Now that so many of our financial activities take place online, whether shopping, paying bills, or tracking our savings, it can make more old-fashioned practices appear hopelessly obsolete and cumbersome, such as writing a check or pulling out cash from an ATM.
As the use of credit cards and online shopping sites has exploded, numerous kinds of online payment mechanisms have also exploded. At least one of them is undoubtedly really familiar to you: PayPal.
But other e-commerce platforms are structured for less ‘legal’ purchases, and are not between a customer and a firm, but between friends or family members: they are called peer-to-peer payment systems. With peer-to-peer payment applications, it’s easy to pay someone with nothing but your mobile, whether for your half of a group meal, your share of the rent, or for the concert ticket your friend graciously promised to purchase using her credit card.
To make payments and pass money person to person, some online payment services also allow you to do both. Everyone has its own unique characteristics and advantages.
Here’s a look at the numerous payment schemes and peer-to-peer applications online.
|TransferWise||Transferring money internationally|
|Google Pay||Transferring money and making purchases|
|Skrill||Those who live in the UK|
|Square||Taking business payments on the go|
|Stripe||Integrating with online store|
|ProPay||International payments for businesses|
Study of online payment apps in depth
Venmo (a PayPal subsidiary) is a mobile payment app wildly popular with millennials. It’s a digital wallet that enables users to submit their contacts with money. It’s also very intimate. (It has a feed where you can leave notes on a purchase, such as a social media platform.) With Venmo, transferring money from your bank account is free of charge, although there is a 3 percent charge if you pay by credit card (meaning: don’t do this).
Instead of sending them a check, Venmo is usually used to give money to someone you know directly. For instance, when I shared my friend’s hotel room, she linked me to Venmo and transferred $60 (half of the hotel room) to me. She only had to bind to me on Venmo and press to move money because all of our bank accounts were related to our Venmo accounts. It was almost) without initiative.
Venmo is built for transactions between persons who directly know each other. It’s not meant for bills or other transactions being paid.
However it is acknowledged as payment by certain small business owners. For eg, my mobile dog groomer takes Venmo as a free way to let her clients pay without her trying to set up a credit card acceptance solution. I’ve noticed it’s unusual to spend an entire month without anyone asking me if I can give them Venmo money.
To support you share the cost of a pizza with your friends, there are plenty of applications, so what about your foreign friends? For that, TransferWise helps. In 59 nations, you can send money to customers, with new currencies introduced on an ongoing basis.
The payments for these exchanges you will pay depend on the currencies being exchanged. The specific payments for your case can be reviewed here. TransferWise agrees to apply just a slight margin to what it costs them to send the recipient’s money from your account.
The great thing about TransferWise is that the payments can be seen in advance. You simply type the number you are going to submit on the TransferWise website’s main page and pick your currency and the recipient. Then you will see the overall fees and the exchange rate, followed by how many the user on the other hand will see.
You already know that prices will change from one day to the next if you’ve ever dealt with currency exchange. TransferWise also supports out there, ensuring the prices advertised. You will lock in a rate for 24 hours for the majority of currencies. This does not require evenings, but if you give your funds in then, you’ll get even more time.
3. Google Pay
Google Pay enables you to transfer money for free via Gmail from your bank account. When you write an email and enter the amount of money you want to give, just look for the $ mark. You already do much of your contact via Gmail, if you’re like me, so this will raise Google Pay to the top of your list.
The added advantage of Google Pay is that it helps you to make payments online and in stores. However those shops must accept Google Pay as payment, and not all firms do. Yet Google Pay can be used to pass money and to make payments, unlike any of the other online payment services.
One of Google Pay’s best things is its stability. Your financial information is encrypted as you transfer money in the event that it is intercepted along the way. You get additional security and though you’re using it at the counter. Your payment data are not only secured, but you can also pay using your phone, speeding up the process of checkout.
As an additional bonus, from sites like Panera Bread and Walgreens, you can relate to your reward memberships. Every time you spend on one of those partners, you can rack up points without having to enter data or lug around a passport.
Skrill is a UK based online payment system that enables you to move money globally to another person. Transfers of funds and transfers are automatic, but if the exchange calls for a currency transfer, there is a 3.99 percent charge. Skrill can also be used online for making transactions. However, if you let your Skrill account go idle, you’ll be paid a $5 USD annual fee.
You’ll need to move the money straight from your bank account to the other person’s to enjoy Skrill’s fee-free transactions. Everything you’ll need to do is have your own banking data. In order to get the funds exchanged, the person would normally need to provide banking account numbers at the other end. They will keep the money in an Ability Wallet in certain countries and use it with participating merchants as payment.
