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With all the payment methods available, and every PayPal-sucks/blows/eatsballs site pushing their own superior alternative, you'd think that no one would use PayPal. And yet . . .

Back in the old days, PayPal did have strong competition. This ended following the eBay merger.

When browsing eBay auctions you often used to see sellers who would charge a surcharge for accepting payment by PayPal - receiving money by PayPal incurs fees, and many sellers felt it reasonable to pass these to the buyer, should they insist on using PayPal. In fact, almost all sellers charged PayPal fees back then. Why should it cost me money if you're too lazy to write a cheque? (here in the UK, a cheque posted today by first class mail will likely arrive tomorrow, although it'll take a few days to clear, of course)

Until 2001 there were good alternatives to PayPal, companies who didn't charge fees on smaller amounts (less than £50, say) or whose fees where significantly less than PayPal's. NoChex was one of these, and when I first went on eBay and traded DVDs on Usenet, most everyone had both a PayPal & a NoChex account. Back then, everyone stated their surcharges (if applicable) in their adverts or auctions, and everyone understood the reason for it. If you didn't want to pay fees then you just used a different payment method, or if you wanted your purchase delivered in a hurry then you shrugged, paid by PayPal (or one of the alternatives) and in good grace added the appropriate percentage to cover the surcharge. The cost of using PayPal - or other electronic payment method - was fairly transparent even to buyers and frankly, I'm sure the competition did PayPal some good. Realistically, most everyone on eBay has to take electronic payments of at least some type, and now that is PayPal by default.

After eBay bought PayPal in 2001, they ended the practice of passing surcharges on to buyers, requiring sellers to accept all payment types on the same terms, and thus removed the incentive for buyers to use cheaper electronic payment methods. NoChex charges may have been cheaper, but the buyer no longer had any cause to care about that - the seller took the hit on the transaction costs, and no longer had any way of influencing which electronic payment processor the buyer preferred. Subsequently the integration of PayPal into the eBay checkout system was the death of other electronic payment brands.

It seems from their site that NoChex are focussed now on merchant transactions rather than (as they were when I used them) as a user-to-user PayPal-alternative; I'm glad they're still in business, but I feel they (and the consumer) were really stitched-up on that one - if eBay were an operating-systems company we'd describe this behaviour as leveraging their monopoly to extend into other areas, or something.

Looking at my PayPal account, I see that PayPal fees cost me 3.8% on a £45 transaction - a sum that quite frankly I find ridiculous for moving a few bits around a database. How come credit card companies can do the same thing for 1% or 2%, or I can transfer money into someone else's bank account at no charge? Meanwhile, PayPal are raking in interest on all the money sitting around in users' accounts AND charging them fees for it - PayPal's free service is just useless as soon as someone makes a payment to you by credit-card, and unless you decline that payment and make separate arrangements for receiving those funds all subsequent payments you receive will have fees applied, whatever their source. You might disagree with me and say that 4% is quite reasonable for PaiPal's services, and it's true that PayPal are more efficient than our old British banking institutions, but they don't provide any customer service at all - If I'm mad at my bank I can phone them up & ask to speak to a supervisor; if I'm dissatisfied with th

Use nochex

http://www.nochex.com/

They are cheaper for low prices/volumes. The DTI have a comparison web site comparing the processing companies for small businesses:
http://www.electronic-payments.co.uk/

I wonder why eBay believes Google Checkout is unsafe, unreliable and/or inconvenient?

Admittedly Google do lack a track record as a financial services provider, which is one of their listed criteria. I'm more interested in why nochex is on that banned list, as they have been around as long as PayPal and are regulated as a financial service by the UK Government. Their fees are reportedly better than Paypal's, maybe that's how they ended up on the list.

In the UK:- http://www.nochex.com/ (They charged slightly less than paypal the last time I looked).

Well in the UK we use:
http://www.pppay.com/ and http://www.nochex.com/.

Both of which beat Paypal on customer service and on fees.

So? Over here in the UK, we *still* have Paypal alternatives, such as NOCHEX and PPPay. Are you seriously telling me there are no slightly smaller, less-evil alternatives to Paypal in the US?

Worldpay is not really a competitor to the main paypal market, since iirc it costs GBP100ish (USD 180) a significant amount (to an average part time ebay seller) to set up, plus an annual yearly fee, plus they take so much per transaction. Nochex is a competitor, but it was limited to UK customers only last time I checked it out.

In the UK we still have NoChex, which is a very similar kind of thing...

A replacement service like http://www.nochex.com/ ?