Q. What are the payment options at internet auctions?

A. Successful bidders usually pay by credit card, debit card, personal check, cashier’s check, money order, or cash on delivery. Credit cards may offer buyers the best protection in that they allow buyers to seek a credit from the credit card issuer (also known as a “charge back”) if the product isn’t delivered or isn’t what they ordered. Typically, sellers on business-to-person auction sites accept credit card payments. In contrast, most sellers in person-to-person auctions require a cashier’s check or money order before they send an item.

In many cases, an online payment service or an escrow service is used to facilitate payment.

Online payment services are popular with both buyers and sellers. They allow buyers to use a credit card or electronic bank transfer to pay sellers who may not be set up to accept credit card or electronic bank transactions. They also may protect buyers from unlawful use of their credit cards or bank accounts because the online payment service, not the seller, holds the account information. Many sellers prefer online payment services because payment services tend to provide more security than, say, personal checks.
In online payment services, both the buyer and seller set up accounts that allow them to make or accept payments. Buyers provide payment information, such as bank account or credit card numbers, and sellers give information about where payments should be deposited.

To complete a transaction, the buyer tells the online payment service to direct appropriate funds to the seller. The seller then has immediate access to the funds, minus any service fee.