You can use Skrill for gaming online as well. (Something for which you can’t use PayPal.) To be able to do this, you would need to deposit money into your account, and explicitly mention that the funds will be used for gaming when requested. If you deposit money without specifying it, you won’t be able to use your Skrill money to pay for gambling websites.
Payoneer is an online payment system and peer-to-peer payment solution that allows you, in addition to making purchases, to transfer money to anyone anywhere in the world. It offers you a pre-paid Mastercard that can be used anywhere that Mastercard is approved.
Since Payoneer has a partnership with many freelancing platforms, Payoneer is very popular with freelancers. There are free Member-to-Member fees. Otherwise, 3 percent for credit card charges and 1 percent for an ACH bank debit transfer would be paid. You will be paying a monthly fee of $29.95 USD if you choose to have your money added to a prepaid Mastercard.
Although you can explicitly pass funds from Payoneer, you can find it’s incorporated into some of the pages you’re already using. As a payment option for members, Fiverr, Amazon, Airbnb, and Upwork both offer Payoneer. Sometimes to reduce payments, those who require a lower-fee option to get paid abroad will prefer Payoneer.
Many that use Payoneer specifically can do so using a request for payment. You only click on “Receive a payment,” enter job and customer details, and wait to get paid. When payment has been made, you will get a notice in your Payoneer account that there is money pending. Then the funds will be credited to your bank account. The costs for this varies, but in the U.S., to transfer the money from Payoneer to your branch, you can pay a charge equivalent to up to 2 percent of the exchange rate.
Not all in-person company runs with a cash register in a storefront. With that, Square helps equip small business owners and freelancers with a way to swipe a card quickly. A phone or tablet is connected to the scanner, allowing you to receive payments anywhere.
The attributes of Square are not only limited to accepting cards, however. You can get paid invoices, use the online shop app, or manually input key numbers to receive payments by phone. Fees range for manually-keyed transactions from 2.6 percent + $0.10 for swiped cards to 3.5 percent + $0.15.
To take credit cards, small companies that have a storefront should set up a Point of Sale terminal. The cost varies by location, but if you have your own iPad that connects you to the service, you can get the solution for free. You can swipe credit cards until set up and also allow contactless payments through Google Pay or Apple Pay.
Square also offers inventory management and loyalty programmes in addition to payment. Robust monitoring helps you to control the rate of sales and inventory without having to connect to other apps. Only the instruments you need for a fully customized solution are chosen.
Stripe is another alternative targeted for the needs of small businesses. It is possible to combine the payment platform with your online store or use it independently by guiding clients to pay you there.
Fees on each effective card charge begin at 2.9 percent + $0.30. You will also accept overseas fees, with each purchase adding an extra 1 percent fee.
In order to help you grow your client base, Stripe provides support for more than 130 different currencies.
Do you have a company focused on subscriptions? Stripe is also willing to support you there. Invite consumers to subscribe and let the remainder be done by Stripe. The infrastructure of the app helps handle such subscriptions for you, tailoring their activities to the actions of a client. For example, if a subscription transitions from trial to disabled, Stripe changes the account automatically to prevent you from having to track activity.
Stripe provides ACH transfers for B2B firms and freelancers, too. Best of all, they’ll be better than they will be for most programs. The platform automatically creates a virtual account number when you send an invoice via Stripe, to shield your own banking details from being sent to your client.
2Checkout is a digital site for enterprise checkouts. With 33 language choices and 100 available currencies, merchants can serve a host of customers using 2Checkout.
The costs you pay depend on the country in which you are. In the US, for a good transaction, you can pay a premium of 3.5 percent plus $0.35.
To make it easier for your clients to pay, link 2Checkout’s Avangate to your website. Without restricting orders to the currency of your own country, you can sign clients up for monthly payments such as premiums or manage one-off transactions. Accept more than 100 currencies of whatever currency you accept, with payouts available.
You get two big options with 2Checkout. You can let 2Checkout perform all payment processing for you, including paying taxes and consumer invoicing, or you can go for the model of do-it-yourself. The latter allows you more leverage, but you still need to take care of raising and remitting all appropriate sales taxes. As a mix of both, you can also set your merchant account.
TurboTax, Mint, and QuickBooks manufacturers also have the ability for small businesses to accept payments through QuickBooks.
