email updates to your customers. If you don’t require advanced email marketing features, Gumroad’s ‘Workflows‘ can be used for creating an autoresponder series.

Gumroad Workflow Email

There isn’t much negative to say about Gumroad. Fees are reasonable, the $10/month Premium membership offers good value. Solely the payout interval (weekly – every Friday) is a bit of a drawback.

Using PayPal, you can instantly withdraw funds to your bank account and be ‘safe‘. Gumroad holds on to your funds for an entire week.

This isn’t much of an issue if you’re just starting out but once you generate several thousand USD weekly, not being able to use those funds immediately can mean the difference between the growth and stagnation of your online business.

If you’re using WordPress, you can use the Gumroad WordPress Plugin for easier integration.

TransferWise (€0.60 for Bank Withdrawals)

  • Payout Interval: Instantly
  • Payout Method: Wire Transfer

TransferWise isn’t a viable option for selling digital products, but it can be a good PayPal alternative if you manually request payments (e.g. freelancer).

One major disadvantage of PayPal is that they use their own exchange rate whenever you are making payments in a different currency, or withdraw say USD to a EUR bank account.

It’s not uncommon to ‘lose‘ up to $50 in exchange fees every time you make a $1,000 withdrawal. The exchange rate PayPal uses might be 0.85 while the one you see on Google (actual exchange rate) is 0.92 or higher.

If you’re interested in the pros & cons of TransferWise (compared to PayPal), watch the video below or continue here.

2Checkout (2.9% + 30c per transaction)

  • Payout Interval: Every Thursday
  • Payout Method: Wire Transfer

2Checkout is one of the most popular PayPal alternatives. With over 15 languages and availability in over 200 countries, the online payment processor boasts a truly global reach.

The payment service provides a wide range of payment methods allowing customers to choose the most convenient option.

2Checkout gives you the flexibility to customize the billing intervals and set a schedule that works for your business.

And with online shopping going mobile, your customers are rewarded with a mobile-friendly experience, branded to match your website.

When setting up the payment service, you can either fully integrate it to your e-commerce platform or opt for the hosted checkout option.

2checkout Inline Checkout

This feature is similar to Gumroad’s Overlay, which allows the customer to check out directly on the product page.

What’s great about both 2checkout and Gumroad is that even though they are PayPal alternatives, customers are still able to pay via PayPal.

2checkout Inline Checkout

2checkout Account Updater

Let’s talk about recurring billing. If you have a membership site, you probably offer different subscription plans. PayPal lets you create subscriptions and it just works – no issues.

Gumroad allows you to offer subscriptions as well but I’ve noticed two issues.

1.) Gumroad notifies subscribers about the recurring payment ahead of time. This leads to lots of cancellations.

2.) Often times credit cards used by subscribers expire. Gumroad doesn’t update the credit card data automatically.

Both of these issues can be mitigated by using 2checkout (see ‘Account Updater’ below).

2checkout account updater

Payoneer (3% per transaction)

  • Payout Interval: Instantly (Takes 3-5 business days to arrive)
  • Payout Method: Wire Transfer

Payoneer is another reliable payment option for online businesses. The payment service is available in many countries making it easy to get paid by customers around the world.

Payoneer Account Dashboard

What’s stands out about Payoneer is its convenience. Users enjoy fast payments and multiple options for invoicing, billing and payment. You can withdraw payments directly into your local bank account or use a Payoneer debit card.

Although there is a 3% fee when you receive payments directly via a credit or debit, sending and receiving payments from another Payoneer customer is absolutely free.

Shopify Payments (2.4% + 30c per transaction)

  • Payout Interval: 2-4 Days
  • Payout Method: Wire Transfer

If you run an e-commerce site, Shopify’s integrated payment system is an amazing PayPal alternative. The payment service comes a part of the overall Shopify e-commerce service eliminating the need to set up a third-party payment provider.

Shopify Payment

It comes fully integrated with your store and includes a wide variety of functions that let you manage your entire business and financials in one place.

Shopify Payments allows you to accept payments from international customers in the UK, US, Canada, and Australia at no additional charge.

The transaction rate is based on your Shopify plan and ranges from 2.4% + 30c to 2.9% + 30c per transaction.

CoinBase Commerce (No Transaction Fees)

  • Payout Interval: Instantly
  • Payout Method: Third-Party Wallet Required

CoinBase is a digital currency payment provider that allows businesses and customers to transact with cryptocurrencies like bitcoin, ethereum, and litecoin.

This makes it easy to receive money across borders without using a bank or any other intermediaries.

Here’s what the checkout experience (selling a digital product/service) looks like.

coinbase commerce

CoinBase Commerce can be directly integrated into your checkout flow or added as a payment option on your e-commerce site.

The obvious downside it that cryptocurrencies aren’t as widely used as PayPal and credit cards.

Stripe ( 2.9% + 30c per transaction)

  • Payout Interval: 2 Days Rolling Basis
  • Payout Method: ACH Payments, Wire Transfer

Another one of PayPal’s biggest competitors. Founded in 2010, Stripe is designed for online businesses and offers a great assortment of tools for billing customers and accepting payments.

It makes it easy to reconcile your transactions and provides real-time information about charges, transfers and refunds.

Stripe is easy to use and provides seamless integration into popular e-commerce platforms. Users are afforded multiple payment options including credit and debit cards.

The payment service charges a fixed 2.9% + 30¢ fee for any successful credit card charge with an extra 1% if your customer pays with an international card.

Stripe Fees Pricing

One of the biggest advantages Stripe has over it’s competitors is the massive selection of extensions and integrations.

Stripe Extensions

If you are using WordPress for your website, I recommend you install the Stripe plugin. It let’s you skip all the complicated coding and easily add Stripe to your product page.

The Stripe WordPress Plugin (WP Simple Pay) also allows you to easily add pricing tables like the one below. That way, you can offer different variations of your product/service.

WP Simple Pay Pricing Table

Once the customer is ready to pay, the following overlay appears. It’s clean and can further be customized.

(To be clear, this overlay is just one of many checkout options. You can also redirect the customer to a dedicated checkout page.)

WP Simple Pay Overlay

Revolut for Business (FREE)

  • Payout Interval: Instantly
  • Payout Method: Wire Transfer

Revolut for Business is similar to TransferWise in that you are provided with bank account details, are able to receive wire transfers in multiple currencies and can withdraw funds to your REAL bank account at any time.

Revolut for Business Account

The advantage here being that you are offered better exchange rates – as opposed to what you’d get at PayPal.

Which PayPal Alternative Is Right For YOU?

As you could see, there are many options to choose from – each with a different set of features, payout intervals and methods.

Which PayPal alternative is right for you depends on what types of products/services you are offering, the location of your clients and other variables.

The professional alternative would be Stripe, with 2checkout coming in as a close second. Both require ID verification (driver’s licence/passport).