It seems that most hosting customers prefer to pay by credit card.

Anyone have a preference for another method? Check/MO, ACH, PayPal etc?

Nope I always pay by credit card. It so easy to purchase the hosting in any currency. Its also quick and easy. I wouldn't pay any other way.

How about PayPal? (or a similar service)

I've heard several hosting companies are offering it as an option.

I haven't heard of that at all. Maybe its because I'm in the UK. What is pay pal?

http://www.paypal.com allows web sites who don't have merchant accounts to take credit card payments. Anyone who wishes to purchase something on your site clicks on a payment icon and is sent through to the paypal site, where they can make a secure payment.

Its not ideal as its a little unprofessional, but if your not yet eligable for a full merchant account with your bank its an excellent alternative.

James is correct about receiving payments from CC w/o a merchant account. Fees are a little lower than a CC processor too (they used to be free but nothing lasts for ever).

One other point - PayPal can also take funds out of a linked bank account. So even if you don't have a credit card you can still use the service. Also, they have a "batch request" feature that let's you request payments from many people at once.

Yahoo's PayDirect is a similar service.

I had heard a LOT about PayPal.
Ive had requests to accept PayPal as an option for payment on hosting, so we've added that to our services.
Speaking from a personal point of view...I think it is GREAT. I like the feature of it working like an ATM card, automatic debit. It works great and has had flawless transactions so far.

Does paypal cover all of the major credit cards?

Visa
MasterCard
Diners
Discovery
Amex

Have a look at it!
http://www.paypal.com
They have recently started accepting accounts internationally too.

Right now I think it's just Visa and MC.

We use it on our other site (e-tail). Get some sales with it, mostly people who probably already have it for auction paying.

We've found that the demand for customers paying with Amex is increasing. Unffortunately the cost of handling Amex payments is still much higher than alternatives such as Visa and Mastercard. Which payment methods are your clients favouring most?