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7 Great Alternatives to PayPal

NEW YORK (MainStreet) -- For more than a decade, PayPal has been virtually synonymous with online payments. The service has 106 million active users and can be used to make purchases at thousands of online merchants. The sheer volume of PayPal users also means that it's often the go-to method of cash-free person-to-person (P2P) payments.

There's just one problem: A lot of people really hate it.

If you're among the PayPal haters, there are alternatives to consider.

The company has found itself at the center of numerous controversies over the years, with some users going public with complaints over frozen accounts and poor customer service. There was, for instance, the incident during the holiday season in which a charitable Secret Santa campaign run by the blog Regretsy was derailed when the company forced the blog to refund hundreds of contributions. (PayPal ultimately relented in the face of widespread media coverage.) Another recent incident involved a dispute over the authenticity of a violin sold over the Internet using PayPal, which ended with the company telling the buyer to destroy the violin.

Given the millions of active PayPal users, it's clear these customer service incidents affect a very small minority of customers and merchants, and most are perfectly happy with its free and easy P2P services. But those who don't like PayPal have plenty of alternatives.

>>Should You Pay for Credit Repair?

Serve
While PayPal is pretty firmly established among online merchants, there are plenty of competitors on the P2P side of the equation. One is Serve, which allows you to send money for free to friends who also have Serve accounts. It can be accessed online or via smartphone apps.

Signing up is free, and once you have an account you can add money by linking it to a checking account, using a credit card or adding cash via MoneyPak. Adding funds directly from your checking account is free; using a credit card will cost 2.9% of the amount transferred plus an additional 30 cents (starting June 1); and MoneyPak transfers cost up to $4.95 each (though Serve will refund you that amount the first time you use a MoneyPak).

Signing up also comes with a couple of perks. You'll get a prepaid card that can be used wherever MasterCard (MA) is accepted, and it can also be used as an ATM card; the first withdrawal of the month is free, and $2 is charged per withdrawal after that (fees by the ATM owner will also apply). And most importantly, if you sign up for an account by March 31 you'll get a $10 credit.

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