Online Payment Systems

There are many methods of making payments online. One of the most common payment methods I find that many Singaporean shoppers seem to be bank transfer or mailing of cash. Personally, I am against the mailing of cash since there’s almost no security at all. One of the alternatives is online payment systems. Over my next few posts, I will be looking into various online payment services on the Internet.

Although services like PayPal and Google Checkout are popular internationally, they are still not quite the preferred payment mode for Singapore online shoppers. Most of the common online payment systems use an email to identify the user. So, having an email address means you can create your own PayPal account. It is as simple as that. To explain how PayPal works to my folks, I usually refer PayPal as my online bank. I can link or de-link my debit or credit card to my PayPal account in order to make online payments. When I need the money, I will be able to withdraw my funds to my local bank account. As I am not based in the United States, it will normally take a few more working days for the transaction to be completed. I think that many non-users from my region are not familiar with this particular function of PayPal, though.

While being user-friendly and widespread in its usage, PayPal is not without their disadvantages. My major complaint in over 3 years with PayPal has got to be their conversion rates when I make withdrawals to my local bank account. PayPal usually take a small portion as an administrative charge which is fair enough. People do need to make money for providing the service. However, what irritates me is that the exchange rate is ridiculous at times. The exchange rate given by PayPal is always way below the rates I get from XE.com. Doesn’t that imply that they are making money off me by giving me less favourable bank rates? It is an example of the Exchange Rate Effect that I covered a short while back.

Overall, I still find PayPal to be a worthy service that served me well over the past few years in my online purchases. I have yet to try out Google Checkout though. I will come to that soon and get back to our readers with a review. I got a gut feeling that Google Checkout may give PayPal a run of its money being backed by the big G. What Checkout may be losing out now is its lack of widepsread usage.