Online Payment Systems

Online payment systems provide the last link between customers and merchants on the Internet, and a good number of providers offer this crucial service. Payments are made at fibre-optic speeds with a click of a mouse, securing goods and services that run to the tune of over $11 billion a year in Australia alone.

Some of the most popular online payment systems are PayPal, which is intimately connected to the Ebay system, MoneyBooker and a host of micropayment or credit card merchant affiliates. The most reputable online payment systems handle large amounts of trade in an automated way, and have installed consumer protection policies to keep their customers' accounts secure.

On the payer's side, online payment systems require a customer to sign up their credit card number or bank account number to the system's database registry, which is secured by password barriers, network control and other anti-hacker measures. Funds in a customer's bank account are replenished and withdrawed in real time (this means transactions that take their funding source direct from a bank account still take place at the pace of bank to bank transactions.)

To cut down on the lag time, online payment systems typically provide virtual credits to be stored in a customer's account. These credits are transferred to a merchant's online payment account instaneously, enabling them to ship the goods right away. The virtual credits will be replenished when a customer "uploads" money from a bank account.

Using a credit card's funds, a customer can pay a merchant right away by relying on electronic transfer, meaning the customer makes a request to the credit card provider (through mouse clicks) to transfer personal funds to the mechant's account. By using an online payment system as an intermediary, the customer doesn't need to reveal personal financial information to the merchant, keeping a secure access to their money.

Online merchants receive money after opening an account with an online payment system. The system provider allows them to download a button or icon and link web portals to their payment account. Funds coming in are converted to virtual credits that they can view upon checking their account, and from there they can transfer credits into their own bank accounts.

At every step of the payment process, the online payment system provider smooths the way by creating a process flow for both customers and merchants using a sytem of credit, acting as the middleman that contacts banks and credit card companies to complete transactions.

By providing a level of anonimity, online payment systems make it easier for customers and merchants to trust each other, and the best online payment system providers can step in to help resolve disputes involving transaction fraud, or botched sales involving defective/unsatisfactory products or non-payment by providing a record of transactions, and by providing backgorund checks and investigations into merchant and customer conduct over their systems.