Online payment methods have been proliferating at a startling rate since the internet sprung up a few decades ago, and these days you’ve got even more options at your fingertips online than you have in real life. All these different options can be enough to make your head spin if you don’t know what you’re doing, with countless bits of meaningless jargon and mysterious logos transforming your options into hieroglyphs and codes.
But with a little bit of knowledge, all this variety of brand-new payment methods can become an asset rather than a confusion. There’s a way to pay in every scenario these days, and in this article, we’re going to de-mystify the world of online transactions so you can take control of your finances online.
Understanding online payment methods
In short, a payment method is the option you have when purchasing a product or service. In person, you’re limited to more traditional methods, but online, there are several innovative alternative payment systems to make life a breeze.
Traditional methods
More traditional payment methods are still available online. Credit or debit cards are most people’s go-to on online stores, and there’s also the option of using bank transfers if you want a bit more security. Bank transfers are great for setting up direct debits, whereas credit and debit card transactions are well suited to small, one-off purchases on familiar sites.
Alternative methods
Now, it’s those new-fangled payment methods that often leave those less familiar with technical matters in a whirl. E-wallets, cryptocurrencies, prepaid cards and more – it’s these online-based transaction methods that are revolutionizing the way we pay for things online.
Many industries are embracing these alternative methods for various reasons, whether it be global availability, increased security or convenience. One industry that has always been at the forefront of this revolution is online casinos, where operators are always on the hunt for payment options that lend themselves to fast payouts, international play, and peace of mind for their customers.
Below, we’ll dive into how different industries use these payment methods, as well as where they’re best suited for use.
Factors to consider when choosing a payment method
Before getting into the details, it’s important to know the main criteria that you should be considering when choosing a payment method to use online.
Security
For as long as the internet has been around, so have people been looking to exploit the global links of data that accumulate on the world wide web. Now more than ever, it’s essential to be aware of the risk posed to your financial information by hackers and scammers looking to get hold of your cash.
When you choose a payment method, make sure you do some research to make sure the company is reputable and employs proper security measures – and the same for the site you use. Where extra layers of security are required, consider a payment method dedicated to data safety, such as cryptocurrency.
Convenience
Sometimes you just want to be able to put a payment down without thinking, and the more complicated methods are not conducive to that. Mobile payments or e-wallets are best suited to this. They’re designed for your convenience in mind, allowing you to plug in your financial information ahead of time so you can just pay with the tap of a button.
Speed of transactions
A lot of us will have experienced the sluggish bank transfers in the early days of the internet, and when you’re using sites where money travels internationally, this can still pose a problem. This is one of the issues that online casinos faced when getting payouts to customers, leading them to implement speedier payment methods. Customers looking to speed up long wait times should do a bit of research to find the payment method that works in synergy with their chosen website to make things lightning quick.
Fees and charges
Payments made with bank transfers can often incur additional fees imposed by central financial institutions. To circumvent these, pick a payment method that dodges central banking charges, such as e-wallets, or choose to pay with a cryptocurrency that exists as a decentralized system and shrugs off almost all fees.
Availability
Sometimes it just comes down to availability. Small sites will often be limited to more traditional payment methods, while those more innovative operations looking to divorce themselves from central financial institutions may operate solely on cryptocurrency. Do some research before you buy – either to get yourself established on a particular payment method or to find an alternative vendor who offers a way you prefer to pay.
Payment methods and their suitability for casino spending
Now, with that out of the way, we can get into the details. This next section will outline the pros and cons involved in all the most popular payment methods.
Credit and debit cards
Card payments need no introduction; they’re what we use every day at the shop or in the bar. Online card payments work by customers entering their card details that the vendor then verifies with the bank. Payment is near-instantaneous in most cases, and when it comes to local vendors, is unlikely to incur any fees.
However, card payments do face some pitfalls. While debit cards are often fee-free, credit cards are one of the most likely payment methods to incur additional costs. Paying with credit cards leaves you liable to overextend yourself past your ability to repay credit, while debit cards can be too constraining, limiting you to your available balance only. Both have very limited fraud protection measures, especially in lower cost transactions.
E-wallets
E-wallets are effectively an extra layer of regulation on your other payments. You can either link credit or debit cards, bank transfers or crypto wallets, and make payments via these accounts, or operate solely out of an e-wallet balance. There are several e-wallet operators, such as PayPal, Skrill and Venmo, all with their own pros and cons.
In general, e-wallets have a good level of fraud protection, with a central regulatory board that you can appeal to in case of problems. They’re speedy and convenient, with most only requiring a single tap at checkout to make a payment, as the wallet already has your payment information registered.
The biggest limits to e-wallets are availability and fees. Due to the variety of e-wallets available, not every site will have support for every e-wallet, so it’s not the right call for maximum coverage. You’re also still likely to incur fees in select situations, mostly around currency conversions.
Cryptocurrencies
Cryptocurrencies are a new and innovative online payment method that operates on a decentralized network known as the blockchain. There are many kinds of cryptocurrencies you can store in a crypto wallet, but all are global currencies that transcend the limits of borders. The blockchain also grants cryptocurrencies unrivalled security. Transactions are immutable, untraceable and completely disconnected from your personal information. It’s the go-to payment method when you’re concerned about security and anonymity.
However, cryptocurrency is a far more complex payment method than the others. As it’s not yet a stable currency, there’s a high degree of volatility risk when storing money in this format. It’s also the most complex payment method to establish, with an array of verification measures and a certain level of technological know-how to set yourself up.
Mobile payments Mobile payments can be considered analogous to e-wallets, but don’t allow for a balance stored internally to the system. Instead, mobile payments tie your payment information to your mobile number and allow you to pay with just a single click. It’s great for convenience but the most limited payment method when it comes to availability and control of your spending.