The many ways that eBayers exchange cash

eBay auction listings can demand payment in a dizzying variety of forms, but not all payment systems are created equal. As a buyer, you should know what each type of payment means for you. As a seller, you should be aware of the ways in which buyers will see such terms.

The single most important fact to understand about auction payments is that credit cards, whether through PayPal or through some other clearing agent, are the ideal way to buy and sell online. Many consumers have an innate fear of credit cards as "less safe" than checks or money orders, but for several reasons, credit cards are much safer today than other options:

?Buyer protection. All of the major credit cards offer buyer protection in some form or another.

If you do not receive an item for which you've paid, or you're not satisfied with a purchase, you can "dispute" the charge by contacting your credit card company and having the payment reversed. Checks and money orders do not offer this protection.

?Seller protection. Unlike printed checks or money orders, credit card payments provide a basic guarantee that funds are actually present. Once you have authorized a charge, whether through PayPal or some other agent, you can reasonably expect to receive payment if you deliver the goods.

?The emergence of e-checks. The relative safety of checks as a "printed and signed only" form of payment has disappeared. These days nearly every major bank will accept "e-checks" drawn against a customer's account. For such a check, no signature or printed material is required?just a bank account number and routing number, both of which appear on a check. And e-checks do not offer buyer and fraud protection like credit cards do?all responsibility in the case of e-checks rests with the buyer, caveat emptor.

For these reasons, a general guideline is to buy with a credit card whenever possible. To put this guideline into practice, however, it's helpful to understand some of the jargon associated with payments in eBay auctions. Read on for a rough guide

What to look for and what to avoid

You should understand the following payment terms and what each means for buyer and seller before you bid on an auction:

?PayPal payments. PayPal payments are the most commonly accepted form of payment in use on eBay. PayPal is reasonably safe and secure for both buyers and sellers, and PayPal itself is an eBay company. From the buyer's perspective, when a seller accepts PayPal you will be able to:

oPay using your credit card, with associated benefits

oPay using your debit card

oPay using your checking account, with associated risks

oPay using PayPal funds from your own auction sales

?Check or money order payments. Some sellers accept payment via printed check or money order. Before you pay this way, there are several things to take into account or be aware of:

oChecks and money orders make for slower trades, since it can take days for your payment to arrive and many sellers wait for clearance before shipping

oWhen you send a check, you have also sent the seller your bank account details

oWhen a money order is lost, it is like losing cash?you have no recourse

oChecks and money orders offer the buyer no additional protection or warranty

oMailing addresses should always be double-checked through email communication before payment is sent

?Credit card payments. A few sellers, usually larger volume sellers or power sellers, accept credit cards through a service other than PayPal, often their own website.

While with this type of payment you gain all of the advantages of credit card shopping (most notably consumer protection), there are additional risks to be aware of:

oThe seller now has your credit card number, expiration date, and name?details they would not receive with a PayPal credit card payment

oPay sites other than PayPal may be of unknown size and security?you are depending on the seller or his or her payment agent to protect your credit card information from hackers

?Wire transfers and "Western Union." Never wire money to anyone. Though this makes international payment somewhat more complicated in some cases, it's an important rule of thumb that has emerged in recent years, since a high percentage of fraudulent auctions request wire transfers and a very small percentage of legitimate ones do. If you wire money and receive no item, you have no recourse, and wire transfers are often nearly impossible to trace, especially when they have gone overseas.

?C2It, Bid Pay, and CheckFree. These common "PayPal alternatives" have at varying times been popular on eBay, but you should beware: all have recently also become common ruses used by scammers. Both C2It and BidPay have ceased operations'if you see an auction listing demanding payment using these services, do not bid. CheckFree continues to operate, but eBay auctions are not its main source of business and many eBay listings that claim to accept payment using CheckFree (or similar names) are merely interested in having you supply your bank account details for an "e-check" so that a scammer can drain your account.

A concise summary of these points might read like this: pay by PayPal using a credit card when you can, otherwise pay the seller directly via credit card if you're able, and as a last resort send a check or money order. In all cases, be careful'it is your job as a buyer to evaluate listings carefully and to be mindful of seller feedback.