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Payment methods: 10 alternatives to PayPal for your online store

The PayPal payment method has become a standard in every online store. But PayPal has some disadvantages, especially for merchants and online shop owners. We would like to present these to you in this article and suggest ten alternatives to the PayPal payment method that you can also integrate into your store. Do you need help with the creation or integration of a payment method in your online store? Feel free to contact us and we will assist you with years of expertise in e-commerce.

Reading time 15 min

 

What to expect in this article:

  1. PayPal as a payment method
    1. The advantages that PayPal offers
    2. PayPal disadvantages that should not be ignored
      1. PayPal fees
      2. Account blocks
      3. Privacy
  2. Alternatives to PayPal
    1. Giropay (Paydirekt)
    2. Amazon Pay
    3. Instant service
    4. Apple Pay
    5. Google Pay
    6. Skrill
    7. Credit Cards
    8. Masterpass
    9. Click-to-Pay
    10. cashpay.com
  3. Mollie as a complete solution for your online shop
    1. What is Mollie?
    2. How does Mollie work?
  4. FAQ

PayPal as a payment method in your online shop

PayPal is a very well-known online payment service, which is also offered in just about every online store. According to the company itself, there are currently over 277 million active users worldwide. Especially for buyers, PayPal is an easy way to complete transactions without incurring additional costs. Due to the many PayPal users, it makes perfect sense to integrate the payment method in your online store. However, you also have to reckon with a few disadvantages, which are not so insignificant. Which advantages and disadvantages PayPal has as a payment method in your webshop, we want to present to you in the following.

Advantages of the online payment method

The big advantage of PayPal for online store operators is that many customers in Germany already use PayPal. Once the customer's account is connected to PayPal, a purchase can be completed in a few seconds and without any effort. Of course, you as an online merchant also benefit from this: If the purchase can be completed quickly, the probability that a customer will do exactly that is higher. If, on the other hand, the process takes a long time and data such as the IBAN may have to be searched out or checked again, the purchase may not be completed. The chance that something will come up for the customer - it just has to ring the doorbell - is much more likely. In Germany, PayPal is the most popular payment method for online shoppers. But PayPal is also very popular worldwide: the payment service provider is used in over 200 markets and in 25 different currencies. Of course, it would be practical to make this payment method available in your store as well.

Disadvantages of PayPal for online merchants

Unfortunately, PayPal as a payment method for you, the online merchant, also has a few disadvantages. You should be aware of these disadvantages when you integrate PayPal in your store. They could also be the argument why you finally decide against it.

The costs of PayPal

How much does PayPal actually cost? For your customers PayPal is free of charge. However, you as an online merchant have to pay fees for each transaction. The PayPal fees are calculated according to your monthly turnover. If you have a turnover of up to 5,000 euros, you pay 0.35 euros per transaction and 1.9% of the purchase amount. From 5,001 euros to 25,000 euros, the percentage drops to 1.7 and from 25,000 euros to 1.5 percent.

PayPal account blocking

As a rule, the PayPal account is not blocked. However, there are always reports from online merchants that they no longer have access to your account and therefore can not get the money. Why the accounts are blocked is difficult to say. Often, blocked accounts are said to be related to money laundering or terrorist financing. For this, it is even enough that the names are similar to known and verified cases. In order to unblock the account, official documents must be submitted, such as a copy of the identity card. Sometimes even a credit card statement is due. If you have submitted the required documents, this does not automatically mean that your account will be free again quickly: a period of several months is possible.

Lack of data protection

The topic of data protection is unfortunately not so clearly regulated at PayPal. Your data is stored on various servers, some of which are located in the U.S. and may also be passed on to third parties there. According to the company's privacy policy, they reserve the right to pass on information about the account. Recipients of your data could be banks, marketing companies, analysis services, auditors and many more. By the way, you cannot object to the sharing of your data, although this is not compliant with European data protection law.

