PayPal Alternative: 18 Alternatives You Should Know

PayPal Alternative: 18 Alternatives You Should Know

Nowadays, paying online and receiving money are as natural as paying in cash after visiting a restaurant. PayPal is a real player when it comes to online payment transactions and you can hardly ignore the company from Silicon Valley. In this article, we want to show you a few real alternatives to PayPal and explain why they make sense for freelancers and small businesses.

Why can a PayPal alternative be useful? (Advantages and disadvantages of PayPal)

First of all, we have to clarify whether an alternative to PayPal makes sense at all. To answer this question, let’s first look at the pros and cons of PayPal.

The advantages include that paying with PayPal is relatively easy and you can carry out your transaction very quickly. The company is sensitive to the payment details of the buyers and money can be sent to friends, relatives or anyone. PayPal offers buyer protection, they reimburse the costs of returns and the maintenance of the PayPal account is free of charge. In addition, PayPal is now very widespread and you can pay with PayPal almost anywhere in the digital world.

One of the disadvantages of PayPal is that the company stores all data on servers in the USA. In terms of data protection, that’s more of a gray area. Furthermore, PayPal passes on data to third parties and fees are charged from the merchants so that they can participate in the payment network.

The 8 best PayPal alternatives for private online payments

Now that we have shown you the advantages and disadvantages of paying with PayPal, we are now introducing you to the 8 best PayPal alternatives for private online payments.

Immediately from Klarna

The Klarna Sofortuberweisung is a service of the Swedish Klarna bank. If you have an account with a German bank, you can also use Klarna Sofort’s services without any problems. When buying online, you enter your known online banking access data and complete the purchase. Nobody will see your data during the transaction. You can already buy from more than 200,000 retailers around the world via Klarna.

Immediate fees for payer: There  are no fees for customers 

Immediate fees for payees:  1.35% of the invoice amount + € 0.20 per transaction – no start-up fee or monthly fee

Does Sofort offer buyer protection?  Yes

Advantages of Sofort over PayPal: 

  • Complete purchase with 1 click
  • no registration necessary
  • benefit from buyer protection
  • Klarna assumes credit and fraud risk

Disadvantages of Sofort compared to PayPal: 

  • no way to send money
  • no individualized cost model 
  • no assumption of the return costs
  • Payment transactions can be traced by the provider (data protection concerns)

Paydirect

Paydirect was started as a joint project by some German banks and savings banks. You have to have an account with one of the participating banks and paydirekt then represents an additional function with which you can make online payments. The German data protection regulations are strictly observed, but paydirekt is not widely used. You can currently pay with paydirekt in around 10,000 online shops.

Paydirekt fees for payers: there  are no fees for customers

Paydirekt fees for payees:  1.90% of the invoice amount and € 0.35 per transaction

Does paydirekt offer buyer protection?  Yes

Advantages of paydirekt compared to PayPal: 

  • benefit from exclusive discounts
  • No third party providers are required for payment
  • benefit from buyer protection
  • Bank keeps sensitive data with itself
  • paydirekt adheres to German data protection regulations

Disadvantages of Paydirekt compared to PayPal: 

  • currently not too widespread
  • so far there have been frequent phishing attacks
  • only possible at participating banks

GooglePay

With GooglePay , the global corporation has launched its own payment service. Since June 2018, customers in Germany have also been able to use this payment service. In-app payments, transactions in stationary retail and payments in online shops can be processed via GooglePay. There are also high security standards here and the use of GooglePay is free of charge. However, GooglePay is not yet very widespread, but the number of phones with Android operating systems is immense. So there is a lot of potential in it.

