PayPal Alternatives for Startups | Hacker News Reader

PayPal Alternatives for Startups

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132 pointsthereyougo95 comments

Some payment processors on this list are 100 times more evil than Paypal and do all the things you hate about Paypal but worse.

Story time: The biggest offender in my limited experience in dealing with some alternatives is 2checkout. Please please stay away from it. They can make up any excuse and shut you down with a two word excuse (we were told "digital locker" for a saas site which created html5 animations and our account was shutdown without notice (with no way to appeal) also locking out all customers and their payment info.. at that time it was like Paypal so they had all the cc info not us). Lost thousands of dollars per month and had to email users by hand to switch to Paypal.

So do your due diligence and read reviews before signing up and trusting anyone on the list

You know the famous spam "hello office, your password is [redacted] and I recorded you watching pr0n"? Well, I received such messages about my TransferWise password, so I obviously informed them, and what did they do? Simply shut down my TransferWise account. Would not recommend.

At least they haven't kept your 35,000€ when en-route to a recipient. They send me an email explaining that my type of wire is "too much of risk for their appetite" (real quote). All good, so just return me back my money. I had to threaten them multiple times with going after them in UK (their legal HQ) for almost 14 days until they returned my money back. Not to mention that a service provider (very good one) that I owed money will not work with me anymore since their invoice was overdue for 2 weeks.

Absolutely stay away from TransferWise - educate yourself (Google is your friend) how much fraud they perform on daily basis, as internet is full of horror stories from people who attempt to use them because of their low fees. Absolute scumbags.

Conversely, I've used them on many, many occasions over a number of years - not for the sums you're talking about although as much as a few thousand AU$ and never had so much as a problem. I'd still use them.

+1 that is my anecdotal experience also, started living between uk and us, conducted many international transfers over 5 years with no issue, was having a much harder/more expensive time with other services (I think mostly paypal) before that.

I've also used them many times, for smaller amounts, and know several people that work there. While their environment seems somewhat cultish, I find it hard to reconcile your 'scumbag' comment with the people that I know - one of whom used to work in the anti-fraud department.

Are you really claiming that fraud is part of Transferwise's standard mode of operation? I really find this hard to believe.

Again, sorry for the bad experience. Sometimes background checks take longer, to be on the right side of the law.

Please reach out to me at karan@transferwise.com if there is anything.

Their problem with your company seems pretty obvious. If it was for background checks, how come OP apparently doesn't know that?

I have had great experiences with transferwise so far over any other service and will continue to use them for the overall experience (and low fees)

I feel like this is lacking a lot of context. Not that I'm doubting you, I'm just doubting your recounting of things. I doubt transferwise is trigger happy about closing accounts and I've had good support experience with them overall.

I looked it up, it's an email signed "Kata" saying "There was no transaction made under the current account and it was deactivated for your own security. Please create a new account using a different email address just to be safe."

Of course you are going to have good experience with them... until they shut you down. Funny thing is they literally block your incoming emails! I asked them 3 times for what info they keep on me per GDPR and they totally ignored me! They are in violation of GDPR which United Kingdom should be abide by, but they obviously don't care...

File a complaint with the ICO.

This looks like the right url:

https://ico.org.uk/make-a-complaint/your-personal-informatio...

hi croisillon, sad to hear about your experience. I work with transferwise, would love to fix this for you.

This is a good list, but many customers (i.e. more than 50% in my experience, especially if they're non-US) prefer to pay with PayPal rather than bank cards. Some don't even have bank cards. So if you use a service on this list, be sure to choose one that supports PayPal as a secondary payment method, like Shopify or Braintree, otherwise you could lose potential customers.

I also find it funny that Braintree is on this list, since it's entirely owned by PayPal since 2014.

What's the underlying reason for people wanting to use PayPal? Hooking it up to their bank account (yikes) and not having to have a credit card?

Are there analyses available on what type of products/services have this problem, and what customer base primarily wants PayPal?

