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  5. 10 Best PayPal Alternatives: Lower Rates, More Features [2023]

10 Best PayPal Alternatives: Lower Rates, More Features [2023]

Dawn Prevete Dawn PreveteFinance Specialist January 13, 2024
January 13, 2024
PayPal seems to be the default option for many businesses, but it’s not without its flaws. High transaction rates, slow payout times, hidden fees, and a lack of dedicated, hands-on customer support can all become frustrating over time.

If you’re considering PayPal or getting tired of its shortcomings, you may be better off opting for an alternative payment processor. You’ll likely get lower rates, free POS hardware, better e-commerce tools, and improved customer service. I say “likely” because not all payment processors provide the same quality of service – so if you’re not careful, you could end up paying more and getting less than you would with PayPal.

After researching the most popular PayPal alternatives, I found ten payment solutions with the right tools to help you optimize in-person and online payment processing. Of these, Leaders Merchant Services (LMS) was the best option for most merchants. Its low-cost, negotiable pricing, free top-of-the line POS and mPOS solutions, and secure payment gateway make it a good choice for both new and established businesses.

Short on Time? These Are the Best Alternatives to PayPal in 2024

  1. Expert’s Choice
    LMS_Monogram Leaders Merchant Services
    Leaders Merchant Services is a popular choice with our readers
    Top PayPal alternative with low rates, free POS hardware, and robust e-commerce tools.
  2. logopayarc PAYARC Affordable services, no hidden fees, and impressive in-person and online payment features.
  3. promerchant-logo ProMerchant Budget-friendly PayPal alternative for high-risk retailers and restaurants.

What We Look For in the Best Alternatives to PayPal

When researching the best PayPal alternatives, I focused on areas where PayPal falls short. Then I narrowed my list of processors to those that offered significant benefits when compared to PayPal.
  • Transparent pricing. PayPal is notorious for its hidden fees and confusing pricing. My top choices offer low or affordable monthly plan fees and free hardware/software. Many don’t markup the interchange rate or offer zero-cost processing options – and they won’t cancel your account without warning like PayPal does.
  • Lower transaction fees. The processors on this list offer lower, easy-to-understand transaction fees for both US and international payments. Unlike PayPal, most don’t charge different fees for different payment methods so your costs are more predictable. Several charge the same small fee whether it’s an in-person, online, or keyed in sale.
  • Faster payouts. While PayPal can take up to three days to deliver money to your linked bank account, these processors will deposit funds in 48 hours or less. Most also offer a same-day funding option at no charge or for a small fee.
  • Excellent customer support. Reliable and timely 24/7 technical support is standard with these popular PayPal competitors. You’ll never have to worry as you do with PayPal about accessing help for an issue that arises outside normal business hours.
  • Advanced security features. Each of these PayPal alternatives offers impressive security features, including fraud and chargeback protection. While PayPal may charge a fee for some security features, these processors don’t.

Leaders Merchant Services (LMS) offers same-day onboarding, free POS/mPOS terminals, and monthly plans with no cancellation fees. It promises to meet or beat your current processing rates, so if you’re using PayPal and want to cut your costs, you could get a much better deal with LMS. Since it boasts a high approval rate and encourages merchants to negotiate, even new businesses can save.

LMS gives you powerful tools to manage your online business. Integration with CartManager’s shopping cart allows you to either add a “buy now” button to your store/product pages or create an entire storefront. You’ll also get features like automatic tax/shipping calculation, multiple language support, insights into customer behavior, and the ability to customize your checkout page so it aligns with your brand.

Unlike PayPal, LMS provides 24/7 technical support and has an entire team dedicated to helping you dispute chargebacks. It processes all major credit/debit cards, checks, PayPal, and Venmo, as well as Google, Apple, and Samsung Pay, and its monthly fees, starting at $9.00, are among the lowest in the industry.

Features and Benefits

  • Excellent POS hardware. LMS offers free Clover terminals, which come with industry-specific features like sales, tracking, online menu pages, and tip acceptance. They’re yours to keep for as long as you use LMS’s service.
  • Full-featured, secure payment gateway. You can integrate Authorize.net’s payment gateway to accept online and in-person payments and use its virtual terminal to take payments over the phone. Useful built-in features include automatic QuickBooks sync and inventory management.
  • Easy access to funding. Whether you’re just starting out or need a loan to expand your business, LMS provides quick access to cash advances and business loans that you can repay through a small commission on future sales.
  • Customer loyalty programs. Offering digital gift cards and loyalty rewards can help you build a base of loyal, return customers – and increase your sales.
To learn more, read our expert LMS review.

