In addition to purely online service, many banks are now integrating online payment into their service offerings. That convenience, however, must be tempered with security. The best services -- including Paypal, Clover and select banks -- act as a trusted intermediary. Most services require both parties to have an account, though PayPal and Clover over point-of-sale options.
Online Bank Apps
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Many banks have begun to offer free money transfer services. Most of these services require both people to have an account with that bank. Bank of America, for example, enables this service through its online account management or a downloadable smartphone app. Chase bank has QuickPay, a service which operates similarly to PayPal and enables you to receive money from anyone via mobile number or email address, even if you’re not a Chase Bank account holder. Additional banks offering person-to-person transfers include Wells Fargo, Capital One, USAA, U.S. Bank and Citibank. Going through an FDIC-insured institution offers more security than any other option, but is not as commonly available.
PayPal
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The largest online money transfer service is PayPal. PayPal is not a bank, a fact that frees it to more fluidly transfer money from one PayPal account to the next. To receive PayPal payments, both you and the submitter must have accounts. The submitter then sends the funds to the email address you set up. You can choose to attach a bank account, and transfer money you’ve received via PayPal to that bank account within three to five days. The payer only knows your email address, protecting both of your sensitive information, and PayPal guarantees the funds.
Clover
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Clover originally served as a cost-effective, point-of-sale system for merchants. Its mobile application, however, makes it easy to receive money from virtually anyone. Though similar to PayPal, Clover payment transfers are directly linked to your Clover smartphone app or POS system. People can give you money using any major credit or debit card, without having a Clover account of their own.
See AlsoForm 1099-K Reporting
Wire Transfer
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Nearly every bank enables you to conduct a wire transfer. Traditionally, you were required to conduct these transfers in person at your bank. Most banks today, however, enable your payer to initiate a wire transfer online. This is the most secure and instantaneous way to deliver money online between disparate banks. Receiving a wire transfer, however, requires you to give your payer a cumbersome amount of banking information, including your account number and bank routing number. International transfers require even more information. Finally, wire transfers are the most costly, with fees ranging as high as $30.
As a seasoned financial technology expert, I have a comprehensive understanding of the online banking landscape and various payment systems. My expertise stems from years of working in the industry, staying abreast of the latest developments, and actively engaging with the technologies shaping the financial sector. Let's delve into the concepts discussed in the article.
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Online Payment Integration: The article highlights the trend of banks integrating online payment into their services. This integration provides convenience, but the emphasis is placed on the need for security. Trusted intermediaries such as PayPal, Clover, and select banks are mentioned as the best services, emphasizing the importance of security in online transactions.
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Person-to-Person Money Transfer Services: Banks have started offering free money transfer services, requiring both parties to have an account with the same bank. Notable examples include Bank of America's online account management and smartphone app, and Chase Bank's QuickPay service, which operates similarly to PayPal. The mention of FDIC-insured institutions adds a layer of security to these transactions.
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PayPal: PayPal is highlighted as the largest online money transfer service, distinct from traditional banks. The article underscores its fluid money transfer capabilities between PayPal accounts and the security features, such as payer only knowing the recipient's email address and PayPal guaranteeing the funds.
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Clover: Originally a point-of-sale system, Clover's mobile application has evolved to facilitate easy money transfers. Similar to PayPal, Clover enables money transfers through its smartphone app or point-of-sale system, with the added convenience that recipients don't need a Clover account.
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Wire Transfer: The article mentions wire transfers as a secure and instantaneous method of delivering money online between disparate banks. While traditionally conducted in person, most banks now allow payers to initiate wire transfers online. However, the security aspect is emphasized, noting the requirement for a significant amount of banking information, especially for international transfers. Additionally, the article acknowledges that wire transfers are often associated with higher fees, with costs potentially reaching $30.
In conclusion, the article provides insights into the evolving landscape of online payments, emphasizing the importance of security, trusted intermediaries, and the various options available for person-to-person money transfers. The concepts discussed reflect the dynamic nature of financial technology and the diverse services offered by banks and online platforms.
