Most payment gateways such as PayPal were established years ago as a solution to minimize the cost that small and medium online businesses had to incur by hiring merchant services to process credit card payments from their customers.
Although some payment gateways are no longer available, PayPal has remained one of the most popular alternatives to accept credit cards. Nevertheless, the fees PayPal charges have increased considerably and many Internet entrepreneurs have turned to other PayPal alternatives for their eCommerce needs.
Skrill – formerly known as Moneybookers – is rapidly becoming a serious PayPal competitor. Skrill serves many areas of the world where PayPal is unavailable (such as Asian, Middle Eastern, and African countries) and charges lower commissions per transaction than PayPal.
Another PayPal alternative is a relatively new service called eWay, which is gaining increasing popularity among European and Australian Internet businesses. The company is based in Australia and it currently serves only Australia, New Zealand, and the United Kingdom.
Other popular PayPal alternative payment gateway Pay Simple charges a monthly fee in addition to transaction fees. If you only need an invoicing system, you can subscribe to their Invoice Simply service. However, to have access to all features, including accepting credit cards, you will need to sign up for their PaySimply Pro service at a much higher monthly fee.
Conversely, Stripe payment gateway is a good PayPal alternative because there are no sign up or monthly fees and it only charges a nominal 2.9 percent plus 30 cents per successful transactions. There are no other fees for their full services.
Another PayPal alternative that has been around for a long time is 2 Checkout. It is free to sign up and their fees are competitive with other payment gateways. However, it has not become very popular because it mostly requires you to upload your inventory and use their shopping cart. It is more suitable for retailers than for service providers.
A good browser search for payment gateways will provide you with many other PayPal alternatives, including Google Checkout, which has become very popular in the past few years as well. Google Checkout is linked to your Gmail account making it easier for you to track purchases and manage orders. Google Checkout is free to set up and accepts all major credit cards.
Whichever PayPal alternative payment gateway you choose for your eCommerce needs, make sure that it is compatible with your chosen shopping cart application.