POS hardware
  • FreeClover POS Terminal, Clover Mini, or Clover Flex
  • Free Swipe Simple portable terminal or mobile card reader (depending on your plan)
  • PCI compliant, end-to-end encryption, tokenization
  • Advanced fraud detection and prevention at no charge
Average payout time 48 hours
Transaction fees on cheapest plan ~2% + 0¢
Monthly fee on cheapest plan $9.00

PAYARC earned a spot at the top of my list for its range of customizable plan types, impressive features, no hidden fees, and client-centered approach. It offers affordably priced subscription-style plans with a 0% markup on the interchange rate, a flat rate plan with lower fees than PayPal, and a cash discount option that allows you to save on processing costs.

PAYARC also provides easy integration with popular software including online store builders like WooCommerce and Magento, business management and customer relationship (CRM) solutions, and industry-specific tools for restaurants, retail, non-profits, healthcare, and more. It’s also one of the few processors that offer free real-time, two-way sync with QuickBooks – most charge extra for this feature.

In addition to its suite of advanced security tools, PAYARC’s dedicated chargeback team will help you prevent  and reduce chargeback levels and create a custom mitigation plan for you. Another plus is 24/7 technical support, something you won’t get with PayPal.

Features and Benefits

  • Global sales support. PAYARC’S partnerships with several secure international payment gateways (Planet Payment, Spreedly, RS2, TSYS) make it easy to connect with a global clientele. While PayPal limits you to just 25, you can accept payments in more than 150 currencies.
  • All-in-one dashboard. Built-in tools let you create and customize invoices, set up recurring billing, view enhanced data reports, and see real-time sales and payment tracking. You can also adjust billing amounts to reflect promotions, automate tax collection, and issue invoice reminders.
  • Reduced rates for nonprofits. Special discounted rates make PAYARC a good option for non-profits and educational institutions. It even offers at cost processing for qualified 501(c)(3) providers.
  • Useful mobile app. With PAYARC’s mobile app, you can accept secure encrypted payments, issue refunds and receipts, add tips, and access your dashboard on the go.
See our expert PAYARC review for more features.

POS hardware
  • Free 3 Pax countertop terminals and portable PAX A920 (depending on your plan)
  • 2 Dejavoo countertop terminals, Dejavoo Z1 for purchase or lease
  • Level 1 PCI-compliant (HIPAA-compliant with Rectangle Health integration)
  • Tokenization, end-to-end encryption
  • Fraud monitoring and prevention
Average payout time 24-48 hours with an option for same-day payout
Transaction fees on cheapest plan 2.49% + 30¢ (in-person)
Monthly fee on cheapest plan N/A
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Quick approval, next-day payouts, and a choice of two affordable payment models (interchange-plus and zero cost processing) make ProMerchant a good PayPal alternative for any small business. It provides payment solutions for restaurants, retailers, e-commerce, and phone/mail order businesses that include free POS hardware and virtual terminal software.

For online businesses, ProMerchant provides the trusted Authorize.net payment gateway. This gives you two checkout options: full shopping cart integration or a “one-click” checkout that adds a “Buy Now” button to your product pages. Whichever you choose, you’ll get tools for inventory management, invoicing, and recurring billing.

If you’re dissatisfied with PayPal’s slow payouts, want protection for digital product sales, or need excellent customer support, I’d recommend ProMerchant. Be sure to take advantage of ProMerchant’s offer to provide a detailed analysis of your current processing fees so you can see how much you can save compared to PayPal.

Features and Benefits

  • Support for high-risk businesses. PayPal isn’t an option if your business falls under a “high risk” category. Not only does ProMerchant support high-risk merchants, but it also provides additional fraud protection to help you reduce your chargeback rate.
  • Customer information management. ProMerchant’s software can automatically store your customers’ data so you can save billing and payment information for future sales.
  • Personalized support. As soon as you’re approved for a merchant account, ProMerchant will assign you a dedicated support team to help you with onboarding and training, as well as resolve any technical or processing issues.
  • Smartphone app. With the free Payanywhere app and free Bluetooth card reader, you can easily process payments tableside, at events, or in the field. You never have to worry about your internet connection – offline transactions are saved for upload once you’re back online
For more ProMerchant benefits, read our expert review.

