An online payment service enables a buyer to use a credit card or electronic bank transfer to pay for a purchase from a seller who otherwise would not be able to accept such transactions.

Some online payment services, such as PayPal, offer convenient means for transferring money from buyer to seller. They also offer degrees of protection on both ends of a transaction. For a small monthly fee, Microsoft's MSN Bill Pay lets a user pay recurring bills and send one-time payments to virtually anyone with a street address. Unfortunately, some online payment services provide little more than links to services that send money orders. Some online services have stopped supporting buyer-to-seller transactions altogether. Instead, they have settled on being online bill-paying services that collect a fee for helping you manage monthly payments, such as car payments, mortgage payments, utility payments, and credit card bills.

Not surprisingly, cyber-thieves have also set up a few online payment “services” that did little more than gather unsuspecting victims' personal and financial information.

Research an online payment service very carefully before using it.