GooglePay fees for payers: There  are no fees for customers

GooglePay fees for payees: there  are no additional costs for merchants

Does GooglePay offer buyer protection?  No

Advantages of Google Pay over PayPal: 

  • high security standard
  • Pay quickly and easily online or at the POS
  • sensitive data will not be passed on
  • several loyalty cards can be saved in the application

Disadvantages of Google Pay compared to PayPal: 

  • is not supported by all smartphone providers
  • is not offered by all banks
  • NFC payment not possible everywhere
  • no buyer protection
  • no assumption of the return costs

Amazon Pay

The Internet giant from Jeff Bezos of course also has its own online payment service, but it is nowhere near as widespread as the parent company. Nevertheless, Amazon Pay naturally benefits from the popularity and reputation of Amazon. So you need an active account with Amazon, in which the payment information is already stored. To buy, you just enter your username and password and Amazon processes the payment here as an intermediary. The fees are comparable to those of PayPal. Sensitive data does not have to be entered by the customer.

Amazon Pay fees for payers: There  are no fees for customers

Amazon Pay fees for payees:   1.90% of the invoice amount and € 0.35 per transaction

Does Amazon Pay offer buyer protection? Yes

Advantages of Amazon Pay over PayPal: 

  • no transfer of payment data to third parties
  • no additional account with the dealer required
  • high security standard

Disadvantages of Amazon Pay compared to PayPal: 

  • only usable at Amazon
  • Consumer protection concerns

Giropay

The online payment service giropay , like paydirekt, is also a joint project of various German credit institutions. These include the Postbank, Sparkassen and all Volks- and Raiffeisenbanken. You need an account with one of the participating banks and when paying online you will then be forwarded to the respective account. Giropay is also not that widespread and there is no buyer protection.

Giropay fees for payers: There   are no fees for customers

Giropay fees for payees:  € 99 setup fees, € 9.90 monthly fees (100 transactions included), from the 101st transaction – € 0.09 transaction costs, min. € 0.33 and max. 0.95% of sales, 0.49 € per age verification, € 0.19 per payment confirmation

Does Giropay offer buyer protection?  No

Advantages of Giropay compared to PayPal: 

  • no additional registration required
  • Transfer is much faster than online transfer
  • high security standard
  • no privacy concerns 

Disadvantages of Giropay compared to PayPal: 

  • no buyer protection
  • no assumption of the return costs
  • so far there have been frequent phishing attacks
  • is not supported by all banks

Apple Pay

With Apple Pay, Apple offers a mixture of online payment services and contactless in-store payments . With the help of newer Apple devices, payment is unfortunately only possible for a limited group of people. High security standards apply and no sensitive data is stored on the device. It is always worth taking a closer look at products and services from Apple. But we should only venture this look in some time, because this payment service is currently not a real alternative.

Apple Pay fees for payers: There  are no fees for customers

Apple Pay Fees for Payees:  There are no fees for merchants

Does Apple Pay offer buyer protection? Yes

Advantages of Apple Pay over PayPal: 

  • no account required
  • high security standard
  • Pay quickly and easily online or at the POS
  • Payment details are not saved on the device
  • several loyalty cards can be saved in the application
  • Fees are borne by the financial institutions

Disadvantages of Apple Pay compared to PayPal: 

  • only possible for Apple users
  • is not offered by all banks
  • NFC payment not possible everywhere

Viacash

With viacash the online purchase is a little different. You pay normally in your online shop and receive a payment slip. You then have to pay this in cash in one of the affiliated dealer branches. You take this payment slip with you, either printed out or on your smartphone. Around 8,000 online shops are currently using the viacash service.

viacash fees for payers: there  are no fees for customers

viacash fees for payees:  1.90% of the invoice amount + 0.35 € per transaction, monthly license fee of 19.90 €

Does viacash offer buyer protection?  Yes

Advantages of viacash compared to PayPal: 

  • no account required
  • no transfer of payment data to third parties
  • no privacy concerns

Disadvantages of viacash compared to PayPal: 

  • Payment is made to a contractual partner in a local shop
  • is only offered by certain contractual partners

Master pass

Masterpass is the online payment solution from the credit card company Mastercard. Initially only intended for customers, Masterpass is now available to all credit card owners. The customer’s credit card is stored with Masterpass as a means of payment and purchases are billed to it. Again, there are no fees for the customer. Masterpass is available as an app or you can use it to pay as normal in online shops. In Germany, however, this solution has already been discontinued. However, it is still available in other countries such as Austria.

