PayPal vs 2Checkout: Which is Better for Your Business?

Online transactions are the lifeblood of any subscription business, be it an SME or a large enterprise and these would be impossible if not for secure payment gateways enabling the online transfer of funds.

A payment gateway serves as a web-based digital corridor to escort sensitive transaction data on the behalf of merchants. In doing so they are able to process, verify, and accept/decline payments. This makes them central to any online business’s billing and payment operations.

Here at SubscriptionFlow, we’re on a mission to help you find the perfect match for your business, through our payment gateway showdown series. Stay tuned for a match between two of the best options out there: PayPal vs 2Checkout in 2023!

PayPal is an industry leader, but many businesses prefer others due to some of PayPal’s restrictions and limitations. This is where the competitor, 2checkout, comes in! Both PayPal and 2Checkout are great choices but differ in many different aspects. Factoring these differences into your decision-making process will help you choose a payment gateway that offers maximum value at the best price-point, based on your specific needs!

Let’s dive in!

Also Read: Payment Wars 1.0 : Stripe vs PayPal

PayPal: A Market Leader

Introducing a payments titan: PayPal!

As an American digital payment solution company, PayPal offers both individuals and businesses the ability to make secure and convenient online transactions as an alternative to traditional methods such as cheques and wire transfers. It is one of the most widely used online payment systems in the world and users can easily link their PayPal account to their bank account, credit or debit card.

Features such as mobile apps, a virtual credit card, two-factor authentication and fraud detection make it a popular all-rounder.

2Checkout: The Competitor

Introducing, now, the sizeable gateway in the competition: 2Checkout!

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2Checkout, or “2CO”, is a global online payment processing platform only one year younger than PayPal. It is a popular payment gateway allowing businesses of all sizes to securely receive online payments from a global customer base.

2Checkout offers a variety of payment options, including credit card and debit card payments, PayPal, as well as other digital wallets. It also supports multiple currencies and languages, making it a popular choice for businesses working with a highly international customer base. 2CO also has robust fraud detection features and offers both traditional and recurring payments which allow businesses to charge customers regularly on a recurrent basis. 2Checkout also provides detailed analytics and reporting tools that allow businesses to track their payment data and gain insights into their customer behaviour. Top of Form

Differences Between PayPal and 2Checkout:

The following table summarizes some core differences between the two payment platforms in terms of features offered and services provided:

2Checkout as a platform is more focused on helping businesses grow, whereas PayPal is more geared towards becoming a market leader for online transactions. A less market-dominating but equally equipped payment solution might fulfil all your business requirements at a much better price, without any compromise in the security offered to your payment space. This is more relevant to startups and SMEs but also your business’s unique pain points!

Features Summarized:

1. Ease-of-Use

2checkout has a dashboard designed with functionality for business, this makes it less user-friendly than PayPal’s user interface which is designed to be incredibly easy to navigate for just about anyone. 2CO also doesn’t offer a freemium like PayPal leading to a more layered setup process involving detailed information about your business. This is hardly an issue for a business setting up its payment space but can’t compare. You also don’t get charged until you make or participate in your first financial transaction.

Having said that, PayPal wins in terms of ease of navigation and setting up, by also providing ample resources simplifying their onboarding process to the fullest extent. There’s an easy-to-follow guide on getting started, a resolution centre, an ask the community section, and a message centre all in one place.

2. 2Checkout Payment vs PayPal Payment

With 2checkout, you start by setting up a checkout link or add a product for which you can choose product code, tax category and price among other details.

Global payments can be processed easily even by checking out with PayPal, talk about grace in the ring! With round-the-clock customer support, you never need to sweat about global payment processing, tax management or compliance issues.

PayPal is optimized for ease. One of the best features is the ability to send money to an email address eliminating the need to enter bank transfer details every time you make a transaction. Some of the payment methods include PayPal balance, linked bank accounts, credit or debit cards, and rewards. 2checkout offers considerably more payment methods than this, however, the options provided by PayPal are the most popular ones in use! Features like PayPal wallet allow you to add multiple cards and view recent transactions with ease.

3. Pricing Plans

2checkout charges a certain fee per transaction based on your account type. The cheapest option charges 3.5% and 0.3 EUR for every successful sale. Payouts can be handled using wire transfer, ACH, PayPal, etc.

PayPal is as popular as it is because it offers some of the most competitive rates out there. On card payments, you pay 1.20% plus a fixed fee that depends on the currency used. For consumers on PayPal, there is no fee.

4. Security Offered

PayPal is one of the safest payment processors out there, protecting both buyer and seller data to the utmost extent. You can get reimbursed if your purchase doesn’t arrive or isn’t what you expected and the transaction process, from start to finish, is entirely encrypted to protect users from fraudulent activity. It also offers proof of delivery and resolution support.

PayPal’s security is a no-brainer but 2CO is no less secure. 2Checkout boasts a multi-tier defence strategy to flag fraudulent activity which includes manual reviews, but also a robust algorithm to ensure all fraud detection mechanisms are armoured up. This means opting for 2checkout is in no way a step down in terms of security as it is extremely safety compliant, with BBB accreditation, PCI DSS, GDPR, and SSAE 18.

5. The Option of In-Person Payments

As mentioned earlier, 2checkout does not offer in-person payments despite their express checkout methods available all across the globe. PayPal, however, allows business account holders to receive payments on a smartphone or tablet as a POS device. It’s as easy as installing an app and ordering your Chip and Pin card reader. It really doesn’t get more convenient than that. If this is a need for your business, then PayPal is a clear winner here!

6. Mobile App

The biggest blow to 2checkout is the fact that it does not offer a mobile application. It can, however, be integrated into other apps. PayPal’s mobile app is available to both iPhone and Android users and allows you to send and receive payments with the snap of a finger. The convenience of being able to access all transaction data on a hand-held device really lays our underdog to rest.

We hope that by now, things will be making more sense to you regarding ambiguities while choosing the right payment gateway. However, no matter whether you need to integrate 2Checkout or PayPal, SubscriptionFlow got you covered.

Even both these payment gateways can be the best fit for those SMEs or enterprise-level subscription businesses that need to offer their subscribers multiple payment gateway support so as to avoid issues like payment failures etc.

Schedule a demo for how SubscriptionFlow integrates with PayPal and 2Checkout, and how it enables subscription businesses to create wonders in the subscription business market.