For those who already use Intuit’s goods, this is a highly enticing option. You will not only have an account already, but you will also find the interface familiar. If you already have your financial details in Intuit, you will find it easier to import the information you need to get started.
Current clients with QuickBooks would pay 1 percent for bank transactions and 2.4 percent plus $0.25 per card swiped. Invoiced card fees are 2.9 percent plus $0.25 and 3.4 percent plus $0.25 are paid for key card transfers. New QuickBooks consumers would have to sign up with a subscription to accept payments, beginning at $8 a month.
You should send invoices that have a Pay Now button until you have your account set up to make it as convenient as possible for receivers to make a payment. For those in-person clients, you can even order a free handheld card reader that lets you swipe credit cards.
For organizations of all sizes, ProPay provides payment processing software. They will work for you if your company is tiny, on the road, or global.
The ProPay JAK card reader can come in handy if you accept payments on the go. It plugs into your computer running iOS or Android. You may also accept online or phone payments.
Fees vary on the sort of account you have; here you can see the various prices. As for most payment processing applications, with purchases that manually key in you’ll pay more than those that are swiped. This is known as a “card not present scenario where a customer offers the number by phone or internet, which presents a significantly greater danger than when a real card is in front of you.
The nice thing about ProPay is that you will use the ProPay Prepaid Debit Mastercard® to access the money in your account. In your ProPay budget, this is included which makes it easier to keep your personal and company funds apart. The additional move of moving money to your bank account also saves you.
Benefits of online payment apps
First of all it will help to look at the general characteristics of online payment applications. Online payment applications make receiving money from clients convenient for an organization of any scale. Peer-to-peer payment applications make it easier for your friends to pass money. Here are few advantages to remember.
- Friends and family members pay quickly.
- In a few taps, move money from your bank account to someone else’s.
- Set up monthly payments to members of friends or family.
- Stop taking cash with you around.
- Before you go out with friends, miss the ride to the ATM.
- Support encrypted purchases on the small business website for goods or services.
- Set up a Point Of Sale system using a tablet in a brick-and-mortar business.
- Accepting transfers using a card swiper on the move.
- Provide an option, which can be dangerous, to personal tests.
Some of them are not going to appeal to you, while others are. You will begin to narrow down what you’re looking for in a payment app by looking at all the different options that are available.
Best payment app features
There are some features to remember when you’re exploring payment applications. When you see one providing it as a feature, you might not even know you can do any of these items using a payment app. In a payment app, here are some characteristics you may find important:
- Fees-We would all want it to be fee-free, of course, but we know that certain financial transactions are accompanied with an expense. I’m searching for an app that at least has a “friends” option, allowing me to transfer money to individuals I know directly without fees. However since credit card-based transactions would usually charge a fee, you will also have to hook up a checking account to do this.
- Media Feeds-This is not what I’m searching for, but others find social alerts useful with peer-to-peer payments. This lets all of your other buddies hear about it as you pay your buddy for half of those summer concert tickets.
- Protection- Yeah, for some of these applications, the authentication process may be a pain, but I like it. It means that confidentiality is taken very seriously by the platform, which increases my confidence that my financial data is secure with them.
- Send to email-Some peer-to-peer payment systems allow you to send an email to someone else using your contact list’s email address or details. With just a tap on the phone, you can also send money through some email and messenger applications. When you talk with others regarding future plans, I learned that this comes in handy. In the same message string, you will send your share of the funds and make sure the other party sees it.
- All-in-one features-Some applications incorporate the best of peer-to-peer and internet transfers, enabling you to use the same software to pay. You would need to specify which organizations allow payment in that manner, so it can be a simple way to handle the budget.
- Expand payment options-Companies face the continuing challenge of making it as easy for company as possible. The more payment choices you can have, the less likely you are to lose clients who are constrained on how they can pay.
- The internet has opened up companies to meet an international client base through international payments. Being able to receive payments with reduced costs through various currencies is a big advantage if you want to go global.
- If financial software is used by your company, search for integration. It will help you keep on top of things while reducing your own workload by being able to import details about your purchases.
You no longer have to believe that PayPal is the only online payment mechanism. To compete with PayPal, there are so many choices that exist.
But the opportunity for theft, too, comes with simple online transactions. Venmo has had its fair share of cases of theft, which may have very serious repercussions. You have to be very careful to use them with the proliferation of online payment services; simplicity will lead to carelessness and theft.
The primary features of each online payment system you can know are: ease of use, costs, protection against theft, and when and how to use the system. Not all payment mechanisms are similarly developed.