Masterpass fees for payers: there  are no fees for customers

Masterpass fees for payees: there  are no fees for merchants

Does Masterpass offer buyer protection?  Yes

Advantages of Masterpass over PayPal: 

  • high security standard
  • no fees
  • several loyalty cards can be saved in the application
  • Customers benefit from the bonus program
  • Credit card details do not have to be entered in the online shop

Disadvantages of Masterpass compared to PayPal: 

  • Billing only possible via credit card
  • no longer available in Germany

The 11 best alternatives to PayPal for business (international) online payments

WorldRemit

WorldRemit also offers a service similar to Remitly . The company, founded in 2010 and therefore still quite young, works with a very affordable fee structure. The recipients can have the money transferred to their account, but they can also pick it up at a payout point or have it delivered to their home.

WorldRemit fees for payers: The  amount of the fee depends on the amount of money and the destination country, transaction fee between € 0.95 and € 21.99, the first transfer is free, cash advance fee when paying by credit card

WorldRemit fees for payees:  fees of the banking institution may apply , small fee for currency conversion

Does WorldRemit offer buyer protection?  No

Advantages of WorldRemit over PayPal: 

  • large network of cash pick-up locations
  • wide range of transfer options
  • faster and more convenient money transfer
  • high security standard

Disadvantages of WorldRemit compared to PayPal: 

  • limited number of countries of origin
  • Often expensive compared to other providers, especially for higher amounts
  • country-specific transfer limits
  • complicated registration process (some documents are required)

If you as a freelancer or entrepreneur also deal with business, international payments, then you should take a closer look at the following PayPal alternatives.

Payoneer

Payoneer is an online payment service provider that enables you to make payments and receive money. This works worldwide and across the borders of currencies. Payoneer is only intended for business transactions. Not only are payments made by companies, but Payoneer also works with various marketplaces, such as Amazon, Fiverr or Upwork. Payoneer already has more than 4 million users and is available in 200 countries.

Payoneer fees for payers: 

Transaction costs: 1.00% (ACH Bank Debit), 3.00% (credit card), 1.00% (local bank transfer), up to 2.00% + 1.50 € (if the recipient does not have a Payoneer account owns), foreign currency fee 0.50% of the transaction amount, account fee of 29.95 € (only if no transactions have taken place in the last 12 months)

Payoneer fees for payees:  Transaction costs: 0 – 1.00% for transfer in USD, 3.00% (credit cards), 1.00% (ACH Bank Debit), account fee of 29.95 € (only if in the last 12 No transactions have taken place in months), currency conversion fee

Does Payoneer offer buyer protection?  No

Advantages of Payoneer over PayPal: 

  • wider range of currencies than PayPal
  • wide variety of payment services

Disadvantages of Payoneer compared to PayPal: 

  • many different fees
  • Currency exchange can be difficult
  • strict terms and conditions  

Skrill

The Skrill payment system is a classic prepaid solution. You pay a sum of money in advance from your current account or credit card into your Skrill customer account. You will then have this available there to shop on the Internet. You cannot overdraw your Skrill customer account and thus protect yourself from spending too much. Unfortunately, as the company is based in England, the balances are not protected in the event of bankruptcy. However, you decide for yourself how much money you want to deposit into your customer account.

Skrill fees for payers:  1.00% transaction costs, € 25.00 (credit and debit cards) € 7.00 (direct debit) chargeback costs, € 1.00 per month if the account has not been used for more than 12 months

Skrill fees for payees:  2.90% + € 0.25 transaction costs, € 0.49 per transaction chargeback costs, € 1.00 per month if the account has not been used for more than 12 months, currency conversion fee

Does Skrill offer buyer protection? No

Advantages of Skrill over PayPal: 

  • Bank details are not transmitted to merchants
  • Cost control due to prepaid system

Disadvantages of Skrill compared to PayPal: 

  • not widely used so far
  • Cancellations are not possible
  • additional services for a fee
  • so far there have been frequent phishing attacks

TransferWise

TransferWise could possibly turn into a small international money transfer revolution. If you want to transfer money abroad, for example to the USA, with TransferWise, you first transfer the amount to TransferWise. They are then looking for another customer in the USA who would like to transfer a similar amount abroad. 