I refuse to do business with PayPal, due to the many many horror stories of them holding money hostage, issues with charitable donations, utterly opaque dispute resolution, etc. (I've had issues with them myself, as well, trying to make donations.) I'd love to know alternatives, not just to the features of PayPal (for which there are many), but for serving the customer base of PayPal.

>What's the underlying reason for people wanting to use PayPal?

That's a good question, and here's what my customers have said. My company's market is digital products at around $10-100. Not saying everything here is justified, but the fact that a customer thinks these things should be justification for you to cater to them. (Customer-is-always-right principle.)

- Credit cards are hard to obtain in my country, but PayPal is easy enough.

- The last time I had a credit card, I spent it all at once! So all I have is PayPal now.

- I have USD in my PayPal account, but I don't think my credit card works with USD.

- PayPal is safer because it offers some protections against fraud.

- I don't trust to give a company my credit card number, but I trust that logging into PayPal at a paypal.com URL is fine.

- I have extra money in my PayPal account that I can spend, but I shouldn't spend from my checking account.

- PayPal is easy to sign up for. I don't have to walk into a bank or make phone calls.

Some people have money in their PayPal stored-balance component, and it's easier to spend it out than to have them credit it back to a bank account.

I suspect some people use it as an "off the books" account in family/spousal relationships. They'd have a fit if the credit card had a $300 charge, but they don't even know you had $300 in PayPal balance from selling stuff on eBay and can go to town.

I'm thinking about integrating with Amazon Pay because most people have Amazon accounts already.

General perception is that PayPal provides for both better privacy and better protection.

People literally think that when paying with PayPal, merchants don't get to see any personal data, even though in reality PP dumps all payer's details onto a merchant, including physical address, even if there's no need for that.

Better protection is a valid point though. It's dead easy for payers to dispute a payment and merchants are basically forced to settle with the customers, because fighting disputes is very hard. On the plus side, meritless disputes on PayPal are surprisngly rare.

I mean, with some Stripe implementations, for example, you are trusting the merchant not to store the CC # before sending it to Stripe for tokenization, whereas w/ PayPal your CC # is only ever entered on PayPal.com.

I say this as a person who hates PayPal.

I use PayPal whenever I can for subscriptions since it’s really easy to cancel there instead of dealing with figuring out how to cancel directly.

Please don't do that; it's abusive towards the provider of the service you subscribed to. They deserve to be informed that you want to cancel, rather than to discover that you've unilaterally stopped fulfilling your side of a contract.

(Indeed, in many cases they might be within their rights to pursue you for non-payment, depending on the details of the agreement you entered into.)

I understand that in some cases, companies make their cancellation process so arduous and difficult to access that stopping payment seems the only option, but I don't think it's fair for users/consumers to treat it as a default method.

I don't just go to Paypal first necessarily. If it's easy and obvious I'll do it on the site then cancel in Paypal. But sadly most services don't make it easy so it's kinda on them if I go to PayPal first. Would be no different than if I used Privacy.com with a fake name. Good luck coming after me then.

Also fail to see how it's "abusive" since if you implement Paypal you should have your service setup to handle Paypal cancellations.

You talk about a provider like a person.

You can easily listen to webhooks for subscription cancellations, and you can also poll the API for subscription information - ideally both to guarantee consistency (watch+list pattern). Any non-trivial integration would have this. Don't blame end users for your tech #fails.

Even as I point this out I don't seem to understand your attitude, unless it's on behalf some lame shared cpanel hosting providers using some crappy billing software like whmcs - those providers lame everything on the customer.

Indeed. In fact in my previous project, I sent PayPal users to the cancellation page on PayPal itself if they clicked the "cancel subscription" link.

In order to correctly implement PayPal subscriptions, vendors must check the status of each users' subscription before renewing their service each billing period. If the vendor fails to do this, this is their problem, not the users'.

Why not just integrate two payment solutions (Paypal + something for cheaper card payments) instead of having a middleman in front of Paypal? That's how we do it in Europe... And we sometimes have a dozen of different payment options.

Some companies do that, but then you'd have two completely different systems to interact with your subscription system / shipping processor, handle refunds/chargebacks, automated emails, tax forms, etc. You've just gotta evaluate the cost/benefit. My company uses Shopify with several payment processors to get a single payment API.