PayPal alternatives

There are also good alternatives for your online store, if the disadvantages of PayPal have made you think. You don't have to use PayPal in your online store for customers to complete a purchase. In the following, we would like to introduce you to ten alternatives that you can integrate into your webshop as a means of payment.

The ten best alternatives for PayPal:

  • Giropay (Paydirekt)
  • Amazon Pay
  • Instant service
  • Apple Pay
  • Google Pay
  • Skrill
  • Credit Cards
  • Masterpass
  • Click-to-Pay
  • cashpay.com

Giropay

An overview of the advantages and disadvantages:

Giropay advantages Giropay disadvantages
  • There is an app
  • Bank data is not forwarded to the online store, but remains with the bank. This is an additional security factor for your customers, which can be very convincing
  • There is a buyer protection
  • Money can be sent to friends and family
  • No separate account necessary for customers
  • The online merchant in turn has the advantage of receiving an instant payment guarantee
  • No risk of non-payment as with other payment methods
  • Not usable worldwide
  • Not all credit institutions participate in Giropay
  • A payment default is only secured up to 10.000 Euro
  • Fees are possible for individual merchants

A good PayPal alternative is Giropay. Because to use Giropay, your customers only need online banking through one of the participating banks and can complete a purchase directly. If Giropay is selected as the payment method, then the customer only has to enter his bank code and is forwarded directly to the online banking of his bank. With confirmation by TAN, the transfer goes directly out.

Another option for payment with Giropay is the Paydirekt app. Giropay and Paydirekt have merged into a single payment service. It is therefore one and the same payment method. Customers can make payments via their smartphone using the Paydirekt app. Incidentally, money can also be sent to friends and family in this way. So this function is very similar to PayPal.

Amazon Pay

The advantages and disadvantages:

Amazon Pay Advantages Amazon Pay disadvantages
  • Payment data does not reach third parties
  • Online checkout: Thus, customers remain on your site and are not redirected to Amazon
  • Is mobile optimized, no additional setup for mobile devices
  • Customer needs an Amazon account
  • Consumer protection is questionable
  • Fees of 1.9 percent as well as 35 cents per individual transaction
  • Poor customer service from Amazon can negatively impact you as an online store owner

Amazon Pay is the marketplace and company Amazon's own payment method. You can use it in your online store so that your customers who already have an Amazon account will also complete their purchase from you through Amazon. Customers who want to pay with Amazon Pay therefore only need to have an Amazon account with an email address and password to make a payment in your store. Sounds simple, doesn't it? Big disadvantage here is that the fees are just as high as with PayPal as well. In addition, Amazon Pay does not do so well when it comes to consumer protection. By paying with Amazon Pay, the company knows about the consumer behavior of your customers and could also take advantage of this information. We doubt whether Amazon Pay is really the best alternative compared to PayPal. Take a look at our other alternatives instead.

Instant service

Advantages and disadvantages:

Sofort Service Advantages Instant Service Disadvantages
  • Customers do not have to create an account
  • Usually hardly any fees
  • Independent of banks
  • Online merchants receive payment confirmation directly
  • Payment processing is fast
  • The instant service has insight into the payments of your customers in your online shop
  • The instant service can also check whether your customer's account is covered
  • There are fees of 0.9% plus 0.25 € (net) per successful payment processing - in addition there is a one-time fee of 59.90 € and a monthly fee of 4.90 €.

For customers with online banking access, the Sofort service is a good option to complete a payment in your webshop. The Sofort-Service or earlier SOFORT Überweisung belongs to the payment service provider Klarna. If you have installed it in your online store, your customers do not have to register there to complete a purchase. With a secure data connection your customer gets directly to his online banking and can log in to his account. By confirming with a TAN, the payment is verified. However, during this process Sofort GmbH checks whether the account is covered. Of course, the payment service provider can use this information for its own purposes. In addition, there are costs for you as a merchant. The costs per transaction are lower compared to PayPal, but a monthly and a one-time fee are charged. However, if your online store has a large turnover, the payment with Sofort service will turn out to be cheaper than with PayPal.