POS hardware
  • Free Ingenico Desk 3500 or Pax A920 terminal
  • Free Bluetooth credit card reader and Payanywhere app
  • Over 50 POS devices, including 3 Clover terminals, available for purchase
  • PCI-compliant
  • End-to-end encryption, tokenization, payer verification
  • Advanced fraud detection and prevention
Average payout time 24-48 hours (24 hours for transactions processed by 8:30 PM)
Transaction fees on cheapest plan 3% + 10¢ (credit)
Monthly fee on cheapest plan $7.95

While PayPal may offer a quick onboarding experience, it’s just as easy to sign up and start processing payments with Square. Both also offer predictable flat fee per-transaction pricing – but that’s where the similarities end. Starting at 2.5% + 10¢, Square has lower transaction fees. It also offers faster payouts, industry-specific software, and a free mobile card reader.

Square’s POS systems allow you to sell anywhere and accept any payment method your customer prefers. You can accept credit and debit cards, digital wallets, NFC (phone), ACH, bank transfers, cash, and even PayPal. You can also offer customers extended payment options with AfterPay.

While Square’s flat rate pricing is transparent and fair, it’s most suitable for startups and small businesses that process in-person transactions. If you process a high volume of transactions per month, you may do better with an interchange-plus or subscription-style payment model.

Features and Benefits

  • Online store builder. If you’re just starting out, you can use Square’s all-in-one toolkit to build your e-commerce website as well as process payments.
  • Business management tools. Unlike PayPal, Square offers free software for your business niche, CRM software, marketing automation tools, and more. These can help you improve your business’s efficiency, build customer loyalty, and increase sales.
  • Process multi-channel payments. In addition to accepting online, in-person, and phone payments, Square allows you to process payments for sales made on your social media platforms.
  • Chargeback protection. Square will cover up to $250 in qualifying chargebacks per month and, unlike PayPal, it doesn’t charge a fee when a bank disputes a payment. It also has a team of agents dedicated to helping you resolve disputes.
Learn more in our in-depth expert Square review.

POS hardware
  • Free mobile card reader
  • 4 Square terminals available for purchase
  • PCI compliant
  • Fraud and chargeback protection
  • End-to-end encryption, tokenization, two-factor authentication
  • Handles PCI compliance for you at no charge
Average payout time 24-48 hours as standard, optional same-day payout, instant payout with a Square checking account
Transaction fees on cheapest plan 2.5% + 10¢
Monthly fee on cheapest plan $89.00

5. Flagship Merchant Services: Quick Approval, Easy Setup, and Faster Payouts

You can set up a Flagship Merchant Services account in just a few hours, which makes it a good option if you want to switch from PayPal as soon as possible. Your business will benefit from faster payouts too – 48 hours as standard with an option for same-day funding, whether a customer pays in-person or online.

While Flagship’s e-commerce features are easy to use, they offer ample functionality, including invoicing, inventory management, sales tracking, and more. Unlike PayPal, you can also accept credit card payments on your website using Authorize.net’s secure payment gateway. If you prefer, you can also use Flagship’s API to integrate a shopping cart into your website.

If you sign a long-term contract with Flagship, you’ll get a “free” Clover Mini credit card terminal for taking in-person payments. It’s yours to keep for the length of your contract. That said, I found Flagship sales reps are willing to negotiate, and may offer free equipment even with month-to-month commitments.

Features and Benefits

  • Wireless mobile payments. Flagship’s wireless swiper allows you to take payments and issue digital receipts on the go. You also get an app for iOS and Android devices that keeps track of cash and card transactions, refunds, and more.
  • iAccess business management portal. This reporting tool gives insight into your sales, online reviews, and industry statistics, so you can see how well you stack up against the competition.
  • Gift cards/loyalty program. For an additional fee, you can opt for a gift cards/loyalty program to promote your brand, expand your customer base, and increase your sales.
  • Dedicated account manager. If you’re new to payment processing, Flagship will assign you a personal account manager who can help you set up your account, walk you through available services, and answer any questions you might have.
Read our full review for more on Flagship’s payment plans.