You just build an abstraction before Paypal/CC processor/whatever else...? From my calculations it is worth it even for small companies if they operate in EU.

An abstraction layer is the primary service Shopify, Braintree, etc provide.

Venmo is Paypal. Alternatives are provided without context as why you'd seek one out beyond mostly similar transaction fees.

From the perspective of a consumer, this might be penny wise, pound foolish.

When I buy a product from a company I am not familiar with, I look for the PayPal button. This is especially true if the product is some type of subscription. There is no way I am buying a subscription to something other than through PayPal.

As a buyer, I know PayPal has my back, and that I can see and easily cancel any subscription.

So, if you go with the alternatives, be aware there are likely millions of consumers like me who you are missing out on from the start.

Interesting. For me, it's the opposite. I think of PayPal as evil, deceptive (think of the currecy conversion opt-out mechanism) and how many content creators got hurt by PayPal freezig their accounts.

I'm relieved when I see a company found another way and doesn't make me use PayPal when paying.

Consumers love PayPal because it’s more friendly to buyer (than to seller). Thus supporting PayPal is beneficial to vendor.

For vendor it makes sense to exercise caution: not leaving large balance on PayPal account, attach only intermediary bank account to PayPal to prevent PayPal tapping into your funds at will and have reserved accept payment method in case PayPal gets awry on you

They push conversion so hard. If you sell something in eur/usd while your origin country uses different currency paypal will allow you to send money only to bank account of that currency and country you are based in. They say it is required by law. Of course when you make the transfer they inform you that that bank account is not in eur/usd and that they have converted it for you. And their conversion rates were like 4% worse than my banks which is about 4% worse than something like transferwise/revolut.

Cutting down ~8% thats after paypal fees is not fun. I switched.

My very small side-business uses PP, and it has been frictionless for 12 years. When I started up, I imagined the customer thinking: "Would I rather give my credit card info to PP or to this guy working in his basement who probably has no grasp of data security?"

With that said, there are people out there who have, for whatever reason, vowed to never use PP. Maybe they had a bad experience. Most people who want a PP alternative seem satisfied to send me a money order. If my business were to grow beyond $15k/y, I would think about adding a secondary payment service.

On my end, PP is my accounting system. I use the PP credit card to pay for all of my supplies. At tax time, I download a huge spreadsheet of every transaction, and mung it into my year-end numbers.

Dealing with chargebacks, frauds, and disputes... my view is that the idea of being able to get a refund, no questions asked, has been established as a consumer expectation by the large physical and online retailers such as Home Depot and Target. Those companies can afford to "eat" a few bad transactions. It's harder for the rest of us. If someone has very low sales volume, or is moving big ticket items, a single chargeback or dispute can be painful. Anybody who's thinking of setting up shop online, should think about how they can maintain a cash cushion to absorb the issues that can arise. Eating a few bad deals has to be just part of your budget.

Most people considering these alternatives may not have dealt with credit card chargebacks—which are a completely opaque process with extremely long processing times, and a fee, even if you win.

That being said, from a consumer perspective chargebacks are easier to obtain than paypal disputes, if the transaction is small. For a lot of small dollar amount chargebacks merchants don’t even bother.

As a consumer I totally love chargebacks.

Very easy to deal with fraudulent vendors and discourage shady business practices.

That said merchants definitely hate that because it’s lose-lose for them even if they win (mandatory $25-$40 fee they pay regardless)

I think it’s actually $15, and Stripe actually pays this if you win.

But my point is that merchants should love PayPal for this, and consumers don’t realize it’s chargebacks that are > PayPal claims when it comes to consumer friendliness.

Though even paypal claims are easily won by consumers if you’re willing to commit light fraud/perjury.

That said - merchants can retaliate back to consumers by banning them or reducing their ratings especially in industries where merchant provides essential services.

Consumer can of course re-retaliate back to merchant via social media hell.

So, on a final note, it's better to try to resolve things in a friendly manner, unless there is a clear fraud on one side.

