The alternative would be credit card and bank payment processing through a gateway such as Braintree, Dwolla, or Stripe.
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The customer has virtually no protection if something goes wrong when they pay for hosting services with PayPal because hosting services are virtual goods. If a customer wants protection they should use a credit card.Every hosting company should have paypal as a payment option, no doubt about it.
It also makes it more easy and safe for the customer.