Free POS hardware and software Free Clover Mini terminal or wireless swiper (depending on your plan)
Fast payouts 2-3 days, same-day payout for a fee
  • PCI, GDPR, & CCPA compliant
  • Tokenization, end-to-end encryption
  • Regular merchant account security scans
Transaction fees on cheapest plan 3.58% + 0.19¢ (in-person)
Monthly fee on cheapest plan $7.95

6. Stax: Best PayPal Alternative for High-Volume Businesses

Available throughout the US, Stax is a good subscription-style payment processor for merchants who process a high volume of sales. While it charges a higher-than-usual flat monthly fee, there’s a 0% markup on the interchange rate. If your business handles at least $8,000/month in credit card transactions, you could save as much as 40% over PayPal’s flat-rate pricing.

Compared to PayPal, Stax provides more advanced online checkout options. You can build a custom shopping cart without any coding knowledge, and the process is more intuitive than with PayPal. Stax also integrates with e-commerce platforms like Shopify and WooCommerce. For an additional fee, you can add a prebuilt shopping cart to your website to start selling right away.

All three of Stax’s pricing tiers include features like dashboard and analytics software and ACH payment processing. Higher-tiered plans give you access to an invoicing tool and even more integrations. Each plan covers up to $500,000 in annual processing. If you earn more than that, you’ll need to contact Stax directly for a custom quote.

Features and Benefits

  • Free POS terminal. Unlike PayPal, Stax offers a free Swipe Simple, Dejavoo, or PAX payment terminal to handle in-person transactions (swiped, keyed in, or contactless). You can also use your own device as a terminal by installing Stax’s mobile app on your phone or tablet.
  • Same-day funding. While Stax generally pays out in a few days as standard, you can get same-day funding for an additional cost.
  • Large set of integrations. Stax integrates with numerous business management apps to help you streamline your operations. For instance, you can add apps like QuickBooks to simplify your accounting administration or Mailchimp to help you reach more customers via email campaigns.
  • Live support channels. In addition to a comprehensive knowledge base, Stax has responsive sales and technical support available via live chat, email, and phone.
Want to learn more? Read our expert Stax review.

POS hardware
  • FreeSwipe Simple, Dejavoo, or PAX terminal
  • 8 terminals, 4 Clover devices, and 1 mobile reader available to purchase
  • PCI and HIPAA compliant
  • End-to-end encryption, tokenization, payer verification
  • Advanced fraud detection and prevention
Average payout time 24-72 hours, same-day payout add-on
Transaction fees on cheapest plan 0% + 10¢ (in-person)
Monthly fee on cheapest plan $99.00

Other Notable PayPal Alternatives

7. Helcim

Helcim packages free web hosting and an online store builder together with its payment processing services, an all-in-one solution you won’t get with PayPal. Its pricing per-transaction rates are low and small businesses can stand to save up to 25% with Helcim. Rates start at 0.30% + 8¢ (in-person) and 0.50% +25¢ (online) for merchants processing up to $25,000/month and become progressively lower the more you process.

While it’s well-suited to small e-commerce merchants, you could save more with an interchange-plus plan from Leaders Merchant Services or subscription-style plan from PAYARC as your sales volume grows. If you’re considering Helcim as an alternative to PayPal, take advantage of its online calculator to get an estimate of how much you could save.

8. Chase Payment Solutions

Chase Payment Solutions provides affordable pricing and solid features to meet the different processing needs of businesses both large and small. Like PayPal, Chase offers a range of financing options and business credit/debit cards, but its next-day funding for most card transactions has PayPal beat. And if you open a Chase bank account, you can qualify for same-day funding at no additional charge.

Proprietary POS, mPOS terminals, and mobile card readers cater to businesses that sell in-person and on the go. E-commerce merchants can use Chase’s secure online gateway and virtual terminal for online transactions. You’ll also get a customizable checkout, something you’d have to pay extra for with PayPal.

9. POS Pros

POS Pros stands out for its commitment to providing businesses with POS and e-commerce solutions tailored to their industry and unique requirements. Unlike PayPal, it also offers more than one payment model. You can choose between an interchange-plus, tiered pricing, or cash discount plan that can lessen the impact of processing fees on your bottom line.

POS Pros promises to help you save on your current processing fees or it will pay you $500. This guarantee, coupled with affordable month-to-month plans, no hidden fees, next-day deposits, and robust fraud and chargeback protection, makes POS Pros a compelling alternative for small or new businesses considering a switch from PayPal.

