PayPal has functioned as the go-to online payment method for well over a decade. The service started in the early 2000s as a way to pay for services online while connecting to physical bank accounts. In the years since, it has transformed into the most dominate Internet-based payment service available. However, with these changes, there have been several alterations you may not like. Whether it's problems transferring money on the same day or fees connected with international transfers, there are issues with the payment service that you and millions of others are not fond of. That is why there are PayPal alternative banking options. So, before you continue using PayPal it is worth checking out different payment services to see if one can offer you benefits over what PayPal can offer you.
What Is PayPal?
PayPal was founded in 1998. At the time it was known as Confinity. A year later it took on a new name and created an online website called "X.com." X.com was its own standalone Internet financial service at the time, which was created by Elon Musk. Musk saw the future in Internet banking, so he closed off the other aspects of X.com and eventually worked towards turning it into a financial opportunity designed for users around the world. However, it did not become known as PayPal or go public until 2002. Eventually, it became an owned subsidiary of eBay.
To help with online transactions, digital eCommerce storefronts were looking for alternatives to Internet-based credit card services. PayPal helped fill this need. Since that time, PayPal has continued to grow and evolve. It has purchased international companies around the world in order to gain valuable footprints in these other locations. It started making these purchases back in 2008 when it bought out Fraud Sciences. Other online banking purchases the company made in the decade following included Bill Me Later, Where.com, Zong, IronPearl, Venmo (in 2013), Paydiant, TIO Networks and Hyperwallet.
Additionally, while it became a subsidiary of eBay in its early years, eBay recently announced it would split off and become its own entity. This will occur at the end of 2020 (which is when the current agreement with eBay will end). Chances are, eBay will either take on a new online payment service, start its own, or continue to use PayPal, only with added associated fees due to the company no longer being jointed connected.
Why Are Services Like PayPal Important?
The modern world of business has shifted significantly in recent years. More and more purchases are made on the Internet. Additionally, payments for services rendered are now taking place online instead of with traditional banks. Due to this, it is important to have an Internet banking opportunity that makes it possible to send and receive money that isn't necessarily tied to a specific banking branch. This is where PayPal comes in.
PayPal allows people, especially freelance online workers, to accept these digital payments. In essence, it works in a similar manner to a regular bank, only there are no physical PayPal locations. Instead, everything is done online. With more and more business conducted online and with more workers turning to the Internet to work, the ability to use Internet payments will continue to grow. This is why PayPal not only remains strong, but continues to grow.
With the growth of the company, there are some issues you may not like, including fees and payment problems that might cause issues with your own finances. Due to this, it is necessary to know about the different PayPal alternative options available. While not all the PayPal alternative banking opportunities will work for you, by looking into these variations you may find one works better for you than others.
What Are 8 Great PayPal Alternative Options?
When considering a PayPal Alternative, you need to look not only at the services it provides but also at who owns the company. In many instances, larger companies own the alternatives. Knowing what companies your money is tied up with is important, so always perform your own background checks on these companies.
Venmo has picked up in popularity in recent years. It's also owned by PayPal, so while it is a PayPal alternative, you will still be using a PayPal service. Venmo is used as a personal financial transfer service. This way, you can transfer money between friends. You connect a bank account and draw funds from the account.
Originally, Venmo did not have transfer fees. However, Venmo (through PayPal) recently announced it will be attaching a 1% fee to all transfers. While this has not yet been implemented it is something to keep in mind.
With Google Wallet, you can send money directly from an associated bank account to any email address. This gives you greater access to more people even if they don't have PayPal or a PayPal alternative. It's an excellent service to consider due to this widespread appeal. If you plan on sending money from your credit card there is a 2.9% fee, but this is only for credit transfers.
This is a personal transfer service similar to that of Venmo. It doesn't have the same popularity but with the new fees coming to Venmo it is worth considering. Transfers must be over $10 with the application and it comes with a $0.25 fee. As long as you're transferring more than $25 that will signify a savings over Venmo. The main downside to the application is that transfers may take a few days to reach the desired account.
Similar to Venmo in its peer-to-peer payment method, this makes it easy to transfer money from any location around the world. Additionally, you can get a pre-paid MasterCard and place money from the Payoneer account onto the MasterCard. This is great if you don't have a bank or physical credit card but need a card to make physical purchases. One thing to keep in mind with this service is the transfer fees, as there are different fee levels. The more you transfer the more money you'll pay.
The PayPal alternative Skrill is based out of the United Kingdom. This is a service that allows you to transfer money between accounts, similar to Venmo, but you can also use it to make purchases. There is a $0.10 transfer fee. As there is no percentage attached to the transfer and there is no limit, this is one of the least expensive transfer options.
If you are an online gambler and use websites that are typically based out of the Caribbean, UK, Gibraltar or a handful of other European countries, Skrill is the desired form of Internet payment, thanks to the low transfer fee.
If you run a business, you should consider ProPay as a PayPal alternative. This is because it allows you to accept business payments from anywhere in the world, both on a computer and through a mobile application and credit card reader. Unlike other mobile credit card readers, ProPay works with chip card readers, which helps improve the level of security for the buyer. There are different tier plans with ProPay, so for businesses interested in the service it is important to consider the tiers and what level the business might fall into.
Payza is another application similar to Venmo. With Payza, you can transfer money to friends and peers for free. However, if you plan on making a currency exchange, such as transferring USD to Euros, there will be a fee with this (which does not differ from most currency transfer services). Make sure to look into what the transfer fee is for the currency as the exact fee will differ depending on what currencies are being exchanged. You can link the Payza service directly to your credit card or bank, so it's easy to access funds and make the needed transfer.
2Checkout is a great option if your business works with customers from around the world. The 2Checkout platform is offered in 15 different languages, and you can transfer money in 87 different currencies. There are fees associated with the transfers, and they are different depending on what country you live in. If you are located in the United States, the fees are 2.9 percent plus $.30 per transaction.
There are several alternatives to using PayPal. While PayPal helped created the world of online payments and Internet banking transfers, there are a number of other methods you may want to consider instead. Not all Paypal alternatives will be right for you. It may depend on the kind of banking you do and whether you're interested in a peer-to-peer service or you need to accept payments as a business. With these eight different options, you should find something that fits your needs.
Again, just make sure to do your homework to see what each service does best and remember to consider the possible fees. While Venmo (owned by PayPal) is the most popular peer-to-peer service, it may not be for long due to the upcoming 1% transfer fee that will be attached to it. With other payment options not charging a transfer rate, you'll want to look into not only Paypal alternatives, but also alternatives for the companies PayPal owns. By conducting your own research you'll discover what works best for you and any company you run.