Are you looking for alternative methods of making payments? What options are available to help you to make payments online or to exchange money between family and friends? Today, there are more options than ever. Here is a look at ways you can make payments.
Using Cash
The simplest way to make a payment is to use cash. Cash does not incur any interest charges or usage fees like other methods. The big drawback is that you need to carry the money with you and be able to hand the cash to another person to use it. Remember that cash is also challenging to track and can be easily stolen, making it a higher-risk payment method.
Writing Checks
Writing a check is a viable way to send money to someone. When you write a check, the money is removed from your checking account and deposited into the account of the person you wrote the check to. Checks are safer to use than cash, but they take longer for the funds to transfer since a person needs to write it, receive the check, deposit the check, and the bank then needs to verify the accuracy of the transaction before depositing the funds into the receiver’s account.
Credit Cards
Credit cards are an easy way to safely make a payment. When using a credit card, you have a certain number of days to pay off the amount you purchase (called the grace period) before interest charges apply to the borrowed funds. Credit cards are highly convenient for online and in-person purchases, and some even offer rewards programs where you may be able to save money. The Fair Credit Billing Act also provides protection for credit card purchases. If fraudulent charges occur or mistakes happen, most credit card companies will allow you to dispute the charges and limit your liability for them.
Third-Party Payment Services
Third-party payment services allow you to make payments online using their accounts or apps. You do not have to set up a bank to use these accounts. For example, PayPal is a commonly used third-party payment tool. You can send and receive money online by providing your email address to individuals. There are fees associated with some transactions and accounts.
What’s more, you can send and receive money from people worldwide. You can then use the funds in your account to make purchases online by any online merchant that accepts PayPal. Other examples include Venmo, Zelle, Google Pay, Apple Pay, and Amazon Pay.
Bank Transfers
A bank transfer is an electronic transfer of funds from one account to another. It is a method that does not require using a bank card or a check to transfer those funds. The transaction is completed between two banks, which is why there are few fees associated with this process. There is also minimal risk involved in the process. To conduct this type of bank transfer, you need to know your account numbers and those of the other party. Some banks do not do this for consumer transactions, while others allow it.
EFT Payments
An EFT (Electronic Funds Transfer) payment is a payment method in which the amount is drawn from your checking account. They are also referred to as electronic checks or ACH (Automated Clearing House) payments. No actual paper check is involved in the process, and the entire process is handled digitally. This method is very effective and fast, too. You can usually set up these payments through a mobile app or online bill pay with your account. Sometimes employers can set these up to allow for the deposit of funds directly into the employee’s bank account.
Money Orders
A money order is a way to send money from one person to the other in a safe manner. It is a printed order for payment for a specific amount of money. Individuals can obtain a money order by paying a third-party provider for the order. Then, a paper form is provided to the purchaser, who can submit it to the party they need to pay. This method eliminates the need for the use of a personal checking account. Some organizations prefer this method.
Electronic Bill Payment
Electronic bill payment is at the core of most online banking systems that financial institutions use today. It is also used by service providers such as utilities, credit card issuers and other lenders, insurance companies, and hosts of different subscription services.
An electronic bill payment is a way of sending money from your bank account to another account. The most common use of this payment method is to move money to pay bills or make credit card payments.
When electronic bill payment is used through your bank or credit union, you can pay bills via their online banking system. In other cases, the company providing the good or service will provide customers with an option to pay directly on their website through a connected bank account or via debit or credit card.
Prepaid Cards
A prepaid card is a simple tool that allows a person to purchase the card for a fixed dollar amount from the seller. Numerous banks and third-party organizations offer these types of prepaid cards. They work much like gift cards. The buyer decides how much money to put on the prepaid card and pays for it. They can then give that card to anyone else to use. Prepaid cards often have fees associated with their use, some of which can be higher than others.
These are some of the most common payment methods in person or online. Most people will likely use several of these methods to make payments throughout their lifetime, depending on the various scenarios that fit their use.