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online payment servicesPaypal is the top dog when it comes to online payment services. It is generally easy to use and a relatively secure way to send money while buying products & services online (whether eBay or other online merchants), but it does have its downsides. The web is filled with folks who have had their Paypal account frozen with no explanation and it can severely impact a business (or person) if it affects you for a length of time.

Addressing the some of the downsides of Paypal, other businesses have ‘stepped up’ to provide their own payment services. They range from smaller startups to well established players throwing their hat in the online payment arena. Mostly the service that would work best for you depends most upon what you actually use online money transfers for. With Paypal, many people only use a certain aspect of it while never touching others. Let’s go over a few of these online payment services and check out the differences and why you might use one over another.

1. Venmo

online payment services

Venmo is a Philadelphia-based startup in the mobile payment arena. Starting as a cell-phone based payment system, you can also send payment or a bill to a friend whom you have already connected with or to any cell phone, email address or twitter handle.

Much like Paypal, you carry a balance and your payments or charges credit and debit that balance. You add more funds by linking a credit card or bank account and Venmo uses bank-grade security throughout the transaction process.

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Venmo started as a “Friend” payment service but you can also sign up as a business as long as you have a cell phone to coordinate payments. For Friend-to-Friend transfers there is no fee. Staff writer Steve is already a great fan 5 Great Apps That Let You Send, Track, Manage & Do More With Your Money 5 Great Apps That Let You Send, Track, Manage & Do More With Your Money Read More of Venmo and I have seen its use expanding to more and more people.

Venmo is still invite-only but they were kind enough to set up a special invite code for MakeUseOf readers. Use ‘makeuseof‘ while signing up to gain access instantly.

2. Amazon WebPay

accept payments online

Amazon released their payments service back in 2008 Amazon Payments - The new PayPal Alternative from Amazon Amazon Payments - The new PayPal Alternative from Amazon Read More . Originally meant for merchants, they have also added a “personal” aspect to it named WebPay where you can send or receive money online or via cell phone. The Amazon Payments/Personal website has more details on the requirements for signing up.

3. Google Checkout

accept payments online

Google Checkout is definitely aimed at merchants more than anyone else. It takes the payment portion out of the transaction so that you simply send a buyer of your products to a checkout page which is powered by Google Checkout. When on that page, a buyer will enter their payment information – and then be sent back to your site with a confirmation of purchase.

4. Skrill / Moneybookers

accept payments online

Moneybookers is widely known as a replacement to PayPal which is also more international-friendly than some of the other providers. Moneybooks is beginning a transformation to Skrill – a rebranding and refocusing of their payment platforms. Their rates are usually cheaper than PayPal, but then again less people use it so that is the tradeoff you have. I’ve heard of a lot of folks turning to Moneybookers when PayPal has crossed them and they are mostly happy with their move.

5. 2Checkout

paypal alternatives

2Checkout is a payment processor which acts as a “middleman” between you (as a seller of items or services) and the payer. 2Checkout can accept credit cards, checks, and even PayPal itself as a form of payment but ads a management layer as well handling the whole checkout process. I’ve seen many merchants using 2Checkout as a payment provider on eBay stores as an alternative to PayPal. There is a $49 signup fee; so this is mainly meant for those with some higher volume sales and not casual transactions.

6. Traditional Merchant Accounts

online payment services

Finally on the ‘merchant’ end again, you can do what other businesses have been doing for decades and apply for a real merchant account. Having a merchant account gives you, with the use of a payment processor such as Authorize.Net, the ability to accept credit cards directly. There are some downsides to this. There is often a monthly fee that the other providers above to not charge, and you must be PCI compliant which is a whole other issue. However if you perform a lot of transactions and need to integrate a payment solution into your own shopping cart or system, then this is the only way to go.

Ask your local bank about merchant accounts, alternatively there are a ton of options available online (check Google) but frankly there are so many options it is hard to tell from the web which will work for you. Ask your friends for recommendations and do your homework to make sure you are going with a reputably provider (I’ve used BluePay, and they have been good but fee-expensive).

Which One Is For Me?

The answer to this question depends a lot on how you use the online payment service. If you simply transfer money between friends – as a sort of IOU – then Venmo would definitely be my recommendation. If you are selling items to ‘strangers’ they might be put-off by Venmo simply because they are not well known, and in this case going with a bigger name such as Google or Amazon may work best. Finally if you are a high volume merchant or just do a lot of business, it would be wise to evaluate the other options to see what works best with you.

Do you have any other recommendations for PayPal alternatives or experiences with the ones above? Let us know in the comments below!

