What is an online payment service?


Quick Answer

Online payment services allow consumers to pay merchants for goods or services electronically, according to the U.S. Small Business Administration. A payment service provider acts as a middleman between the merchant and consumer in processing the payment through the Internet.

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What is an online payment service?
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Full Answer

Online payments are done through electronic fund transfer from the consumer's bank or credit card account to the merchant's bank account, or through online wallets such as PayPal. Businesses use this as an alternative payment mode to make it more convenient for their customers to buy products from their websites. With an online payment service, businesses can accept payments originating from different states and even internationally.

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