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It's PayPal Time

Online retailers are discovering that alternative payment services fit their businesses to a "T."

This story appears in the February 2003 issue of Entrepreneur. Subscribe »

A growing number of Web retailers are plunging into the world of alternative online payment options to replace or supplement credit card payments. Alternatives include a "bill me later" button on the site, payment by paper or electronic check, or the use of payment services such as PayPal. Although the use of other payment systems reflects ongoing consumer concern about online credit card fraud, these options are often less expensive and easier to use than setting up a merchant account, which is required to process credit card payments.

Most e-tailers favor PayPal's service. Based in Mountain View, California, it's the world's largest online payment system. Recently acquired by eBay, PayPal lets consumers send money to anyone with an e-mail address through their credit card or checking account. Consumers sign up once for the free service-after that, they use their account number to buy products online securely, conveniently and cost-effectively.

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