10. CreditCardProcessing.com

CreditCardProcessing.com offers three payment models − interchange-plus, subscription-style flat rate, and cash discount, so you’re likely to find a processing solution that meets your needs. As you weigh your options, I’d recommend calculating the cost of extra fees such as a monthly charge for the payment gateway and the cost of POS terminals (hardware is only free with a one-year contract or premium plan).

If your focus is security, CreditCardProcessing.com offers far more support than PayPal. You’ll get $100,000 of data breach insurance at no charge and access to Vindicia Retain, a payment recovery solution that promises to recover up to 50% of failed recurring credit card transactions.

Which of the Best PayPal Alternatives Is Right For Your Business?

If you’re running a new business, don’t be fooled by PayPal’s name recognition – it’s far from the most affordable option. Even if you find PayPal’s confusing fees and lack of support frustrating, I know that switching to another processor may seem daunting.

Each of the top PayPal alternatives I’ve shared in this review offer better value and plenty of perks that PayPal lacks, including free POS equipment, 24/7 live support, and impressive features for in-person and online transactions.

If you’re looking for a lower cost alternative to PayPal, Leaders Merchant Services is your best option. It offers industry-low rates, free POS hardware, and excellent e-commerce capabilities.

On the other hand, consider PAYARC if you want a choice of affordable plan types, including subscription-style and a flat rate plan with cheaper rates than PayPal. PAYARC is also great for global commerce.

Or, if you’re dissatisfied with PayPal’s slow payouts or need excellent customer support, I’d recommend ProMerchant. It’s also a top choice for businesses with limited or poor credit history or those flagged as higher risk.

If you’re weighing which PayPal alternative is the best option, here’s a quick comparison.
Best Feature Best For Monthly fee on cheapest plan Transaction fees on cheapest plan
Leaders Merchant Services Industry-low pricing for interchange-plus plans and a meet or beat pricing guarantee Merchants looking to negotiate the best rates or a cheaper alternative to PayPal $9.00 ~2% + 0¢
PAYARC Affordable subscription-style, flat rate, and zero cost plans for US and international payment processing Businesses looking for a PayPal alternative with better plans, features, and pricing transparency N/A 2.49% + 30¢ (in-person)
ProMerchant Budget-friendly rates for retail and restaurants Businesses looking for low-cost processing, including high-risk merchants $7.95 3% + 10¢ (credit)
Square Free flat-fee plan for in-person/online payment processing Small or new businesses looking for lower rates than PayPal $89.00 2.5% + 10¢
Flagship Merchant Services Fast approval and quick payouts Easy onboarding and same-day payouts for businesses that need fast access to funds $7.95 3.58% + 0.19¢ (in-person)
Stax Advanced e-commerce solutions with built-in invoicing and customizable online checkout High-volume businesses that sell online and in-person $99.00 0% + 10¢ (in-person)


What is the best alternative to PayPal?

Taking everything into account, Leaders Merchant Services is the best alternative to PayPal. Whether you’re just starting out or looking for a way to save on processing, you’ll benefit from lower rates, free POS and mPOS hardware, ample e-commerce features, and its assured savings guarantee. 

What are the disadvantages of using PayPal?

PayPal’s high transaction fees, slow payouts, and less-than-stellar customer service can pose significant challenges for merchants. Unwarranted holds on funds and canceled accounts can also hurt your business. In contrast, ProMerchant offers faster payouts, lower rates, and 24/7 customer support.

Which PayPal competitor is best for small business?

This depends on your industry, average transaction amount, and whether your sales are primarily online or in-person. If you’re unhappy with PayPal and comfortable negotiating, it’s hard to beat industry-low rates and a “meet or beat” pricing guarantee from Leaders Merchant Services. If you want flat-rate pricing, Square’s transaction fees are lower than PayPal’s.

What is the best PayPal alternative for international payments?

PAYARC stands out as a top PayPal competitor for international payments. It offers easy integration with several secure international payment gateways and allows you to accept payments in 150+ currencies, far more than what you can accept with PayPal.

What is the cheapest alternative to PayPal for credit card processing?

This depends on several factors, including your industry, sales volume, average transaction amount, and whether you sell in-person or online (or both). Leaders Merchant Services is ideal if you want low rates and free top-of-the line POS equipment.

Our review of the top 10 credit card processors in 2024 can help you pick the best PayPal alternative to save on your processing costs.

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