Everyone knows that PayPal is the easiest way to set up a dropshipping store within Shopify. Once you head over to payments it’s already there, all you have to do is press “activate”.
However, more and more dropshippers have been stepping away from PayPal because they tend to quickly hold your funds when customers dispute their orders, this can lead to PayPal holding your funds for up to 180 days.
I’ve seen dropshippers be unable to withdraw up to 6 figures because PayPal has held their money. While it’s their fault for not withdrawing every single day, it’s still a very upsetting thing to happen to you.
Is it possible to dropship without PayPal?
Yes! You can totally dropship without using PayPal. Many dropshippers run stores completely without PayPal. There are just so many alternative payment providers that you really don’t need them.
PayPal comes with many drawbacks for dropshippers:
- They charge an insane 3.7% transaction fees plus $0.30 per transaction
- PayPal freezes accounts up to 180 days without warning
- It can take up to 5 days for your withdrawn funds to arrive in your bank account
They also technically don’t allow dropshipping, which is why they freeze accounts quickly once customer disputes happen.
But won’t not having PayPal hurt my conversions?
While it’s true that many people prefer to use PayPal to checkout, if they are going to order something, do you really think not having PayPal as an option will stop them? No. If your product is good and they make it to the checkout page, they will pay with whatever payment options you have available.
Alternatives to PayPal
Here are some alternatives to PayPal you can use on your Shopify dropshipping store.
Stripe
When it comes to dropshipping, Stripe is the most popular alternative to PayPal. While you do have to apply to get in (shouldn’t be a problem), they are far more convenient as a payment processor than PayPal.
With Stripe you get your funds deposited into your bank account within 2-7 days depending on your country.
Stripe has slightly better fees than PayPal: 2.9% + $0.30
2. authorize.net
authorize.net is a subsidiary of Visa and one of Paypals biggest competitors. They are especially used by dropshippers who have encountered issues with both PayPal and Stripe. While authorize.net does come with extra costs such as a $49 setup fee and a $25 monthly fee, they have been known to be more dropshipping-friendly.
authorize.net charges 2.9% + $0.30 per transaction + 1.5% on international transactions.
3. 2Checkout
Another great dropshipping alternative to PayPal is 2Checkout. 2Checkout has been known to be more accepting of dropshipping than Stripe, which is why some dropshippers prefer using them.
Transaction fees: 2.9% + $0.30 per transaction + extra 1% international transactions
4. Skrill
Skrill is a favourite to many European dropshippers due to their low transaction fees: just 1.9% per transaction + €0.29.
Skrill doesn’t charge any monthly fees.
Conclusion
PayPal doesn’t allow dropshipping and tends to quickly freeze your money for up to 180 days once customers dispute their orders. If you want to avoid losing money, avoid using PayPal in your dropshipping business.
You definitely don’t need to have PayPal setup to run a successful Shopify dropshipping business. You can easily run a store using just Stripe or other payment providers such as 2checkout and authorize.net.
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