Image credit: Shutterstock

  1. sofia
    August 11, 2016 at 4:27 pm

    My account was "frozen" for a questionable charge of $9? I looked on my account and saw nothing on it that was not authorized. They said it's because they stopped it? then they sent me 5 pages of charges dating back to 2011 to go through and confirm that they were indeed my authorized charges? Needless to say...I called and closed my account. Let me also add that I have always been on time with paying my balances since I opened the account.

  2. RKM
    May 1, 2016 at 1:54 pm

    When a company like PayPal provides services to barbarians in third world countries then turns around and polarizes or decides not to open an office in a US state, then I say "screw you PayPal hypocritical assholes

  3. GB
    April 18, 2016 at 1:27 am

    There's a sponsered google ad for paypal right in the middle of this article ?

  4. CHARLIE
    February 11, 2016 at 7:16 pm

    I WILL CLOSE PAYPAL ACCOUNT AND EBAY ALSO

  5. Auction Essistance
    October 8, 2015 at 5:00 pm

    They have held numerous amounts from many of our clients that we assist at Auction Essistance. PayPal limits accounts at the most random times it is bizzare.

  6. Richard Harris
    September 26, 2015 at 2:34 am

    Payolee is a good paypal alternative. I use them for my freelance design business.
    http://www.payolee.com/paypal-alternative

  7. arslonga vitabrevis
    May 16, 2015 at 9:56 pm

    Pay pal doesn't seem like much of a reliable business partner, good to see it doesn't hold a monopoly so much anymore, looks like they are more of a political institution as of late supporting Putin's disinformation by pulling out of an account created by activists to counter media control in Russia and get to the bottom of Boris Nemstov’s investigative reporting and aide in the distribution of a report Nemstov was working on before he was murdered. Pay pal is just another Putin troll to me anymore. Thank God for competition to keep us strong and free.

  8. Dennis
    March 23, 2015 at 3:01 pm

    Thank you for info. paypal had let fraud happen on my account to the tune of over $5000 and denied the claim said i did the charging had the account for three years and only used it for a savings and withdrew moneys twice a year. some one charged things from apple inc. Itunes, starbucks and other things in just two months wiped out account and ran up $1000 more on the paypal account that had fraude on it after the fact. they denied my claim told me to take it up with my credit card company they did not even send me email on any of the withdrawals as they have done in the past. They even tried to send emails and none went through agent said it was definitely fraude I need help.

    • Nicole
      March 22, 2016 at 8:07 pm

      I absolutely HATE HATE Paypal and won't recommend nor promote the use of this site. I will never ever go back NO MATTER what they say even if they said it will get better or will never happen again...THEY LIE!! They did something similar to me awhile back (more than a year ago) in denying what a merchant did to me and supported the merchant over me the consumer (me). It wasn't until me writing and cutting and pasting many emails and personal data back and forth until finally one day the clouds opened up and a glimpse of sun peered in and I got my monies credited back - but it took pulling teeth to get what was mine all along. It was so anerving and I was treated less than a person and for this screw them. I will never go back - not ever!!

  9. Erica
    February 12, 2015 at 8:03 pm

    My Paypal account also was frozen. And it was very complicated process trying to find out what was the matter. So I switched to an alternative. I am happy that there are other payment options to choose from and I hope they will develop further on. In fact, after having a look around you can sometimes find better conditions than offered by Paypal.

  10. Allen J
    January 31, 2015 at 5:02 pm

    I hate paypal. They held onto $10K of my money for 21 days, and they fees are ridiculously high. What a rip.

  11. Anonymous
    March 10, 2011 at 5:42 pm

    Have you tried the gateway provided by CheddarGetter? CheddarGetter's probably best known as a recurring billing management system, but it just released its own payment gateway (CheddarGateway) this winter. It has everything you'd expect in a gateway (PCI compliance, fraud protection, QuickBooks integration, real-time reports, etc) along with a documented integration API if you would like more customization. But even if you don't use the CheddarGateway, CheddarGetter provides recurring billing management services that can link to many of the major online gateways. I definitely recommend them!

  12. Liz Cornwell
    December 22, 2010 at 10:01 am

    You forgot to mention AlertPay (http://www.alertpay.com). I've been using it for quite a while and never encountered any problems.

  13. Liz Cornwell
    December 22, 2010 at 11:01 am

    You forgot to mention AlertPay (http://www.alertpay.com). I've been using it for quite a while and never encountered any problems.

  14. Justin Dupre
    December 16, 2010 at 9:45 am

    I've been looking for paypal alternative for sometimes now.. thanks!

    • Dave Drager
      December 16, 2010 at 4:38 pm

      No problem Justin!

  15. Jaykaran Sagar
    December 14, 2010 at 6:50 pm

    Watch out for Paybox.me, the next biggest online payment service.
    http://www.paybox.me/r/illumin...