Apple Pay

The advantages and disadvantages of Apple Pay:

Apple Pay Advantages Apple Pay disadvantages
  • Apple Pay transactions are no more expensive than regular credit card transactions
  • Anonymous payments
  • Checkout process is fast and easy for customers
  • Integration effort into your German online store is low
  • Only suitable for customers who are Apple users

Another alternative that you can integrate into your web store is Apple's payment service provider: Apple Pay. Apple Pay was initially used in combination with the iPhone or the Apple Watch to pay in stationary retail. With the help of an NFC (Near Field Communication) option in the respective device, a contactless data transfer can be started or the payment can be processed.

Meanwhile, Apple Pay can also be integrated into your online store as a means of payment. A prerequisite for payment in your store is an account for your customers. The big advantage is that payments with Apple Pay do not cost you more than a normal credit card transaction. The biggest disadvantage, however, is that you can only reach Apple users.

Google Pay

The advantages and disadvantages of Google Pay:

Google Pay Advantages Google Pay disadvantages
  • Own app
  • A lot of emphasis is placed on security for customers
  • Fast payment
  • Free for customers and merchants
  • There are not many users yet
  • Also few banks support Google Pay so far
  • Only for Android users

Google Pay is the payment service of the Google company and has also been available in Germany since 2018. As a rule, Google Pay can be used for in-app payments. Likewise, the payment method is used in stationary retail. However, third-party providers also have the option of integrating the Google Pay function in their own online stores. The biggest disadvantage so far is that Google Pay is supported by very few banks. To offer the broad mass of your customers a good payment option, Google Pay alone is not yet the solution. However, it can be offered as an add-on to make it easier for a few customers to pay in your store.

Skrill

Skrill advantages and disadvantages:

Skrill Advantages Skrill disadvantages
  • Account data remains with Skrill and is not shared with the various online merchants when payments are made
  • Not widely used
  • Prepaid model is also a risk for customers, as the money could be gone if Skrill goes bankrupt

A not so common option is Skrill. Skrill is a prepaid system from England. Your customers need an account with Skrill and then they can deposit money to their Skrill account to have funds for payments in other stores. The deposit to the Skrill account is done either by credit card or by checking account. In itself, Skrill is a good payment method as bank details of private shoppers are not given to any number of online merchants when purchases are made. However, very few online shoppers use this method and that they create an account then when they want to make the purchase is unlikely. So, a proper alternative that can stand alone without any others or almost alone as a payment option in your store is not Skrill.

Credit cards

The advantages and disadvantages of credit card payment in the online store:

Credit cards advantages Credit cards disadvantages
  • Good reputation, because credit card acceptance contract is created only after strict verification
  • The possibility to reach many customers, because there are many credit card holders
  • One transaction costs only about 7-9 cents
  • Payments are possible only by entering the bank data, which most people do not know by heart.
  • More expensive to integrate this into the online store (credit card acceptance contract + payment service provider)
  • Fees for the PSP

Many online stores offer credit card payment in their store. About 36 percent of people in Germany own a credit card*. This means that a very large proportion of Germans can use credit card payments if you integrate them into your store.

For payments in online stores, however, this option can be a nuisance. After all, your customers have to provide their bank details, which they most likely do not know by heart. Moreover, incorporating credit card payment is a bit more cumbersome than for other payment service providers. This is because, in addition to a credit card acceptance contract, you also have to take care of a payment service provider, or PSP for short, which is the interface between your store, your customers and the financial institution. The PSP provides the technical details necessary for integrating the payment system into your web store. As you can already guess, there are fees involved.