Blacklisting only works if you’re a big company, and in these cases the game is stacked against the consumer... the only recourse would be class action.

Social media hell is only really effective if you are notable. Otherwise the most damage you really do is simply not being a net promoter.

Resolving in a friendly manner and designing the user experience around easy customer service should be the standard. Anything less and really the merchant is committing fraud.

The reasons why I hate credit cards both as a consumer and a merchant are:

1) legacy tech that improves at a snail’s pace. They literally profit off of fraud, because fraud liability generally falls on merchants but they make money off of increased transactions (due to less friction).

2) they stopped innovating and a clear sign of that is the heavy push towards loyalty points in order to retain users. Not to mention anticompetitive practices barring merchants on passing on credit card fees (for which they have a 6+ billion dollar class action over).

3) opaque processes over disputes and chargebacks and long 45+ day feedback times

4) they helped cause financial crisis by overextending credit

A service that allows one to create single use credit card numbers would have helped. The only one I know of is US only.

Payoneer the strongest paypal alternative is currently behaving like PayPal. It closes accounts on a whim without recourse and support is Google-like.

Revolut also offers this: https://blog.revolut.com/introducing-disposable-virtual-card...

Revolut always sounds so interesting, but I’ve been on their waiting list for a year and a half, 70k people in front of me and 35k people behind me, I’ve not seen either figure change in months. I don’t know if I fell through a crack or if they stopped accepting people to the wait list or if something else is going on. It does sound like there are people actually using the service .

Huh. That's strange – in my home country (Norway), they've been struggling with lower growth than expected. [1]

Personally, I stopped using their service due to not enough of a value-add compared to my main bank (Sbanken) and Revolut's questionable HR practices. [2]

Which country are you in?

[1] https://shifter.no/bankfenomenet-revolut-sliter-i-kampen-mot...

[2] https://www.wired.co.uk/article/revolut-trade-unions-labour-...

They started to give me free invites (you have to pay something for delivery of the card) so now many people around me have it. It spreads like fire.

I love the service unfortunately i've read some very bad articles about their ethics/company culture and that their investlrs are russian gansters. But who knows.

From their site:

"Revolut is currently only available to residents of the European Economic Area. We're expanding globally very soon!"

Privacy.com lets you do it.

It's the one I was referring to. It's US only.

A quote from their signup page:

"I am a US resident and I agree to the terms and both the card and ACH authorizations."

Paypal also uses redirect to their own domain ensuring you don't give your CC to just anyone. This is the biggest selling point to me.

Services asking for a credit card number directly on the site may or may not be using Sprite, or a similar legitimate service, and may or may not contain malicious code that captures your input regardless. I really have no way of knowing.

I have to use Sprite next time when i make my new sass.

> As a buyer, I know PayPal has my back, and that I can see and easily cancel any subscription.

I avoid negative option billing like the plague. There are too many companies who force you to do something ridiculous to cancel it, like calling a "customer retention specialist" between the hours of 10 and 4 and being put on hold for 20 minutes. If I have to subscribe, I want to know that I can turn the money spigot off easily and online.

I was recently at an annual meeting of local fisherman where they had to pay dues but the platform they use for their website and due payments had stopped using paypal insisting on accepting payment thru cards only. guess what, 80% of the people said paypal worked just fine and its not our problem, its either cash or paypal, we aren't handing over our credit card info to another online website. I was shocked but that seems to be the norm in non-tech circlss

I like the nod to Coinbase. For me there needs to be more emphasis on paying with cryptocurrency as a legitimate form of payment. All these gatekeepers listed here can freeze your money at any time and you have to wade through paperwork and boring calls to support-desks to get your money back. With cryptocurrency the trust is already built with smart-contracts and there is no middleman to decide whether payments are released or not.

> I like the nod to Coinbase.

> the trust is already built with smart-contracts and there is no middleman to decide

These two statements seem to be contradictory. Coinbase is certainly a middleman.

I like (and use) a lot of Coinbase's offerings, but I think it's also a good time to start promoting a more truly distributed view of the merchant service side for payments.

