E-Commerce

FINANCIAL MEDIUMS FOR ONLINE BUSINESSES

Introduction

The first step you take if you want to be an expert in online businesses is to have a way of buying, selling and transferring your online profit to your local bank. For a long time, this has been restricted to countries in certain parts of the world especially in the US and Europe. Many countries in Asia and Africa could for sometime not participate in global online business due to a lack of financial medium that favoured them.

With advance in technology, many platforms have come up targeting small online and large scale traders from all over the globe; the most popular of these technologies are use of credit cards and debit cards; advancement in technology has also  increase the risk of using credit cards online leading to an intervention of third parties in handling online transactions.

In the past years, there have been a number of creative online technologies that have been developed to curb an upcoming and deep rooted culture of online fraud. These technologies aim to at closing the security gap between the card payment system, the SSL technologies and the online merchant’s websites. This chapter explains how you can use some of these technologies in your online system to increase the security of your online transactions and to gain the confidence of your customers.

  1. Email Transactions

There are many online systems that use email to transact but this document will be limited to the PayPal system as these systems work in the same way. With PayPal, you create an account using an email and personal details and link a credit or a debit card to your account as the source of funds for all your online transactions. After successful verification of your account details, you get an opportunity to transact online using just an email address while PayPal protects your card and personal information otherwise exposed when using the card directly online. This system however has limited functionality based on the country you come from; some countries can use all PayPal features such as sending money, receiving money, withdrawing to a local bank, to a US bank or to a credit card and also to create Buy Now, Donate and Subscribe buttons for your website to be able to sell online. PayPal has restricted many countries from using some of these features and these countries have to rely on additional methods to be able to use all the features.

PayPal has the following benefits that make it more preferred over other systems;

  • Ability to receive Payments by Email (You don’t revealing your credit card details when selling or buying online)
  • Accepting Credit Cards on Your website
  • Selling Internationally through EBay, your website and other online websites.
  • Access to the world biggest online financial system, much bigger than most local and international banks.
  • Advantage of Buyer and Seller protection policies against fraud or non-compliance with specifications.
  • If you are selling a genuine product, buyers will not fear as PayPal is a highly trusted platform for online services. It is used by EBay and other popular online businesses.

Creating a Verified PayPal Account

When you create a PayPal account, the account is limited to transactions of about $500 only and for you to make unlimited transactions as is the case with any business, You have to verify that account by;

1.        Linking it with a Credit card or Debits (ATM card) (One time free set-up)

2.        Linking it with a bank account if you have any bank in a country where PayPal has partnered with local banks

3.        Linking it to a US Bank Account

You can create a PayPal account at PayPal’s website: www.paypal.com.

The first two methods are straightforward but the third method is not easy because it is not easy to open a bank account in the United States unless you are either a citizen or a resident with all the documents needed by US banks. Below is a list of three ways in which you can open a US bank account.  The third method is not only legal but is also safer, acceptable by PayPal and is free until you start transacting. The following is a description of each of the methods;

  1. NetSpend or Account Now Accounts (Prepaid Card and Bank Account – US-Residents Only)

You can create a checking account from Meta Bank which is one of the leading banks in the United States. This account is created via Meta bank agents called Net spend and you will not required to have anything during registration, all you need is your street address.

You can also register for  AccountNow Prepaid Visa Card which is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. and can be used everywhere Visa debit cards are accepted. The Bancorp Bank is a Member FDIC and this card also comes with a bank account.

  • Requirements

If you have a friend in the US you can partner to do online business if you feel that you have the potential but a bank account is restricting you. This means they open the prepaid account with their Name, Address, Social Security details and any other information needed to complete the verification of the account; and they lease the account to you at a monthly or yearly charge.

The step will involve them creating prepaid account online and then the Card is sent to them after which they can send it you, which is a complex process that requires an agreement between the two of you on the terms; you will use their details to do your online business based on the agreed terms which should be legal and ethical undertakings and you have to comply with US tax laws making this method quite expensive.

It is also difficult to get someone willing to do this due to tax implications and money laundering laws, but if you think you can get someone, you can use this option.

Websites:http://www.netspend.com or http://www.accountnow.com/

Please do not register if you do not have all details correct, it is unethical and illegal and will be a waste of your time, instead try any of the two other methods given below.

2. Apply for Citibank Account from your country and request a Branch in the USA

This method is very expensive and requires a minimum deposit of about $10,000/= and the account will incur monthly charges, Serious businesses can however afford this so it is also a valid option to think about.

3. Create Online USA Bank Account

This is the only viable method for people around the world who trust PayPal and who want to have access to all PayPal services; it is also the easiest, most legit and convenient.

With this method;

  • You will get an International MasterCard to use in any ATM worldwide.
  • You will get a Virtual US Bank account
  • The Bank Account and MasterCard are very legitimate and accepted ways to verify a PayPal Account and to withdraw from PayPal account in any country worldwide.
  • You can transact online either with PayPal, the MasterCard or the virtual Us Bank account.
  • You can withdraw your online earnings up to a maximum of $1,000 per day from any ATM that Accept MasterCard credit cards worldwide.
  • You can do virtually any legal business as you are guaranteed that you will receive and withdraw the money; E.g. EBay, PayPal, Amazon etc.
  • You receive your card within a month after your account is approved, if you are near USA this might take less time, you can organise to receive the card by DHL, FEDEX or any other preferred method.
  • STEPS

    Payoneer’s US Payment Service is a premium service that allows users to receive direct deposit payments from US and some other online companies directly to their Payoneer Prepaid Debit MasterCard® Card, using the ACH network.

    i.        Register for Payoneer Account

    o   You need a National ID or Passport

    o   Your Home Address

    o   A Shipping address where your card will be shipped to

    ii.        Wait for approval (Approval Rate is 90%)

    iii.        After approval, your Bank details will be visible but not usable

    iv.        Wait for your card to arrive

    v.        After it arrives, verify your account to activate your bank account and your card and you will be done.

    vi.        Connect your card to PayPal and then transfer to your Payoneer card every time you want to withdraw.

    http://www.payoneer.com/

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