PayPal is a popular choice for many e-commerce businesses, but it has limitations that make it less ideal for dropshipping. One of the biggest limitations is that PayPal can put a hold on funds for up to 21 days or even more sometimes, making it difficult for dropshipping businesses to manage their cash flow. Additionally, PayPal’s policies can be restrictive for businesses that sell products sourced from overseas, which is common in dropshipping.
Given the limitations of PayPal for dropshipping businesses, it is important to consider alternative payment gateways that are better suited to the needs of this business model. In this post, we will examine some of the most popular alternative payment gateways and discuss their pros and cons. Whether you’re just starting out or looking to switch from PayPal, this post will help you find the payment gateway that is best for your dropshipping business.
The importance of having a backup plan when it comes to payment gateways for dropshipping cannot be overstated. Relying on one solution, particularly PayPal, which has been known to hold funds and even close accounts without notice, can put your dropshipping business at risk. The most popular alternative payment gateways include Stripe, 2Checkout, Skrill, and Shopify Payments. Each of these options offers unique features and benefits, and it’s crucial to carefully evaluate and compare them to find the best solution for your dropshipping business.
Best Payment Gateways for Dropshipping Stores
| Payment Gateway | Payment Processing Fee | Countries Supported | Key Features |
|---|---|---|---|
| PayPal | 3.49% + $0.49 (fixed) | Over 203 countries | PCI Compliance, Easy Payment Options, Inventory Tracking |
| Stripe | 2.9% + $0.30 per transaction | Over 25 countries (mainly used in Canada, Australia, and UK) | Dynamic 3D security, Multicurrency Payouts, 24/7 customer support |
| 2Checkout | 3.5% + $0.35 (2 Sell)<br>4.5% + $0.45 (2 Subscribe)<br>6.0% + $0.6 (2 Monetize) | Over 87 countries | PCI Compliance, Multi-currency Payouts, Multi-language support |
| Authorize.net | 2.9% + $0.30 per transaction<br>$25 monthly fixed fee | Over 33 countries | Advanced Fraud Protection, Simple Checkouts, Digital Invoicing |
| Skrill | 0.00% to 5.00% (depending on payment method) | Over 40 countries | Chargeback and Fraud Protection, Easy Integration, PCI Compliance |
| WePay | 2.9% + $0.30 per transaction | – | Apple Pay and Android Pay compatible, PCI Compliance, Direct Bank Transfers |
| Google Pay | 2.9% + $0.30 for transactions less than $3000<br>2.5% + $0.30 for transactions from $3,000 to $9,999.99<br>2.2% + $0.30 for transactions from $10,000 to $99,999.99<br>1.9% + $0.30 for transactions of $100,000 or more | – | Easy Online Integration, Simple Checkouts, Protection against Fraudulent Activities |
| Apple Pay | 1.5% + $0.25 to $15 (depending on amount) | – | Contactless Payment, Easy Online Integration, Protection against Fraudulent Activities |
| Shopify Payments | Basic Shopify plan: 2.9% + 30¢ – Shopify plan: 2.6% + 30¢ – Advanced Shopify plan: 2.4% + 30¢ | 22 countries | Extremely easy to set up with your Shopify store , Completely integrated with Shopify ,Accepts all major credit cards, Supports some country-specific payment methods, Payouts every 3 business days , Only pay credit card issuer’s rate, no additional transaction fees , If enabled, removes extra 2% transaction fee for other payment gateways enabled on your store |
Choosing Best Payment Gateway for International Dropshipping Transactions
When it comes to selecting a payment gateway for your dropshipping business, there are several important factors to consider. In this section, we’ll discuss the key considerations to keep in mind as you weigh your options.
Payment Processing
Fees Payment processing fees are one of the most important considerations when choosing a payment gateway. Different payment gateways charge different fees, so it’s important to understand what each one costs and compare the fees across your options. You’ll want to find a payment gateway that has reasonable fees that won’t eat into your profits.
