Payment Systems Used To Shop Online

All online stores have their own method of payment, however, most of them have similar ways to pay. This article will explain the most popular methods and how they really work.

The Credit Card

This is by far the most popular way to pay for your goods and services online. All you need is a valid credit card with all the relevant information. A reputable site will ask, not only for the card number and expiration date, but also, the CVV (Card Verification Value) which is located at the back of the card.

Most credit cards are designed to be used online, with the exception of a few, depending on your bank and the type of card you applied for. Take for instance a bank branch issued credit card that is not interlinked with the international payment systems. This credit card can only be used in your local stores on land and withdraw from some ATMs.

An international credit card will have the international interlink logo on it. There are two major international interbank networks. These are MasterCard and Visa. Any credit card authorized by MasterCard will any or all of the three logos they use: Cirrus, MasterCard and Maestro. Cards authorized by Visa Inc will carry their logo as well.

Credit Card

Debit Card

There are different kinds of debit cards that are used online.

  1. The bank issued debit card is issued by your personal or local bank. You must have a savings or checking account with that bank to be able to get one. This is a tangible plastic card that looks like a credit card. This card may have limitations so check with your local bank before using it for international transactions.
  2. Prepaid debit. These can be issued by your local bank as well but mostly are issued through third party vendors. There are two types of prepaid cards (a) the re-loadable and (b) the gift card or non re-loadable card. The re-loadable card is sometimes issued free, but a fee is charged by the issuing company for monthly maintenance and transactional fees. This card can be funded by loading cash via payment systems, your employer, bank account or someone sending you cash. The non re-loadable card is a gift card where it is purchased for a fixed value. When you spend the amount of the value of the card you purchase another. This prepaid card looks mostly like a credit card and will display either the MasterCard or Visa logo and is accepted at most locations worldwide, including ATMs and online.
  3. The virtual debit card is just that, virtual. Issued by third parties authorized by Visa Inc and MasterCard, this is operated solely online where a tangible card is not issued. You get to open an account which you can fund with your regular debit or credit card, receive payments and shop online or pay bills. This card comes with limitations as you cannot withdraw from ATMs as with the tangible prepaid cards. You will be issued an account number, CVV and a PIN.


Paypal is the most popular online payment gateway. It operates like a cross between a remittance service and current account in that you can send and receive payments, fund your account (limited to only some countries), withdraw to your bank or use it to shop. Some transactions are free while others cost a small fee. Signing up is free and you can upgrade to premium or business whenever you want. Virtually all online stores accept Paypal payments. There are a few other systems similar to Paypal but are not as popular and may not be accepted by many merchants.

A Check

Now this method of payment is fast becoming a thing of the past but there are a few online merchants who still accept this. If your bank allows it, you may use an electronic check to make your payment. Otherwise, you may have to wait a long time for your merchandise to get to you as the store would have to wait for the check then verify it before sending your goods. This method of payment is used by people living in some countries who do not have credit or prepaid cards, or a Paypal account.


Before you make a purchase, find out from the store what kinds of payment methods are accepted. Make sure the payment method you use is best for your pocket. Use a method that will end up costing you less. Some payment methods are free to use at some merchants, find out from your card provider what transaction fees apply to each purchase.

The most important thing to remember is that you must shop at sites which are secure which will protect your financial information. Happy shopping!

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Carolee is a professional guest blogger with 2 years of guest blogging experience. His main aim is to help people useful tips at