About Online Payment Services

On-line payment process is a convenient substitute for making payments by cash or check. Online payment services are quite different since they do not require companies to have accounts with them to make a payment or transact business. The transaction process through online services is much faster and secure than conventional modes of payment. They use the secure electronic fund transfer system to settle transactions.

The services are especially popular among online auction sites plus online stores. It has been around long enough to become accepted as a safe and reliable way of paying for online purchases. Whilst there are many advantages of using an online support to conduct business, they do have some loopholes and drawbacks that are occasionally exploited by unscrupulous elements.

The services use a very simple process to move funds. Buyers and sellers have to provide the required information such as their name, email address, checking account information and credit card details. Checking account information is generally asked for, confirming the identification of the user. To pay the seller, the buyer needs to enter the valid email address of the recipient and the amount that is to be delivered. In case the recipient is not the registered member of the payment company, they get an email that guides them to the process of claiming the transferred funds. They are either paid with a check or the funds are used in their bank account.

Payment services cost their client a small percentage of the made amount as fees or services charges to take care of their expenses plus overhead. These fees are less compared to what they would pay for using a credit card merchant account. Another advantage is that these services can be used for making small payments over frequent periods for example customer discounts, commissions and satisfying affiliates.

There are some drawbacks of the system. Many online service providers impose limits on the number of transactions that you can carry out on daily/weekly basis. Businesses that exceed the limit imposed have to pay premium charges or extra fees to continue doing transactions. Over time, this can lower the profits earned by the business.

Online payment services aren’t governed by the rules and regulations that are presenting on federal institutions and banking institutions. Consequently, they are not protected by federal deposit insurance. Such services provide their customers less protection against frauds as compared to credit card companies. For example , the most protection that online payment provider PayPal offers for any fraud dedicated or for non-deliverance of goods is a mere $200.

Online payment solutions are quick to freeze balances of clients if they suspect scams or some type of fraudulent activity within transaction. Resolving such issues may force the users into a legal tangle resulting in huge losses, not only because of revenues and goods lost, but also because of additional costs incurred within fighting the case legally
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