Last editedApr 20223 min read
In the early days of the internet, online shoppers were advised to use credit cards for safety. Thankfully, both the stability and security of the internet have vastly improved since then. Now there are several ways to pay without a card if you’re online. Here is a quick guide to the main ones.
If merchants can take payment by credit card, they can also take payment by debit card. If you’re uncomfortable using your regular debit card on the internet, you can use a prepaid debit card. Some of these are use-once cards (such as gift cards). Many, however, can be reloaded for continual use.
Prepaid debit cards can also be useful if you like to shop at international stores. You can buy a prepaid debit card in the merchant’s currency. This can get you a more favourable exchange rate. Using regular debit (and credit) cards at international stores can get expensive due to the fees involved.
Direct debit used to be for recurring payments only. Now, however, it’s increasingly being used simply as one way of paying online without a debit card or credit card. GoCardless offers a direct debit solution, allowing businesses to take payments on time and with reduced costs, while reducing the amount of effort and admin for the customer.
Direct debits can be fully flexible regarding payment amount, frequency, and the number of payments made (with customer authorisation, of course) - and these can be altered at any time through the Direct Debit provider, for example, by logging into the GoCardless dashboard.
Open banking services
While not a payment method itself, Open Banking is a technology that allows smart, fast, and secure financial transactions. Products like Instant Bank Pay from GoCardless allows businesses to request payments from customers without needing a card (and so avoiding the fees that come with the card network).
Customers can authorise transactions quickly, safely and with ease using a simple payer flow, while businesses can receive instant confirmation that funds are on the way once the customer has given authorisation.
In order to pay online using Instant Bank Pay, the business you're paying will simply need to set up and verify a GoCardless account, and begin requesting the payments straight from the online dashboard.
Payment Apps (E-Wallets)
There are now too many payment apps (E-Wallets) to provide a complete list here. The most famous ones are PayPal, Apple Pay and Google Pay.
The basic functionality of these payment apps tends to be similar. You load them with funds from your bank account and/or receive funds from other sources. You then use these funds to make purchases and/or transfer them to your bank account.
These apps differentiate themselves from each other through a combination of marketing, value-add services and charges. PayPal, for example, now supports cryptocurrency. One point to keep in mind, however, is that merchant support for payment apps can be highly variable.
You can buy gift cards in real-world stores and use them for online payment. The downside to this is that these cards are typically sold in standardised amounts (such as £5/£10/£20). This means you may end up needing to top up the funds by another method or leave funds on the card.
If you do end up with funds left on your card, you can usually spend them at the retailer’s real-world store. This allows you to pay any extra by real-world payment methods.
If you have a reward card with a retailer, you can often pay online using your reward points. This can be a convenient way to use them up.
Some merchants accept bank transfers although you may have to ask specifically. Paying online through bank transfer is often slow and cumbersome. You may have to contact the merchant to get their bank details, and you’ll often need a reference, too. You’ll also need to set up the transfer in your own bank.
When you do set up the transfer, it’s vital you enter all the details correctly. It is extremely difficult (and sometimes impossible) to retrieve funds if they are sent to the wrong account. Furthermore, you need to be totally confident in the merchant as there is currently no meaningful payer protection when using bank transfers.
It’s still unusual for merchants to accept cryptocurrency, but some do. Keep in mind, however, that cryptocurrency is essentially digital cash. It is therefore advisable only to use this method of payment if you are totally sure you can trust the other party.
Pay on delivery
It’s sometimes possible to pay for goods on delivery. In fact, it’s actually common practice in sectors such as food delivery.
We can help
If you’re interested in finding out more about how to pay online without a credit card, then get in touch with our financial experts. Find out how GoCardless can help you with ad hoc payments or recurring payments.