PayPal alternatives for business: what European merchants use instead

PayPal alternatives at a glance

Why do businesses look for PayPal alternatives?

This comparison is written for e-commerce owners, finance leads and heads of payments in Europe who want to lower costs or reach more shoppers without losing customers who prefer PayPal.

Businesses usually look for PayPal alternatives because of cost, control over funds, or missing local methods, not because PayPal stops converting. PayPal is familiar to many European shoppers, which is why few merchants remove it completely.

PayPal publishes its merchant fees per country on paypal.com. Check the current page for your country before comparing; we do not quote rates here because they change and differ by market.

Card payments through a payment provider or acquirer

A payment service provider (PSP) or acquirer that processes cards directly is the most common PayPal alternative for businesses. Large international PSPs and regional providers offer card acquiring plus a set of local methods under one contract, and pay out to your own bank account.

• Local methods. Which methods are offered in each of your top markets, not just in total.
• Pricing model. Interchange++ (interchange, scheme fee and provider margin shown separately) or blended (one rate for all cards). Interchange++ is more transparent; blended is simpler to forecast.
• Payouts. Frequency, currency and whether funds go straight to your bank account.
• Onboarding. Each provider has its own restricted industries and document requirements. Compare those as carefully as price.
• Reporting. Settlement files that your finance team can reconcile.

Bank-based methods: Pay by Bank and SEPA Direct Debit

Bank-based methods are often the lower-cost PayPal alternative for large baskets and recurring payments. They move money between bank accounts and do not use card schemes.

• Pay by Bank. The shopper approves a transfer in their banking app and the merchant gets a real-time confirmation. It suits one-off purchases with higher amounts.
• SEPA Direct Debit. The payer signs a mandate once and the merchant collects later payments in euro. It suits subscriptions, invoices and instalments. Consumers keep a refund right on authorised debits under the SEPA Core scheme (source: European Payments Council).

Local payment methods by country

In several European countries a local method is the main way to pay online, so adding it can matter more than replacing PayPal. The table lists the methods most merchants consider per market.

Shopper preferences change, so check a recent national payment study before you decide. For Germany, the Bundesbank publishes a regular study of payment behaviour.

Buy now, pay later

Buy now, pay later (BNPL) lets shoppers pay later or in instalments while the provider pays the merchant upfront. It works as a complement to PayPal rather than a replacement, mainly for higher baskets. BNPL fees are typically higher than card fees, and providers differ by country. Our buy now pay later guide explains the models, costs and EU rules.

How to avoid high PayPal fees?

The most common way to reduce PayPal fees is to shift part of your volume to lower-cost methods, not to remove PayPal. How much you save depends on your mix of countries, basket sizes and contracts, so model it on your own data.

1. Export your transactions Export three to six months of transactions by country, method and basket size.
2. Check current PayPal fees Look up PayPal's current fees for your markets on paypal.com, including cross-border and currency conversion fees.
3. Compare effective rates Ask two or three providers for an effective rate on the same mix.
4. Add local payment methods Add local and bank methods in markets where shoppers use them, and show them above PayPal where that matches shopper preference.
5. Keep PayPal and test Keep PayPal live and compare conversion per country before changing the order of methods.

How can you combine several providers without extra integration work?

Payment orchestration lets you run PayPal, a card provider, local methods and BNPL behind one integration. Your checkout talks to one API, your own provider accounts sit behind it, you choose which provider handles which method or market, and routing rules apply those choices to each payment.

Without orchestration, three providers usually mean three integrations, three dashboards and three reconciliation exports. With it, you still have three contracts, but one integration and one place to see payments.

How do you decide which PayPal alternatives to add?

Decide market by market, based on your own transaction data and what shoppers in each country use.

• List your top five countries by revenue.
• For each, list the methods shoppers there expect.
• Compare effective cost per method on your real mix, not on headline rates.
• Check onboarding requirements for your industry with each provider.
• Test payout timing and refund handling before moving volume.
• Keep PayPal during the transition and measure conversion per country.

Combining PayPal and other methods with OrsunPay

OrsunPay is payment orchestration software: you keep PayPal and add card providers, local methods and BNPL behind one integration, with routing rules. OrsunPay is a payment orchestration platform that connects you to licensed PSPs; it does not process or hold funds itself. Each provider keeps its own contract with you and pays out to you directly.

See payment orchestration, smart routing, payment processing fees and what is a payment service provider.