Online Payment Systems

There are many online payment services which provide you with a simple way to accept payments for your online business. Unlike banks and credit card companies, services such as PayPal and ClickBank don’t require a business to have a merchant account. They process the orders for you and the money is transferred to your bank account electronically.

Such services have become especially popular among those who use online auction sites (such as Ebay), but many other online businesses are beginning to see the advantages of these services as well.

Although these services charge a small processing fee, it’s less than you would normally pay for a credit card merchant account. Also, such services can be especially helpful when you need to arrange for small repetitive payments for hosting or an autoresponder.

But there are some drawbacks to using a payment service.

  1. Many of them impose a daily or weekly limit on the amount of money that you send or receive. So if you want to exceed these limits you may find yourself incurring an additional fee for a “business account” or “premiere account”.
  2. These services are not banks, and therefore are not subject to strict banking regulations or protected by Federal Deposit Insurance.
  3. Often these services provide their customers with less protection against fraud and abuse than many credit card companies offer.
  4. Also, they are sometimes quick to freeze a customer’s account if they suspect fraudulent or other criminal activities are taking place.

Before you sign up to any payment service, read their terms and conditions thoroughly. It is important that you fully understand and accept the service’s dispute policy, limits on liability, their fee structure and any other rules or regulations that they may have. It is also important that you do not keep too much money in your account, rather keep enough to conduct a few days of business and any unused funds should be transferred over to your regular bank account.

Following are a few more payment services that you may want to look at further when setting up an online business account.

  1. Authorize.net. This service processes credit card and checking account transactions.
  2. BidPay. This allows person to person payments. They accept a credit card payment from the payer and then send a money order to the payee.
  3. BillPoint. This also allows person to person payments. Originally this system was being targeted specifically at Ebay customers.
  4. E-Gold. This allows the payment in gold (silver, platinum or palladium) to be made from one customer to another using an account based system.
  5. PayPal. This is probably the most well known payment service. It allows user to user payments and money transfers from funds in the user’s PayPal account. It also allows payments by credit card and eCheck.
  6. World Pay. This service provides both an internet merchant account, and payment processing service in one package.

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