User-Friendliness
User-friendliness is another key factor to consider when choosing a payment gateway. You want to make sure the payment gateway you choose is easy to use and understand, both for you and your customers. This can help ensure a smooth checkout experience and minimize the risk of abandoned carts.
Security Measures
Security is a critical concern for any online business, and it’s especially important to make sure your payment gateway is secure. Look for payment gateways that have strong encryption, fraud protection, and secure payment processing to keep your customers’ sensitive information protected.
Integration with E-Commerce Platforms
Lastly, it’s important to make sure your payment gateway can integrate seamlessly with your e-commerce platform. This will ensure that your customers can make purchases easily and securely, and you can manage your payments and order fulfillment smoothly. Make sure the payment gateway you choose can integrate with your e-commerce platform and any other tools you’re using for your business.
Conclusion
In conclusion, it is important to consider the various alternatives to PayPal for dropshipping when starting or growing your e-commerce business. With the growing popularity of dropshipping, it’s essential to have a reliable and efficient payment gateway that can support the unique needs of your business.
When considering which payment gateway to choose, it is crucial to weigh the factors such as payment processing fees, user-friendliness, security measures, and integration with e-commerce platforms. This will help ensure that you choose the best solution for your business and provide a seamless experience for your customers.
Finally, we encourage you to share your experiences and insights with others in the e-commerce community. Whether you have used PayPal or have tried any of the alternatives discussed in this post, your input can be valuable in helping others make informed decisions.
By understanding the key factors to consider and the alternatives available, you can make an informed choice and find the right payment gateway for your dropshipping business.
Check Also : How Much Money Do You Need to Start a Dropshipping Business?
FAQ
How does payment work with dropshipping?
Payment with dropshipping works similarly to a traditional e-commerce store, where the customer pays the seller for the product they purchased. The payment is processed through a payment gateway, which securely transfers the funds from the customer’s account to the seller’s account.
What is the best alternative payment method for Shopify?
Shopify Payments is considered the best alternative payment method for Shopify, as it is completely integrated with the Shopify platform and takes just a few clicks to set up. It also accepts all major credit cards and supports some country-specific payment methods, making it a convenient and efficient choice for Shopify users.
Is Stripe better than Shopify Payments?
Both Stripe and Shopify Payments have their own unique features and benefits. Stripe is known for its user-friendliness and strong security measures, while ShopifyPayments is known for its integration with the Shopify platform and easy setup. Ultimately, the better option will depend on where you are located as shopify payments is supported in a limited number of countries.
Do customers prefer PayPal or Stripe?
Both PayPal and Stripe are well-known payment options and customer preferences can vary greatly depending on personal experiences and opinions. Younger generations may prefer PayPal due to its recognition and support for customers with chargebacks, while older generations may opt for Stripe’s user-friendly interface and robust security measures, especially when paying with credit cards.
Why is Shopify payments better than PayPal?
hopifyPayments is considered better than PayPal for several reasons, including its easy integration with the Shopify platform, acceptance of all major credit cards, and support for some country-specific payment methods. Additionally, ShopifyPayments only charges the credit card issuer’s rate, without any additional transaction fees.
Should you use PayPal for dropshipping?
Whether or not you should use PayPal for dropshipping depends on the specific needs and preferences of your business. PayPal is a widely recognized and accepted payment option, but it may not be the best fit for every dropshipping business.
What is the best alternative to PayPal?
Some popular alternative to PayPal include Stripe, 2Checkout, and ShopifyPayments.
Does PayPal ban dropshippers?
PayPal has been known to ban dropshippers in the past, as it considers dropshipping to be a high-risk business model. However, this can vary depending on the specific circumstances and policies of each individual account.
Which is better 2Checkout or Stripe?
Stripe is a better option than 2Checkout for dropshipping, as it integrates seamlessly with Shopify checkout and provides a user-friendly interface.