Paying on the internet can be safe and easy
With more people than ever shopping at home in their PJs instead of on the high street, internet shopping is booming. There's lots of money to be made and to get a slice of the action, there are online payment systems popping up to facilitate internet spending. This is a quick guide to the main services available, what they do and how much it will cost you to use them. What they are?
Online payment systems do exactly what they say on the tin. They allow you to transfer funds online – either to pay for consumables or to transfer money to other people. They are different from debit and credit cards as the merchant or person receiving the money never gets to see your account details and so doesn’t have to be responsible for keeping them safe on their database. Instead, you enter your details into your online account to upload funds and then the payment comes straight out of the online account, protecting your bank account details.
What are they good for? Instant payments
Bank transfers can take days to clear, so if you need to transfer some money quickly then you can use an online payment system. The money will appear in their account seconds after you execute the transfer. Paying online
Because the transfer of funds is instant, these payment systems are great for online purchases. They also protect you from fraud as you can pay for something without handing over your card details.
Are they safe? Yes. Online payment systems can actually give those who don’t have a credit card a lot more protection for their payments. With a credit card, the payment can be withdrawn if goods are not received. This is because the contract is between the retailer and the credit card company rather than the individual and the retailer. So even if you don’t have insurance, the credit card company does and will be able to get their, and your, money back. Online payment systems also have security built into their payment systems, but often these can differ.
For example, Paypal protects your money under Paypal buyer protection. This allows the buyer to dispute a payment if they don’t receive the goods or the goods are significantly different to the description. The protection covers up to £500 worth of purchases from qualified sellers on eBay (for sellers who have over 98% positive feedback) and £150 from non-qualified sellers.
PPPay and Moneybookers offer a different security practice in the form of an escrow payment facility. This allows you to transfer funds into a holder account administered by PPPay or Moneybookers. Once the funds are in this account, PPPay or Moneybookers inform the seller that the funds are ready and waiting so they can send their item safe in the knowledge that they will get their cash. Then once the item is received, the buyer can give the green light for the transfer to be completed. After a 24-hour inspection period for PPPay and 14 days after the purchase for Moneybookers, during which you can cancel the payment at any time, the money will then be transferred into the seller’s account. However, if the item is not received the funds are safe and will be transfered back to your account. This kind of protection is perfect for auction sites where people may try to swindle you out of your money. In our opinion, this system is better than Paypal’s buyer protection as it is much more efficient – you’ll get your money back straight away without having to spend hours writing complaint letters. However, the buyer will have to pay to use it - £0.99 per escrow payment for PPPay and 1% of the purchase price (minimum 2€) for Moneybookers. We think it’s worth it to be sure that your money is protected. It also protects sellers. As a seller you can insist that the buyer use an escrow payment which guarantees that they don’t pull out of the purchase agreement once you’ve sent your goods off to them. One of the conditions of the escrow payment is that items must be sent by recorded delivery. This means the seller has proof that they actually have sent the item. The buyer then cannot claim they haven’t received the item and withdraw their payment as the seller will have proof of delivery. By showing this to PPPay, they can judge who the funds belong to and execute the transfer if you are genuinely owed the money.
The escrow payment is the only way to protect your money with PPPay or Moneybookers as any instant transfer payments cannot be contested or stopped.
What do they cost? The service provided by online payment systems is pretty cheap. You get lots of services for free, but they've got to make a profit, so they do charge you for some transactions. Fee to Join: Free
Domestic transfer cost: 1% (Maximum 0.50€)
International transfer cost: 1% (Maximum 0.50€)
Upload fee: Free bank transfer, debit card and cheque and 1.90% using a credit card
Withdrawal fee: 1.80€ for a bank transfer or Visa withdrawal and 3.50€ for a cheque.
Receiving funds: Free
Multiple currency transactions: 1.75% foreign exchange commission Fee to Join: Free
Domestic transfer cost: Free
International transfer cost: Free
Upload fee: Free
Withdrawal fee: Free for withdrawals over £50 and 25p for £49.99 and under to bank accounts in the UK. If you’re transferring to other countries extra fees apply – see the fees table.
Receiving funds: Free
Multiple currency transactions: 2.5% foreign exchange commission Fee to Join: Free
Domestic transfer cost: Free
International transfer cost: Free
Upload fee: Free
Withdrawal fee: 1% for bank accounts (minimum 75p).
Receiving funds: 3.3%
Multiple currency transactions: 2.5% foreign exchange commission
Escrow payments: £0.99 Fee to Join: Between £0.01-£1.99 to register a card
All transaction costs: 2.9% of transaction amount plus 20p
Upload fee: Free
Withdrawal fee: Free for over £50, 25p for under £50.
Nochex is the chosen online payment system on the online governement and police auction site bumblebee. For this site you obviously know that you are dealing with genuine sellers - the police. However, there is no security protection offered by this site unless the law forces are involved. You cannot get your money back once it's been sent unless you make a complaint to the police and they investigate the crime. We recommend that you therefore steer clear of using it unless you are using it for bumblebee. Getting started All you have to do to use any of these online payment systems is have an email address and a bank account. Then all you need to do is go to the website of the system of your choice and sign up. Useful links
Other articles that may be of interest
|
Print this page