  16. blair
    December 14, 2010 at 5:29 pm

    what about Intuit ?? they have some cool stuff going on like their mobile phone payment setup GoPayments
    http://payments.intuit.com/

  17. blair
    December 14, 2010 at 6:29 pm

    what about Intuit ?? they have some cool stuff going on like their mobile phone payment setup GoPayments
    http://payments.intuit.com/

  18. Just Outsourcing
    December 14, 2010 at 2:45 pm

    I hate Paypal! (to the tune of 'I am Spartacus')

    But Payoneer's working alright for me.

    • Dave Drager
      December 16, 2010 at 4:39 pm

      Thanks for the recommendation!

  19. Shade
    December 14, 2010 at 1:48 pm

    Mt Gox does personal and merchant accounts. They handle transaction in BitCoins and in the US, accept credit cards to make USD transfers and payments.

    Mt Gox pays out in USD.

    http://mtgox.com/

    (I have no connection with the Mt Gox enterprise except as a user)

  20. Documaker
    December 14, 2010 at 3:45 pm

    I hate Paypal! (to the tune of 'I am Spartacus')

    But Payoneer's working alright for me.

  21. Shade
    December 14, 2010 at 12:48 pm

    Mt Gox does personal and merchant accounts. They handle transaction in BitCoins and in the US, accept credit cards to make USD transfers and payments.

    Mt Gox pays out in USD.

    http://mtgox.com/

    (I have no connection with the Mt Gox enterprise except as a user)

  22. Saikat Basu
    December 14, 2010 at 7:31 am

    Amazon and Google are the ones who can take on PayPal and its virtual monopoly. As an Indian blogger we know the tremors we felt when PayPal and the national bank authorities clashed. A much needed post Dave.

    • Dave Drager
      December 14, 2010 at 11:25 am

      Thanks for the comment Saikat. It is true, when one company has majority power it is hard to 'pay to play'.

  23. Anonymous
    December 13, 2010 at 10:18 pm

    En Click And Buy?

    • Dave Drager
      December 14, 2010 at 2:50 am

      Thanks for the info on their site!

  24. Labinjan77
    December 13, 2010 at 10:17 pm

    and Alertpay? I think it should be here on list too

    • Dave Drager
      December 14, 2010 at 2:50 am

      Thanks for the idea!

  25. Labinjan77
    December 13, 2010 at 11:17 pm

    and Alertpay? I think it should be here on list too

  26. Alek Davis
    December 13, 2010 at 6:12 pm

    Amazon Payment was news to me. Can't believe it's free. Thanks. Btw, it would be nice if you noted which one of these have APIs or can be integrated in your own systems (similar to PayPal's Instant Payment Notification).

    • Dave Drager
      December 13, 2010 at 8:28 pm

      The more "Merchant" facing ones such as Google Payments, Moneybookers, and 2Checkout have APIs to integrate them with your shopping carts. The more "personal" based ones like Venmo and WebPay do not, as far as I know of.

    • Shade
      December 14, 2010 at 12:45 pm

      Personal users on the Amazon system can only use the money to purchase items from Amazon.

  27. Mike
    December 13, 2010 at 5:50 pm

    I want to add Click&Buy (http://clickandbuy.com/) to the list since it works for both iTunes and Steam* =)

    * in a support controversy it turned out that Steam has a 150EUR monthly limit on Click&Buy

  28. P. David Albee
    December 13, 2010 at 5:39 pm

    Newest, most economical online/mobile payment alternative: Dwolla; http://www.dwolla.org

  29. Bakari
    December 13, 2010 at 5:25 pm

    Cool. I didn’t realize Amazon had a web pay service. Thanks.

  30. ZaiN
    December 13, 2010 at 4:57 pm

    Thanks so much for sharing this. Much needed!
    I only knew about Google checkout and moneybookers before reading this post.

    • Dave Drager
      December 13, 2010 at 5:35 pm

      No problem ZaiN!

  31. Mike
    December 13, 2010 at 6:50 pm

    I want to add Click&Buy (http://clickandbuy.com/) to the list since it works for both iTunes and Steam* =)

    * in a support controversy it turned out that Steam has a 150EUR monthly limit on Click&Buy

  32. P. David Albee
    December 13, 2010 at 4:39 pm

    Newest, most economical online/mobile payment alternative: Dwolla; http://www.dwolla.org

  33. Bakari
    December 13, 2010 at 6:25 pm

    Cool. I didn’t realize Amazon had a web pay service. Thanks.

  34. ZaiN
    December 13, 2010 at 5:57 pm

    Thanks so much for sharing this. Much needed!
    I only knew about Google checkout and moneybookers before reading this post.

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