Click-to-Pay

The advantages and disadvantages of Click-to-Pay:

Click-to-Pay Advantages Click-to-Pay disadvantages
  • User data and passwords do not have to be entered again and again
  • Good security system
  • Free of charge for customers
  • Can be combined with all credit cards
  • Acceleration of the payment process
  • Personal data is not disclosed to merchants, customers can pay securely
  • Can only be used in combination with a credit card

Click-to-Pay is a really good alternative to PayPal that also works the same way. This is because it is also an electronic wallet or a so-called e-wallet, which works in combination with a credit card. If your customers want to use this variant of payment methods, then they must have a credit card from Visa, American Express, Mastercard or Discover, for example. They sign up once with Click-to-Pay and create their own account, which includes data such as the credit card number, etc. Once this is done, however, paying in online stores with Click-to-Pay is super easy! This is because delivery and address information is carried out on its own and also the password does not have to be used as of now if customers use Click-to-Pay as a browser application or iOS as well as Android app. So, this secure alternative to PayPal is very easy to use and should be taken into consideration when you equip your online store with various payment methods.

Masterpass

Masterpass advantages and disadvantages:

Masterpass Advantages Masterpass disadvantages
  • Masterpass can be used in combination with different credit cards like Mastercard, American Express, VISA or Diners Club as well as with the debit card Maestro Card
  • Free of charge for customers
  • High security standards
  • Buyer protection is included
  • Can only be used with credit cards and/or Maestro Card
  • Can only be used in 600 stores in Germany so far and is also less well known among customers

Masterpass is the own payment method of the Mastercard, which can be used however also with other credit cards such as the American express or with VISA by the buyers of your products free of charge. In just a few clicks, the transaction is usually completed. Beforehand, the customer must have registered with Masterpass, added personal data and their own credit card. Then Masterpass only has to be selected as payment method in your online store.

Barzahlen.com

The advantages and disadvantages of Barzahlen.de:

Barzahlen.de Advantages Barzahlen.de disadvantages
  • Is free for customers
  • The data protection problem does not arise
  • High buyer protection
  • More effort due to payment in a retail store
  • Customers must have a participating store on site
  • Fees for merchants

You may have heard of Barzahlen.de, which is a way to pay in cash when shopping online. The customer orders his desired items online and then pays for them in the store. This means that online banking functions and the possession of credit cards are not necessary for your customer. However, this option is not practical for all customers. There are a total of 10,000 stores where your customer can then go to the stores with a payment slip that they received in your store. The prerequisite, of course, is to have a store nearby that supports the payment method. In addition to supermarkets such as Rewe or Penny, payment can also be made in the drugstore dm and many other stores. Those who don't like to pay online will certainly approve of this option. For all your other customers, this means a lot of extra work. If you want to integrate Barzahlen.de into your store, then this really only makes sense if you sell products that are not available in every stationary store.

As a merchant, you also have to pay a fee for this payment method, but it is not known exactly how high this fee is. Your customers, on the other hand, use the function free of charge.

Mollie - the simple solution for your online shop

Now we would like to introduce you to Mollie. Because with Mollie you actually have the complete solution for the payment methods in your webshop, as it is a payment service provider. Mollie takes care of the payment processing in online stores and is therefore the perfect tool for your own store!

What is Mollie?

The company Mollie was founded in 2004 in the Netherlands and is one of the best known PSP (Payment Service Provider) in Europe. In total, over 130,000 customers already use Mollie to process payments in the online world in a simple and straightforward way. Mollie is cloud-based and can be quickly integrated into any online store. This means you can offer different payment methods to your customers in no time at all and only need to sign a contract with Mollie itself, rather than each individual payment method itself.

How does Mollie work?

With Mollie you can easily offer your customers a range of different payment methods. The most common types can be easily integrated into your online store with plugins. But you can also use Mollie's API to build your own payment methods.

The conditions are also simple. You sign a contract with Mollie and have access to all common payment methods that Mollie offers. These include, for example, card payment with VISA, American Express or Mastercard as well as all payment options from Klarna (SOFORT Banking, Pay Now, installment purchase and invoice), PayPal, Apple Pay, Giropay, in3, SEPA direct debit, iDEAL, paysafecard and much more. The cost per transaction varies depending on the payment method that is eventually used in your store.

