Since PayPal emerged in the early 2000s as a payment method on eBay, it has changed the way we send money online.
The main contribution of PayPal has been the high level of convenience it offers consumers. It has allowed individuals around the world to send money for a variety of purposes, as well as allowing new merchants to start selling online, easily.
Today, PayPal has rivals in the form of companies who have found innovative ways to offer consumers more convenience, and more capacity to scale for merchants.
This article will look at 3 PayPal rivals that offer worthwhile innovations, that can change the way we send money online.
Since launching in 2011, Stripe has become an industry leader, making it easy for websites to process secure card payments from their customers.
Behind the success, is Stripe’s belief in the unfulfilled potential of the online economy. The company provides easy to use APIs for developers, making their platform available to companies of all sizes.
A standout example of this is Stripe’s integration with Shopify. Until recently, startup eCommerce stores commonly accepted payments via PayPal, in part, because of the technical challenges that facilitating card payments presented.
Now, with Shopify Payments and Stripe, new merchants who are setting up stores without the help of a developer can accept payment via debit or credit card, just as easily as they can accept payment via PayPal.
Perhaps the most significant way in which Stripe have changed the way we send money online is in how they have helped to power the “on demand economy”. Companies such as Deliveroo and Lyft credit Stripe with simplifying payment flows that make on-demand services possible.
Companies such as Under Armour, ASOS, and Made, also credit Stripe with providing “quick and effective mobile commerce experiences”, for their mobile platforms.”
Since their launch, Stripe has had a huge impact on the way we send money online, and they’re showing no signs of slowing down.
According to Owler, Square is PayPal’s biggest rival when it comes to revenue, and one of their biggest rivals overall.
Square was co-founded by Twitter CEO Jack Dorsey in 2009. The story is that Dorsey’s friend ran a small store, that relied somewhat on customers making spur of the moment purchases. The problem was that the store only accepted cash, and if customers had to leave to get cash, they often didn’t return.
Dorsey was able to create a contactless payment square that allowed the store to accept payments, and cut out the relatively heavy fees charged by payment service providers, some of which, according to Merchant Savvy, could be as high as 4% per transaction.
Today, Square continues to help small businesses accept card payments in store, with their range of Point-of-sale devices. Like Stripe, they also provide online payment gateways for eCommerce.
What is novel about what Square offer, is that merchants can track inventory in their Square account.
In practice, this means merchants can track sales and keep inventory while selling online, and in person. Merchants who sell primarily in store, or primarily online, can easily transition to the other platform with Square.
Klarna offers perhaps the most convenient checkout experience online to date. WooCommerce describes it as “A full checkout experience embedded on your site with Pay Now, Pay Later and Slice It. No credit card numbers, no passwords, no worries.”
You might be wondering how this all works. If a customer has added items to their basket, and has reached the checkout, can they really order those items and just pay later? Yes.
After the customer opts to Pay Later, Klarna performs a background check. If the customer passes, they will be able to complete the order. The customer will then have 14 or 30 days to pay for what they keep.
The implication here, which Klarna advertise, is that you can ‘try before you buy’. The customer can order items in different colours and sizes, update their Klarna account once they have returned the unwanted items, and simply pay for what they keep.
As you might imagine, this method of payment might be particularly convenient for buying clothing online. Brands such as ASOS, Schuh, Topshop, Burton now have Klarna as a payment option.
Klarna is also available on the major eCommerce platforms, including WooCommerce and Shopify, making it available to businesses of all sizes.