The recipient of your money in the US will then get the money from the customer in the US who wants to transfer an amount similar to yours. As a result, money is never actually sent and no currencies have to be converted. Simple and ingenious. TransferWise currently only works in a few countries, but that can change quickly.

TransferWise fees for payers:  when transferring € 2,000 there is a 0.045% transaction fee, exchange fee for currencies: 0.33% -3.56%, 

TransferWise fees for payees:  fees of the bank may apply , small fee for currency conversion

Does TransferWise offer buyer protection?  No

Advantages of TransferWise over PayPal: 

  • 90% of all transactions are transmitted within one working day
  • Up to 14x cheaper than PayPal
  • Clear price structure

Disadvantages of TransferWise compared to PayPal: 

  • Limited number of currencies available

PaySend

Payments can be made in more than 80 countries via PaySend. You set up a PaySend user account and can then use it to make payments. All money transfers are certified according to international standards, so they are safe. Before each transfer, PaySend transparently displays the fees and the exchange rate. The money is processed in seconds and reaches the recipient.

PaySend fees for payers:  1.50 € transaction fee up to 150.00 €, from 150.01 € plus 1.00% transaction fee

PaySend fees for payees:  fees of the bank may apply, fees for currency conversion

Does PaySend offer buyer protection?  No

Advantages of PaySend compared to PayPal: 

  • high security standard
  • wider range of currencies than PayPal
  • wide variety of payment services
  • simple fee model

Disadvantages of PaySend compared to PayPal: 

  • complicated registration process (some documents are required)
  • lack of transparency in the source of the exchange rate

Stripe

Stripe is an online payment service that offers its customers a lot of additional services and software tools. Simple purchases on the Internet as well as subscription models can be billed via Stripe. In order to be able to collect the money from the customer, he must either enter his bank details, credit card information or PayPal account.

Stripe Fees for Payers: There  are no fees for customers

Stripe fees for payees:  1.40% + € 0.25 transaction fees (for European cards), 2.90% + € 0.25 transaction fees (for non-European cards)

Does Stripe offer buyer protection?  No

Advantages of Stripe over PayPal: 

  • Real-time fee reporting and transparent fee structure
  • Widely used PayPal alternative
  • wide variety of payment services
  • high security standard

Disadvantages of Stripe compared to PayPal: 

  • Access to the money is only possible a few days after the transaction
  • Merchant accounts are only available in a few countries

MoneyGram

You can send money via MoneyGram to over 350,000 locations worldwide, which are spread over 200 countries. You can make your payments through the MoneyGram website or in one of the branches and send them to either a bank account or a mobile number. Payment transactions are quite safe, as the recipient has to identify himself and show a reference number when picking up the money. The money is with the recipient in just 10 minutes. The fees at MoneyGram are relatively high and put you off at first.

MoneyGram fees for payers:  € 1.99 transfer fee, € 3.99 transaction fee, surcharge for the exchange rate

MoneyGram fees for payees:  fees of the banking institution may apply , fee for currency conversion

Does MoneyGram offer buyer protection?  No

Advantages of MoneyGram over PayPal: 

  • Widely used PayPal alternative
  • high security standard
  • Money transfers can be accepted in cash, to bank accounts and mobile wallets
  • large network of cash pick-up locations
  • fast money transfer

Disadvantages of MoneyGram compared to PayPal: 

  • Exchange rate surcharge
  • significantly more expensive than specialized online providers

CurrencyFair

With CurrencyFair you can transfer your money abroad and you usually get a better exchange rate than with your local bank. This works according to the peer-to-peer principle. You transfer the money to CurrencyFair and they look for a counterpart who would like to transfer a similar amount in your direction. If both then agree with the exchange rate, then the transfer transaction is carried out. By the way, your money is completely secured by the Bank of Ireland.