IMO, Coinbase is in the same bucket as Paypal because they will decide to block transfers or freeze accounts if a violation of the User Agreement is presumed: https://support.coinbase.com/customer/en/portal/articles/190...

Coinbase also has internal wallet blacklists so transfering to any of those could lead to account issues (ex. Wallets associated with marijuana products, online pharmacies, or in OFAC countries).

They’re absolutely contradictory. Coinbase will shut down accounts based on certain activity.

Is that actually true? I don't follow cryptocurrency that closely but I seem to remember headlines of a site shutting down and something like a million BTC disappearing forever and people never got it back.

The key is not relying on any exchange/entity to hold your cryptofunds.

There are software solutions (such as electrum master public keys) that can be used to dynamically generate “pay to” bitcoin addresses against your own bitcoin wallet without exposing you to any hacking risks.

Well if you really want to remove the risk of a gatekeeper to freeze your money you shouldn't rely on Coinbase, which is a gatekeeper like all the others.

Instead you should do transaction verification yourself.

My understanding is that by using public blockchains for payments, people can in some cases figure out who you are and what you've bought by tracing the transactions. Is this correct?

Paypal alternatives for mostly _american_ startups.

Adyen not even getting mentioned, very surprising as it handles most payments for Netflix and Spotify.

Adyen won't talk to startups. They are not interested at all.

The current state of the market for European players in the payment space, is that it's not startup friendly.

Take companies HQ in Europe like Worldpay (London), Adyen (Netherlands), WireCard (Germany), Fidor Bank (Germany) and Mambu (Germany).

Not one company wanted to talk to my startup.

No problems with US based players. They are more than happy to work with startups and will actively work with you to become a unicorn.

After all, the higher transactions the startup does, the more money they earn.

Mollie is Dutch and definitely talks to startups. They're similar to Stripe in many respects.

https://www.mollie.com/

Hi,

I work at Mambu and our clients are predominantly Startups - https://www.mambu.com/clients Feel free to drop me an email at alexey.lapusta@mambu.com

Although we do not provide payment services to businesses, rather a SaaS platform for Financial Institutions (e.g. WireCard may use Mambu as their Core Banking when providing banking services to their customers).

bolt.com is a great option for e-commerce companies who want checkout, payment processing and risk and fraud all in one solution

Going through this post and some of the other "X alternatives" posts on the site, I can't help but feel like these articles are just being content farmed by someone with no prior experience using these recommendations.

As a cautionary tale. It's a good idea to say AWAY from Veem as well.

I received my salary via veem. First few transfers were good. I got the rate they mentioned on there homepage.

But later, they started giving me absurd rates and said there homepage currency converter tool is broken and what they are transferring to my bank account is final rate.

There was absolutely no way of finding out the rate you were going to get paid.

Absolute bait and switch

I read over and over how companies skip PayPal or remove PayPal and are startled by the lost business. (No direct experience though)

For example, https://fman.io/blog/paypal-vs-stripe-for-small-businesses-i...

I'm surprised Zelle isn't mentioned here. It's owned by the major banks and allows for business account transfers without fees. I use it to pay some US contractors. Most free services (e.g. Venmo) don't support business transfers and have low monthly transfer ceilings.

Yeah, this just looks like a list where someone Googled all of the alternatives and put them into 1 article without ever using them or "really" looking for alternatives.

Zelle is quite good. IMO it's the ideal way to accept payments for 1 on 1 services. Over the last 18 months I've done dozens of transactions with them to accept money as a freelancer. If you're in the US, it's a no brainer if your bank supports it. There's no fees and it's quite fast to get the funds, plus there's no other service to sign up for since it's a part of your bank's dashboard.

But for selling digital goods to the masses you're leaving a lot on the table if you don't support PayPal. I don't think there is an alternative to it because customers will use whatever is comfortable for them and if they prefer PayPal and you don't support it, you may lose that sale.

I don't think it supports business transfers.

https://www.zellepay.com/user-service-agreement

"The Service is intended for personal, not business or commercial use. You agree that you will not use the Service to send or receive payments in connection with your business or commercial enterprise. We reserve the right to decline your registration if we believe that you are enrolling to use the Service with your business account or to receive business or commercial payments. We further reserve the right to suspend or terminate your use of the Service if we believe that you are using the Service for business or commercial purposes, or for any of the uses identified directly below."

