Online payment methods

Online payment methods

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One of the main benefits of technology is that it is now easier and safer than ever to transfer money. Using a number of online methods, people across the UK can now send and receive money online in seconds.

What are Faster Payments?

Faster Payments are electronic payments that enable quick transfers of money from one account to another in the UK. Introduced in 2008, Faster Payments are available free of charge and clear instantly (although in certain cases, they can take up to two days to go through).

What are Faster Payments?

Faster Payments are electronic payments that enable quick transfers of money from one account to another in the UK. Introduced in 2008, Faster Payments are available free of charge and clear instantly (although in certain cases, they can take up to two days to go through).

People can send Faster Payments through online, mobile, or telephone banking, and they can also be arranged in physical branches. Those with a thinkmoney Current Account can send and receive Faster Payments using the thinkmoney app.

To send or receive a Faster Payment, you’ll need to either give the person paying you your account information (usually the sort code and account number) or get this information from the person you wish to pay. Faster Payments also use references as a part of the transfer. This allows you to add a note to the payment so that the person receiving knows who it’s from and what it’s for. For example, your paycheck reference will usually contain the name of your employer so that you know it’s from them.

For more on how to send Faster Payments, take a look at our help and support page.

What’s the difference between BACS, CHAPS, and Faster Payments?

BACS and CHAPS are two other methods of transferring money remotely that are slightly different from Faster Payments. The biggest difference between Faster Payments and BACS is the speed, with Faster Payments being a much quicker way of sending and receiving money. BACS payments tend to take three working days to clear. This method of payment is used for transfers like Direct Debits and Direct Credits as these payments are scheduled, meaning that they don't need to be as fast.

CHAPS payments are guaranteed to arrive on the same day as they are sent, but in most cases, there is a £25 transaction fee. For this reason, CHAPS payments are usually only used for expensive transfers that exceed the £250,000 limit on Faster Payments, or if the money is urgent and needs an absolute guarantee of being received on the same day (e.g. property purchases).

Other types of online payments

There are many other ways of sending and receiving money online, and here are some of the most widely used methods.

PayPal

PayPal is an online platform that allows people to send, receive, and request money. Originally rising to fame owing to its links with eBay, PayPal operates around the world and allows for secure transfers between individuals as well as from customers to businesses. A new feature also allows members to request money from others (e.g. to split a restaurant bill).

Klarna

Founded in Sweden in 2005, Klarna offers a similar service to PayPal with the key difference that it allows users to pay for their purchases at a later date. Many online retailers will offer Klarna as a way of paying for purchases, and usually, the purchase page will tell you how long a payment can be delayed for.

International Payments

Most of the payment methods described earlier in this article can only be used for transfer in the UK. A key factor when transferring money overseas is the exchange rate, as different prices offered by competing companies may end up making a transfer more or less expensive. For this reason, it’s best to shop around when looking to pay or receive money internationally.