Popular & Safe Payment Methods (Online and Offline)

With so many available options and technology developing at an unprecedented rate, how do we use the right payment method? Traditional methods of payment such as cash on delivery are used less, and e-commerce stores nowadays regard bank transfers as an alternative form of payment.

All of the below online or physical payment processors are very reliable if you know the recipient of the funds. We will look at them from the angle of suspicion, where you don’t know the recipient. The fees vary for each payment method and the risks associated with a specific payment option depend on the situation you are in.

world money

What are the pros and cons of each one? What is the best way to make a transaction? What is the best payment method for a seller and which one is more convenient for the buyer? Read on!

Online Payment Methods

Online Payment Methods

Credit and Debit Cards

Credit and debit cards are still the most commonly used means of payment worldwide. Even though they are suspected to many forms of credit card fraud, they remain one of the best and safest options. A big reason for this continued success is the ability to initiate a chargeback in case anything goes wrong.

As each country has its own issuers, it can sometimes be difficult to shop internationally as not all cards are accepted in different regions! Not to mention the differences in transaction and conversion fees.

However, digital-only banks are on the rise and are gaining popularity because of their flexibility, efficiency and simplicity. These banks offer their own credit and debit cards and have very competitive rates.

Transferwise, Revolut and N26 as well as Chime are among the most popular.

Most of these challenger banks offer free international transactions with the best conversion rates, crypto-currency options, increased security with instant spending notifications, budgeting features and are generally an easier experience when transferring money or making payments abroad.

Payment risk is tilted towards the seller. Buyer is well protected with these payment options, however if the seller uses a fake account, chances of getting a refund are very slim.


E-wallets offer another alternative for online purchases, essentially by using a prepaid credit account.

Google Pay, Amazon Pay, Apple Pay, Alipay and Venmo are some examples of popular companies that offer e-wallets and are used worldwide.

It’s easy to set up an account and many of these companies now use biometric authentication for increased security when making payments or online bank transfers, such as fingerprinting or face/risk-recognition.

This payment method is often preferred because you don’t have to enter your credit/debit card details with every payment, making the process faster and easier.

Payment risk is tilted towards the seller. E-wallets are just as safe as credit cards and the buyer is well protected with these payment options. However also here the seller may use a fake account and emtpy it before you initiate a refund request.

Payment Gateways

For online payments, it is often possible to use a payment gateway. Some of them also act as an e-wallet. Those that do are interesting for the buyer. If there is only a payment gateway functionality, then the solution is geared toward sellers.

Payment gateways are trusted third-party companies that process the payment, often resulting in increased security, speed and efficiency.

Common gateways that are used internationally are Paypal, WePay, Stripe, Authorize, WorldPay, Skrill and Klarna.

Each company varies in terms of transaction fees, cross-border fees, and other monthly fees, so it is good to consider which option is best suited to your specific needs.

Payment risk is tilted towards the seller to the same degree as with e-wallets.


Peer-to-peer payments allow users to easily transfer money to another person or company without using a third party. Platforms such as Facebook Messenger, CirclePay, Moneytou and Cell offer P2P payments.

Although this payment method is generally not intended for commercial use, some independent sellers in online marketplaces choose this option because it is a fast and direct method.

It’s important to be extra alert when making or accepting a P2P transfer. Only use this method with people you know to minimize the risk of fraud as you do not have the regular buyer protection options.


Cryptocurrencies are slowly being introduced as a common means of carrying out transactions. Commonly used e-wallet and gateway companies now accept cryptocurrencies.

Although not every company accepts this payment method yet, the use of cryptocurrencies is considered the next best step in the development of online and offline payments.

Once a direct transfer of a cryptocurrency is initiated you can not reverse it. Therefore only use this payment option with someone you know and trust.


Escrow is an online third party service that makes deals safe. Once a deal between buyer (import) and supplier (export) is negotiated, the buyer sends money to escrow. When your funds arrive at escrows office they notify the supplier about this.

They will then send the goods directly to us. When we receive the goods we have a previously agreed upon inspection period. In this time we can verify the validity of our items. If everything works, we call escrow who releases the payment to the buyer. Payment is done, goods have arrived and everybody is happy.

Risk is evenly shared between buyer and supplier. An escrow service is a very good payment option to be used with unknown recipients, however one must note there are also fake escrow services.

Traditional Payment Methods

Traditional Payment Methods

Traditional payment methods include instruments such as checks, letters of credit and bank transfers among others.

Bank Transfers & Postal Orders

Teletransfers and postal payment methods are some of the most known payment forms and are extensively used worldwide. These should be used between buyers and sellers who have already established a mutual trust.

If you are using this method to purchase bigger amounts of overseas stock for your company, propose a 30/70 deal. That means you pay 30% of money in advance before the production of goods starts and 70% after you inspection of goods.

You need to give the supplier an incentive to meet your requirements. By paying the supplier in full before quality has been verified, you remove that incentive. Therefore, the final payment must be withheld until after the batch has been released by a quality inspector and any laboratory test results have been returned.

Risk is mostly on the buyers side, but you can at least minimize it with divided payments.

Money Wiring Services

In this world of omnipresent ATMs, tap-to-pay checkouts and automated bank deposits, there are still times when it is necessary to hand over or pick up actual physical cash. That’s why money transfer services like MoneyGram, Western Union and Xoom have tens of thousands of agents in cities and towns around the world.

There are a number of reasons that you might want to send money with the help of a money wiring service. You would usually send money with such services to a family member or friend:

  • when they have run out of money on holiday
  • when they have had their wallet, cash or bank cards stolen abroad and need money urgently
  • to help pay student fees
  • as a birthday gift

Never would you use it to pay for an item that you are unsure about receiving. It is widely used as a payment option amongst scammers.

Letter Of Credit

A binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be transferred to the seller. Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods.

In order for the payment to occur, the seller has to present the bank with the necessary shipping documents confirming the delivery of goods within a given time frame. It is often used in international trade to eliminate risks such as unfamiliarity with the foreign country, customs, or political instability.

Payment risk is evenly distributed between buyer and seller and is a very good payment option to be used with unknown recipients.

Document Against Payment or Bill of Exchange

Instructions are given by a seller to his bank that the document attached to a SIGHT draft for collection are deliverable to the buyer only against payment. When the foreign bank receives the documents, they will contact the buyer and provide documents to the buyer only when the buyer pays.

How it works

  • Seller fills out a form at his bank
  • Exporter sends the goods and documents to a freight forwarder
  • Freight forwarder sends items and gets bill of lading signed by carrier
  • Freight forwarder sends documents to sellers bank
  • Bank sends them to buyers bank
  • Buyer pays or accepts and gets the documents
  • Buyer gives documents to a carrier and gets merchandise
  • Buyers bank sends the money to the seller

Risk is mostly on the seller side.

Wrapping Up

When dealing with unknown sellers and bigger amounts of money, play it safe. Propose a deal through escrow or letter of credit for the first time. These methods may be more detailed and take a longer time to complete, but you would rather be safe than sorry. If the exporter explicitly denies these two payment methods, you should sound an alarm.

These options are safe for buyer as well as the seller and your business partner should tell you a pretty good reason why he doesn’t want to use it. It is more expensive than a bank transfer or other methods, but you would rather pay a little bit more and assure a secure transaction when dealing with large quantities.

Purchasing personal items or services in smaller quantities can be done with almost any of the above payment options. Transferring money this way is normal in these instances, as long as you at least verify whom you are sending money to. Just always stay clear of money wiring services and p2p transfers unless you are sending money to someone you really know.

Share it
Notify of

Inline Feedbacks
View all comments