CurrencyFair fees for payers:  € 3.00 transaction fee, possibly a commission fee for currency exchange of 0.1% –0.6%, small surcharge on the exchange rate

CurrencyFair fees for payees:  fees of the bank may apply , small fee for currency conversion

Does CurrencyFair offer buyer protection?  No

Advantages of CurrencyFair over PayPal: 

  • Fixed fee (even large amounts at low costs)
  • very small surcharges on the exchange rate
  • high security standard
  • quick and easy money transfer

Disadvantages of CurrencyFair compared to PayPal: 

  • limited number of supported currencies
  • bank transfers can only be paid for by bank draft
  • complicated registration process (some documents are required)

Xoom

The payment service provider Xoom was bought by PayPal some time ago. With Xoom it is now possible for PayPal customers to transfer money to friends and relatives abroad. With the help of your PayPal account, you can easily open your Xoom account and use the saved payment information. Unfortunately, it is not possible to use your PayPal credit.

Xoom fees for payers:  Transaction fee between € 1.00 and € 3.00

Xoom fees for payees:  fees of the bank may apply , € 4.99 fee for cash pick-up, fee for currency conversion 

Does Xoom offer buyer protection?  Yes No

Advantages of Xoom over PayPal: 

  • large network of cash pick-up locations
  • large range of transfer options
  • high security standard
  • widespread especially in Latin America
  • fast money transfer
  • Service from PayPal

Disadvantages of Xoom compared to PayPal: 

  • non-transparent exchange rate surcharge
  • significantly more expensive than other specialized online providers
  • complicated registration process (some documents are required)

Western Union

In order to make a payment abroad with Western Union , both partners need a customer account with Western Union. The payment into this account is then made by bank transfer or credit card payment. The money transfer is then in principle like a normal transfer. The recipient can then have the money paid out at a branch nearby. Western Union now has more than 500,000 locations worldwide.

Western Union fees for payers:  1.90 € –4.90 € transfer fee, 7.00 € transfer fee for cash deposits

Western Union fees for  payees : Collection fee for cash transfers between € 9.90 and € 36.00, hidden fees through currency conversion

Does Western Union offer buyer protection?  No

Advantages of Western Union over PayPal: 

  • large network of cash pick-up locations
  • wide range of transfer options
  • wide range of currencies
  • high security standard
  • easy and quick money transfer

Disadvantages of Western Union compared to PayPal: 

  • more often problems with the refund if the money transfer was not successful
  • Exchange rate surcharge
  • not all transfer offers apply in all countries
  • Transfers to certain countries involve high fees

Remitly

Remitly is an online payment provider that works completely online and therefore has very favorable conditions. All you have to do is set up a customer account with Remitly and you can then make your payments in many countries. You can transfer the money directly to a foreign account, or the recipient can have the money delivered. However, you need the exact data on the recipient’s ID card.

Remitly fees for payers:  Transaction fee between € 0.00 and € 4.99

Remitly fees for payees:  if necessary, fees of the bank may be incurred , small fee for currency conversion

Does Remitly offer buyer protection?  No

Advantages of Remitly compared to PayPal: 

  • large network of cash pick-up locations
  • Fixing of exchange rates possible
  • 100% satisfaction guarantee (otherwise fees will be refunded)
  • faster, easier and cheaper money transfer
  • high security standard

Disadvantages of Remitly compared to PayPal: 

  • limited number of countries possible
  • Fees are significant for small transfer amounts

Conclusion: Large selection of great alternatives to PayPal

We hope that we were able to show you a few alternatives to PayPal in this article. Each payment provider has its advantages and disadvantages, strengths and weaknesses. We wanted to give you an overview here so that you can make the right decision for yourself. Every entrepreneur has different demands and needs. Was the right provider there for you?