Payment methods: 10 alternatives to PayPal
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
- PayPal as a payment method
- Alternatives to PayPal
- Mollie as a complete solution for 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.
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.
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.
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.
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.
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
- Credit Cards
The advantages and disadvantages in an overview:
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 use the Paydirekt app to make payments via their smartphone. Incidentally, money can also be sent to friends and family in this way. So this function is very similar to PayPal.
The advantages and disadvantages:
|Amazon Pay Advantages
|Amazon Pay disadvantages
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. Why don't you take a look at our other alternatives?
Advantages and disadvantages:
|Sofort Service Advantages
|Instant service disadvantages
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.
The advantages and disadvantages of Apple Pay:
|Apple Pay Advantages
|Apple Pay disadvantages
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.
The advantages and disadvantages of Google Pay:
|Google Pay Advantages
|Google Pay disadvantages
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 advantages and disadvantages:
A not so common option is Skrill. Skrill is a prepaid system from England. Your customers need to have 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.
The advantages and disadvantages of credit card payment in the online store:
|Credit cards advantages
|Credit cards disadvantages
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.
The advantages and disadvantages of Click-to-Pay:
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 advantages and disadvantages:
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.
The advantages and disadvantages of Barzahlen.de:
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.
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!
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.
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. You also have the possibility to benefit from better conditions and pricing models with a free volume of up to 50.000 €. With us as a partner, this is even possible from the first euro. Customers that we have supported so far and helped with the Mollie integration are, for example: Neues Schwarz and Bauportal24h.
To conclude our article about alternative PayPal payment methods, we would like to answer the frequently asked questions around 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.
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.
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:
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 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.
It is not possible to make a blanket statement about what is better than PayPal. It always depends on what features are most important to you. When it comes to fees, alternatives to PayPal that are significantly better include credit card payments or Google Pay.
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.
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