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Common Types of Payments When Purchasing Online

Sellers may offer different types of payment options on an item. Below are different types of payment methods and information about them. Before buying or bidding on an item, make sure the payment method the seller is offering is secure and convenient for you in addition to having an option for recourse should a dispute arise.

As with any type of online transaction, there is always room for fraudulent activity. Please be sure to verify address and contact information and keep an open line of communication.

Payment Type

Information



Advantage

Disadvantage

Bank Deposit
Funds are directly deposited into the seller's bank account.
  • Deposits may be paid into the seller's bank account in person through a bank branch deposit or online through internet banking.
  • Immediate and Convenient Minimal transaction fees.
  • Proof of payment can easily be tracked down through the bank branch.
  • Payments are difficult to recover in cases of fraud.
Cash
  • Instant payment
  • Only recommended if item is going to be picked up in person, never send cash by mail.
  • Cannot be traced
  • No proof of payment
  • Seller may never receive the cash-lost or stolen in transit.
Credit Card
Secure and efficient for making online payments in which a seller has a credit card merchant account.
  • Fast and convenient
  • Easy to trace
  • Proof of payment can be obtained from Credit Card company.
  • Seller must have merchant account in order to accept payment.
  • You will have to disclose your credit card information to the seller.
Escrow
When using an escrow service, a buyer makes a payment, the seller is notified that payment has been received and sends the item to the buyer. Once the buyer receives the item and approves, the escrow service releases funds to the seller.
  • Payment is held by escrow service until the buyer receives and approves of the item.
  • Delays of payment to the seller.
  • Escrow service fees apply.
  • Scammers can create fake escrow services-ALWAYS verify the escrow service is legitimate.
Money Order
  • Provide proof of payment
  • Some services offer a stop payment method if a problem arises before the check is cashed.
  • Sellers need to wait for the money order to arrive and then they need to wait for the funds to clear the bank.
  • There is no recourse for refunds if the check is fraudulent.
Money/Wire Transfer
Funds are transferred between a 3rd party agent such as Western Union. High suspicion of fraud-USE EXTREME CAUTION!
  • Recommendation: Decline to send money to sellers who insist on payment through a wire transfer. Anytime a buyer asks you to wire any extra funds in return is a sure sign of a fraud.
  • Cannot be traced-difficult to identify recipient.
  • No opportunity for a refund in the case of fraud.
  • No recourse is available if the item is not delivered, even if you paid using your credit card.
PayPal
Payments are sent online and can be made by credit card or transferred from a bank account.
  • Fast and convenient-without disclosing personal information.
  • Proof of payment can be obtained through PayPal.
  • Automatic payment tracking.
  • Buyer protection may be offered through PayPal.
  • PayPal fees may apply to the seller.
  • Both buyer and seller need a PayPal account.
  • No guarantee for dispute resolution.
Personal Check
Personal checks can be sent through the buyer's personal or business account.
  • A stop payment can be made if a problem arises.
  • Can be traced to a postal address.
  • Provides proof of payment
  • Seller will need to wait a period of time to verify that funds have cleared.
  • Payments are difficult to recover in cases of fraud.

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