Solutions to money transfer problems (Tips for Buying and Selling at Auctions)

Member Name: nimue

Product:	Tips for Buying and Selling at Auctions
Date:	08/05/01 (379 review reads)
Rating:

Advantages: beat the banks

Disadvantages: some fees still apply

Part of the attraction of Internet auction sites is the ease with which it is possible to buy and sell internationally. However, you can run into problems when you get to the stage of sending or receiving money for the goods. Technically, in these hi-tech days, the transfer of funds should be rapid and uncomplicated. Unfortunately, the reality is far from different. For example, there are problems with the acceptability of credit cards - for example, many US companies will not accept cards with an address outside the US, because they maintain there is too great a risk of fraud. Also, private individuals are not usually able to accept credit card payments. Secondly, most British banks cannot wait to rip off people who want to transfer or receive money internationally. Sometimes, the charge the bank wishes to impose can be more than the actual sum being transferred.

I regularly use one of the following solutions to get round the problem:

1. Paypal.com - Paypal is a scheme which permits payments between individuals with a credit card and/or bank account. It is available to a number of countries, including the UK. You pay money into your Paypal account using your credit card, and that money can then be transferred to somebody else's Paypal account. In the same way, you can receive payments into your Paypal account.
When you set up an account at the Paypal site, you can choose for it to be personal, premier or business. Payments in and out of personal accounts are free, however, there are restrictions on how much money can be received in any one payment and also over any one month. Premier (for individuals) and business accounts have a charge of 3% for money received, however, no limits are set on how much money goes into them. You can keep money in your account to be used when you need to pay someone. Alternatively, you can request it to be paid into a UK bank account for a further fee of £1.50. Paypal is one of the most common me
thods of payment on Ebay. I have used it both to pay and to receive payment, and have not had any problems with it.

2. Bidpay.com - My first purchase on Ebay led me straight into trouble because the seller would not accept credit card payments either directly or through PayPal. The only options open to someone from the UK were to send cash or a money order to the US. I was not happy about sending dollar bills in an envelope. The cost of a money order from my friendly high street bank was £15 - absurd since my total purchase came to about £12. I was despairing until I found out about the BidPay service. Basically, you register with the BidPay site and instruct them to send a Western Union money order to any address in the United States. The fee for this is $5 (about £3). I found the registration process painless. Within minutes, I received confirmation of my registration. At the same time, a message was sent to my US seller informing them that a money order would be sent. In the case of auction sales, BidPay visit the auction site to verify the buyer's and seller's details. Once a money order has been sent, it is possible to track its progress through Western Union's on-line tracking system. Although the fee is slightly high, it still makes most smaller purchases manageable. I cannot express how relieved I am to have found this service!

Bank accounts - Most UK banks charge about £5-8 if you wish to pay in a cheque denominated in a foreign currency. This can be a very high percentage of the typically small prices that occur on Internet auction sites. One way to get around this problem is to open a current account in the foreign currency that you are most likely to be using, eg US$. You are then able to pay in dollar cheques at no cost, and also write out dollar cheques if you wish to purchase anything in dollars. The interest rates on these accounts tend to mirror US interest rates. At the time I was looking into these matters,
the rates were more favourable than standard rates on UK£ current accounts. However, the downside was that most of the dollar accounts required an initial investment of at least £2000 ($3000), and in many cases required this sum to be kept in the account at all times as a minimum balance. Most of us do not happen to have a couple of thousand to lock away like that against the offchance of making a $20 or so sale or purchase at Internet auction sites once in a while. Finally, I found the solution staring me in the face. My own bank, First Direct, appears to be unique in that it charges a £5 fee not per cheque, but for any number of cheques that you pay in at any one time, up to a maximum value of £250. I tend to receive a number of small dollar cheques on a fairly regular basis, so I wait a month or two until I have a few cheques to pay in together.

I have found that using a combination of these three methods, I have been able to buy and sell on Ebay.com as well as on Ebay.co.uk, and also cash in fairly small dollar earnings from pay-for-answer expert sites, without losing too much money to the ever-hungry coffers of the British banking system.

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