Did you know that we are an official Mollie partner? We are familiar with the payment solution for your online store and are happy to help you integrate Mollie. In addition, you have the opportunity to benefit from better conditions and pricing models from a transaction volume of 50,000 €. With us as a partner, this is even possible from the first euro. Customers we have served so far and helped with Mollie integration are for example: New Black and*.

You also want support with the integration of different payment methods with Mollie or even without? We at EXWE are your contacts with experience. Just give us a call and we will discuss the details.

FAQ

To conclude our article about alternative PayPal payment methods, we would like to answer the most frequently asked questions about the topic. So you are well prepared. We hope that we could clarify all your questions. If this is not the case and a question about payment methods in the online store is still unanswered, you can always contact our experts at EXWE.

What payment methods are available?

There are many payment methods, whether online or offline. Offline, for example, cash payment, credit cards, giro cards and payment with vouchers are the most common. Online, there are other payment methods such as direct debit, cash on delivery, e-wallets (i.e. electronic wallets such as PayPal), instant bank transfer, payment in advance and purchase on account.

What options are there for paying online?

If you want to store online, you also have to pay online. This is how it usually works. Various payment methods such as PayPal or credit cards are available to you depending on the online store. The online shop operator also has the option of integrating different payment methods in his online store. It is important for you as a buyer or merchant that the selected payment method is secure. Possibilities to pay online are for example:

  • Credit card payments
  • Purchase on account
  • Prepayment
  • PayPal, Klarna and more
  • SEPA direct debit
  • and more

Why should I use alternatives to PayPal?

Payment with PayPal actually has no disadvantages for the buyer. The only problem that comes with using PayPal is the issue of data protection. This is because it has not been comprehensively regulated to date. Data collected via PayPal is stored on servers located all over the world, including in the USA. The data could also be passed on to third parties. This should be clear to you as a buyer if you use PayPal.

As a merchant, PayPal also has the disadvantages that fees per transaction are relatively high and an actually unfounded account block is possible. The lifting of the block is often lengthy. Therefore, it is worth looking into alternatives to PayPal.

What are the requirements for using PayPal alternatives?

What requirements are necessary for using some PayPal alternatives depends entirely on the type of alternative. For credit card payments, buyers need a credit card. Merchants, on the other hand, must have a credit card acceptance agreement and use a payment service provider to offer the payment option in their online store. With Apple Pay, on the other hand, the integration effort for merchants is very low. Customers can use Apple Pay if they own an Apple device.

What PayPal alternatives are there?

You can make various payment methods available for your web store. From PayPal alternatives like Google Pay, Apple Pay and Sofort service to Giropay, Skrill and Amazon Pay, there are a few options. So you don't have to limit yourself to PayPal or you can even do without PayPal altogether if you don't like the terms of the payment service provider.

What is better than PayPal?

It is not possible to make a general statement about what is better than PayPal. It always depends on which features are particularly important to you. When it comes to fees, alternatives to PayPal that are significantly better include credit card payment or Google Pay.

Can I pay with PayPal without online banking?

If you or your customers want to use PayPal, it is not necessary to have online banking. It is sufficient to provide the bank details once through PayPal. For the successful registration with PayPal, a small cent amount is then transferred, the purpose of which is a code. This code must be specified at PayPal, so that the verification and registration goes through. Subsequently, for each payment with PayPal, the corresponding amount is debited from the bank account by PayPal. On the other hand, the respective merchant receives the payment from PayPal and not directly from the customer's bank account. When a transaction is completed, the buyer also receives a confirmation by mail.

*(Source: https://www.welt.de/finanzen/verbraucher/article176505524/Kreditkarte-Warum-die-Deutschen-bis-heute-die-Kreditkarte-verschmaehen.html

Meike
Meike
from 17. August 2022

Hello, my name is Meike. I take care of the EXWE back office and am responsible for our social media channels. All of our articles are meant to make your life easier and help you make decisions. Nevertheless, it can happen that something remains unclear, so: If you have questions about this article you can easily reach me at +49 231 93149827.

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