Find the Right Online Payment Services

In an interconnected world of sourcing and outsourcing, online payment services become increasingly critical. Be it payment for manufacturing services, China wholesale products or freelancing services, everyone needs to send money online and know the best payment services.

Payments for manufacturing services
For large transactions to include businesses placing significant orders with overseas factories, payment is generally made with a commercial letter of credit. While letters of credit will require more fees that other methods of payment, they offer guarantees to both buyers and sellers of goods that make international commerce easier and have long been in use.

Larger payments that do not require the guarantees of a commercial letter of credit are generally made by international money transfers.  These ACH transfers are efficient for sending payment from one bank account to another, be it for domestic or international payments. One’s regular bank is usually the best place to go when in need of either of the above transactions.

Online payment services
For quick, easy and secure online payments, there are a number of online payment services and methods. These services are usually the best way to go for commercial payments that are not too large or when sending money to individuals. However, there are a few things to keep in mind:

  • Money left in accounts at these services is generally not covered by deposit insurance as it is when deposited at banks.
  • Most are not regulated by the same financial rules that banks must follow.
  • There will be limits as to the size of the transactions that can be carried out.
  • Online payment services have been known to suddenly freeze or cancel the accounts of those they suspect of fraud. Recovering the funds in these cases can take time.
  • There will be limits as to what countries it is possible to send or receive money from.
  • It is important to carefully protect one’s login information or the account could be drained by thieves.

On the positive side, online payment services:

  • Are cheaper alternatives to sending money by bank transfer.
  • Make it very easy to send money to another person or business online and often do not require more than a few clicks of a mouse.
  • Often offer escrow and other services that can be used to protect both the buyer and seller.
  • Scheduled payments and other services that may not be offered at a local bank are also available.
  • They sometimes offer merchant accounts and ways to accept payment that can be used by those doing business online.

The largest online payment services include:
PayPal: Being the biggest online payment service, it offers a lot but has its detractors. Everything from sending money to a friend to receiving online payments through for an ecommerce site can be done with PayPal. It offers easy ways to accept credit card and e-check payments, and money can be added from a bank account for free. There are various fees depending on the type of account and payment.  Generally, services that require fees start at about a .30 cent fixed fee plus a percentage on the total amount of around 2.9%, depending on the transaction. Bad customer service has always been a major complaint with PayPal.

MoneyBookers: MoneyBookers offers an email payment service similar to PayPal with comparable fees. Based and regulated in the UK, it requires registration and verification when creating an account (although the recipient does not require an account). It has a lot of users and can be used to send payments to many countries.

AlertPay: Another service that allows money to be sent via email, it is new in the field but growing fast. It has three levels of membership: personal accounts, premium accounts and secured accounts. While some transactions are free, the fees rise with the account level. It allows money to be sent to non-members if they register (this is free).

Obopay: This service is geared for mobile phones and works on most mobile platforms. Customers with accounts can add money with credit or debit cards as well as bank transfers. Based in California, it also has operations in India.

iKobo: Since it allows people to send and receive money in 170 countries around the world, this service is very international. A first-time receiver is sent a prepaid Visa card by FedEx that can be used at their network of over one million ATMS around the world. After that, the sender can transmit money from debt or credit card to the receiver’s Visa card at anytime. There are various fees for using the service and daily limits on what can be spent or withdrawn on the Visa cards.

Western Uniion and MoneyGram: These services work in similar ways and are not the same as ETF transfers done between financial institutions (see international money transfers). If the sender wants to use them as an online payment service, they must first set up an account and transfer money to it. The sender will then choose a payment option. The receiver will be notified of the transfer and must go to the nearest agent (both services have agents internationally), show some identification and pick up the funds.

Xoom Money Transfer: Another relatively new service, it has gained in popularity because of its flexibility and reasonable rates. Xoom accounts can be funded by bank transfer, PayPal or credit card. Money can be sent to an email address, and the receivers can have the funds deposited directly into their bank accounts or opt for cash pickup and even home delivery in some places. The service is international but limited as to the countries one can send to.

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