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Paypal is one of the biggest and most widely adopted forms of online payment on the web today. With the weight of Ebay behind it, PayPal has truly went from strength to strength, and is a well recognised web brand. That said, it hasn’t avoided negative press, with reports of accounts being frozen, and Paypal slow to respond to support queries, many people have been forced to review and compare other options. Whilst many of these don’t yet have the user base of PayPal, they may serve to help you out when searching for alternatives.
Google Checkout is Google’s attempt at a replacement for PayPal, and is still very much an inferior product, with only a small subset of the features offered by others. As for the actual transaction costs, they have completely mimicked the tiered cost structure of PayPal, as low as 1.4% + £0.20 per transaction, but as high as 3.4% + £0.20 depending on your monthly sales volume. further details can be found on pricing here.
In a similar vein to PayPal, Checkout is a middle man solution – storing credit and debit cards in its system, and then using those to transfer funds to a fro a bank account. With the ability to embed “buy now” buttons if shopping cart functionality isn’t needed.
The adoption of Google checkout hasn’t been all that they have hoped, but that could all change pretty soon. If TechCrunch’s prediction on Google Games is correct, we could see a much more mainstream take up of Google Checkout. At time of writing they were running house ads that looked like this isn’t far of the mark. Technical support for Google Checkout would need to improve somewhat if they are going to get the traction they need however; an outage of the service back in April saw many developers and e-commerce merchants disgruntled, with no apparent response from the Google team. Checkout is available to customers in both the U.S and Europe.
Money Bookers is a UK based company, and is Authorised and regulated by the Financial Services Authority of the United Kingdom (FSA). They offer a number of benefits including sending money securely worldwide to anyone with an email address – even if the recipient does not have a Moneybookers account yet, and accept business from lots of different currencies. January 2010 they were reporting a user base of 10.8 million accounts – although this doesn’t indicate how many active.
Following the online wallet model, they hold all payments in limbo prior to transferring through to the final recipient, giving you some amount of protection. Escrow services are available for auction services. All previous transactions can be found in the history section of your account which can be accessed at any time and the data can be easily exported to an excel file if you want to maintain a digital backup. In the setup of an account there are a lot of verification procedures, which can take time, and they are certainly not as easy to use for someone in the US compared to someone in Europe. That level of protection will however help to give users piece of mind.
Their fees are on a flat per transaction basis, where uploading fees to a moneybookers account is free, but withdrawing funds from your account costs you. Further details for different countries can be found here. As with Google Checkout and Paypal, they do offer a payment API – however there didn’t seem to be any quick “copy and paste to buy now” type scenario, which will put off some of the less technical users who are looking for a quick e-commerce solution. That said, requesting money is a simple matter of logging in and sending a money bookers email.
Availability: Australia, USA, New Zealand
Paymate provides secure, reliable and innovative Internet-based payment services to buyers in 57 countries around the world and sellers in Australia, New Zealand and the USA. You can use Paymate to receive online payments via credit card, and like PayPal – you don’t need to have a merchant facility with a bank.
Although this is a service which exists inside particular locales, it is still a worth competitor to PayPal, and has performed particularly well on Ebay Australia – where Ebay were forced to accept it as an alternative payment provider for fears of anti-trust litigation.
Details on the fees charged can be found here – with the fee for buyers in the UK at the time of writing being 3% + 0.25p per transaction regardless of the size of transaction. However there does seem to be charges for chargebacks and a credit check charge for new customers opening an account.
Obopay is one of the first mobile payment systems to make it to the web, enabling customers to transfer money to one another right from the mobile phone. Technically this is achieved using a combination of the technologies offered on mobile devices – traditional SMS, WAP, HTML / Web apps and bespoke iPhone applications – allowing them to cover all bases regardless of the handset capabilities.
With more and more of the web moving mobile, its no surprise to see startups taking advantage of this, and wedging a foothold in this space. For example in May that announce that they were going to allow banks a branded payment solution to take advantage of the growing mobile trend – saving them the hassle of the implementation, and allowing OboPay to get on the pig’s back so to speak.
Amazon have a number of interesting products under their ‘Payments’ banner. They have a system for sending money which is free to use for sending money between Amazon users, and they have a number of more ‘E-commerce’ related products. If you are looking to just send and receive money in the U.S. they have a pretty attractive offering. If however, you are needing a transaction option, you are going to have to pay for the privilege.
All of Amazon Payments uses their databases stored internally to aid with the checkout process, essentially giving sellers less hassle with the checkout process, also giving access to Amazon’s patented ‘One Click order’ services. In a similar vein to PayPal, they also offer cut and paste HTML code for their Simple Pay product, which can get you up and running quite quickly if you only have a handful of digital products to sell. Processing is performed on Amazon servers, prior to the customer being returned to finish the checkout process, which isn’t that big a deal considering its an out of the box payment solution.
As for costings, this is worked out on a per transaction basis, with fees starting at 2.9% + $0.30 per transaction for volumes under $3000. See more details on the pricing for business accounts here.
At time of writing, Amazon Payments UK hadn’t been rolled out, and the service exists for the U.S. only.
Notable Mentions – Digital Software Carts
These other links and systems may be suitable for a variety of scenarios, including digital shopping carts, card processing and digital wallet solutions. Some of them mirror the free software features found in PayPal, some of them are just bare bones solutions, but hopefully they will be useful for you to review.
Provides shopping cart software which integrates with PayPal and other card processing gateways. If you are selling digital goods, thoroughly recommended folks.
In a similar vein to E-junkie, Kagi offers a digital goods delivery, and integrated shopping cart experience solution for those looking to get up and running without the hassle of setting up a full e-commerce store.
Digital River’s Element 5 product is also used across the web for digital software delivery, and its shopping cart is well respected.
Bitcoin is a peer-to-peer network based digital currency. Peer-to-peer (P2P) means that there is no central authority to issue new money or keep track of transactions. Instead, these tasks are managed collectively by the nodes of the network. Advantages:
- Transfer money easily through the Internet, without having to trust middlemen.
- Third parties can’t prevent or control your transactions.
- Bitcoin transactions are practically free, whereas credit cards and online payment systems typically cost 1-5% per transaction plus various other merchant fees up to hundreds of dollars.
- Be safe from the instability caused by fractional reserve banking and bad policies of central banks. The limited inflation of the Bitcoin system’s money supply is distributed evenly (by CPU power) throughout the network, not monopolized by the banks.
Other PayPal Alternatives
Some of these additional alternatives may also be applicable to your particular situation.
- Neteller– Prepaid card solution, giving you a mastercard that you can use instead of a credit card.
- DirecPay – PayPal Alternative in India
- Liberty Reserve
- TrialPay – Ad funded Payment Platform used for social games on sites such as Facebook, and for software companies who can offer trials.