Maybe it depends what kind of account you have? Zelle is offered directly through my business bank account interface and it's what the bank recommends using as an alternative to ACH and wires.

Wells Fargo directs users from the Bill Pay service into Zelle - and is aware that booth sides are business accounts and that payment is for commercial services.

Anyone running small online business in a EU? How do you handle VAT? I'm currently researching it, will probably end up using Paddle.com (they charge 5% plus 0.5$) but would like to have some alternatives that similarly handle VAT across EU with better UX ideally.

I built it myself with Braintree for processing (PayPal, Cards)

There is a compelling case for a marketplace solution that allows startups and businesses to exchange currencies with each other and have their payments processed via a central counterparty that is regulated. Perhaps, VertoFX (https://www.vertofx.com) can help some of you on this thread with your FX and international payments needs. The good news is that VertoFX is built for businesses; therefore, it is well equipped to handle large transactional volumes.

I can't believe it's 2019 and startups are still accepting terms of service to receive value.

Crypto-currency is here and removes all of these trusted 3rd parties that can and will shut you down for any number of reasons, not to mention their outrageous fees, chargebacks, and incompatible APIs, which make it painful to migrate to another provider.

If you can, ditch this system and build for the future.

https://github.com/btcpayserver/btcpayserver

PayPal gets a lot of negative publicity from a handful of high profile temporary freezes.

>handful of high profile temporary freezes

This is willful blindness. If these issues were indeed temporary, no one would complain.

Those high profile cases were temporary because of the PR storm they raised - just like it does with Google. People wouldn't mind much if PayPal didn't also steal their money.

> Those high profile cases were temporary because of the PR storm they raised - just like it does with Google.

Maybe Twitter, or the owners of Twitter bot-herds, should start charging these big companies for doing tech support. Public shaming seems to be the only way to get human attention.

If you honestly believe paypal is in the business of stealing a couple hundred grand from a few overnight success stories then you may be the one suffering from willful blindness.

It's probably got less to do with PayPal purposely stealing from their customers, and more to do with PayPal's software freezing accounts of innocent people, and PayPal not being willing to allocate the resources necessary to prevent this theft.

My thing is... How is it that it is now paypals property? How is that legal? I sure hope someone who lost 100 grand sues them for their money back plus lost income due to account freeze. We need to see more legal outcry over what basically ammounts to theft. I may even figure you could sue for defamation depending on the why of your account being frozen. If they claim anything negative. Plus it gives your entire enterprise a bad name without reason.

PayPal owes me $200.

I had received ~$200 from friends to start a video game project. They froze my account. I did everything they said to do to get it unfrozen: sent photocopies of my ID, etc. Still frozen. No human interaction.

Two years later I get a letter from the state comptroller saying that PayPal had been trying to reach me to give me my money back, and if I wanted it to call a certain 800 number (of PayPal's, not the state), otherwise it would revert to the state. I called the number and they asked me, "Do you want to be mailed a check, or can we just credit your PayPal account?" Since the account was still frozen (as far as I know, I haven't tried to log in to it in years) I said send me the check.

That was the last I ever heard about it.

No check was forthcoming.

Wonder what would happen if you send a letter back to the current state comptroller. That sounds pretty awful, but wow, it eventually just magically goes to the state somehow. That sounds just as odd as it disappearing, especially since it's been "frozen" for years, one could say gaining interest for money that's not their own.

In Texas, at least, "unclaimed property" goes to the state comptroller, who holds it on behalf of the person for some years in case they claim it. My dealings with them were fairly straightforward (but weirdly insecure?) to reclaim a security deposit I had forgotten about.

It's funny how items 6 (2checkout) and 7 (Stripe) are almost identical in style. I believe Stripe was the original and 2checkout completely lifted their design...

Paddle.com

Liberty reserve

No.[1]

[1] https://en.wikipedia.org/wiki/Liberty_Reserve#History

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