You can make payments in many ways online. You can pay for things in online stores using a range of payment methods. You can also send money from bank account to bank account. This means there are a range of ways to pay your friends, family, your bills and more.

Different ways to pay all have their own benefits and features. There's also things you will need to consider. So, the aim of this lesson is to help you to feel better equipped to choose ways to pay that suit your needs. You'll know examples of commonly used services and their features. We'll explore the different kinds of payments you can make through online banking and payment services.


  • Know the main benefits of making payments online.
  • Understand some of the common ways to send money online.
  • Feel more informed on how to choose which services will best suit your needs.

Read time

15 mins

Chapter 1

Chapter 1


Read time

3 mins

Ways to pay

The ways to make payments online can be easily split into two kinds. Those that you pay to another person or business' account and those you pay to an online shop of some kind.


Paying account to account

There are a few main ways you can pay account to account. These are direct debits, standing orders and one-time payments. These payments are made from your bank account and are paid into either the bank account of a person or a business. These payments can be set up or made in branch or over the phone but doing them online can make things quicker and easier.


What these mean:

  • Direct debits - Setting up a direct debit gives a company or person approval to collect money from your bank on an agreed date. This is usually how people pay for utility bills such as gas, electric or water. The company will need to tell you about any changes to the date or amount to be taken as part of the Direct Debit Guarantee. These are set up by the person or organisation taking the money. Once they are set up, the money will come out on a regular schedule as set up
  • Standing orders - These payments are set up by you. They work in a similar way, as you would set up a payment amount and date and a person or company to pay. This will usually be agreed before you set up the standing order between you and the company you are paying. You will need to be given or ask for the account details of the person you want to pay
  • One-time payments - Unlike the other two, these are not regular payments. They are set up by you, like a standing order, but they are one off payments. You would use this to pay friends, family, companies when you just need to pay them once or on occasion. You would enter similar details - account details and payment amount. Once you've set someone up as a payee (a person you can pay), it will be easier to pay them in future. You'll be able to find their name in your list of payees and create a new payment. It is always worth checking with the person that their account details haven't changed if it has been a while since you last paid them

Shopping and paying online

When you shop online, you will need to make online payments. These can be done in a variety of ways.

You can pay by card - credit and debit. You can also pay through a variety of payment services. Some of these payment services will be for paying all at once. They all have their own unique benefits and features. Other services will allow you to pay in instalments by taking out a credit agreement. These buy now, pay later schemes can come interest free, or you may be charged interest. It may still be the best option for you if you need flexibility of payment date more than getting the absolute best price.


Getting started

You should now have a basic understanding of the two main ways you can pay online. In the next two chapters we'll help you to feel more comfortable with your options. So, you'll be able to know some of the options available to you and feel better equipped to make a choice which will best suit you needs. Let's start with account to account payments through online banking.

Chapter 2

Chapter 2


Read time

5 mins

Using direct debits online

As we said, direct debits are set up by the person or company you are paying. So, there's not much you need to know about how to manage them online. The main thing to note is that it's still important that you check your direct debits to make sure they're set up right.

Perhaps you're being overcharged, or someone has got your account details wrong. This may mean you are unable to pay correctly or will become overdue on some payments. It's important you make sure you have enough money in your account to pay your direct debits or you may be charged a fee by the service provider for missing a payment.

The best way to check this is using your online banking services. If you haven't set these up then you can get started with our lesson on 'banking online'.

Depending on the device you're using, you should be able to see some kind of 'upcoming payments' or 'scheduled payments' link or button. Here you will be able to see all your direct debits and standing orders. So, you can use this menu to click into your direct debits and check they are set up as expected. If they aren't, you can contact the company or person to ask them to change it.

The other benefit of this menu is that it allows you to see when your payments are due so you can make sure you have enough in your account to cover all your upcoming payments.

Using standing orders online

As you now know, you set up the standing orders, so there's an extra few steps for you to learn to be able to manage them online. The first thing you will need to do on most banking services is set up the person you want to pay as a 'payee'. To do this, you will need to have their name, account number and sort code. So, you should prepare these first.

Once you have these details, you are ready to start. Most banking services will have a 'pay and transfer' section. It might not be called this, but it will be something similar. In this menu, there is usually a button or link that will say 'Add new person' or 'Create new payee'. When you click this you will be able to fill in the details you have prepared. You may also be asked what country the account is in.

Always double check that the details you enter are correct or you could end up sending the payment to the wrong account. Some banks will now have a step where they will verify to you whether or not the details you have entered match what they have on file. So, for example, if you were wanting to pay John Smith with the account details 01234567, sort code 00-00-00, but the bank have a record that shows that this bank account belongs to James Wright, then they may say this to you to encourage you to check.

The reason you should check when these details don't match what you expect is in case someone is pretending to be a person or business in order to steal your money. Making sure these details are correct is just one part of making sure you make safe payments. If you want to know more about staying safe online, you can take our lessons on 'Staying safe online'.

You will also need to set an amount and the date you want the payment to go out on - for example, the first day of the month. You will also need to say how regularly the payment needs to be made - weekly, once a month and so on. You will also need to add a reference.

The reference sets how it will appear on your statement and the statement of the payee, so it might be something like 'holiday deposit'. Some companies will ask you to put something specific as the reference to help identify the payment when it comes into their account.

Once you're certain all of these details are correct, you can confirm that and finish setting up the standing order. Some banks will ask you to re-enter your password at this point or go through some kind of extra layer of security to make sure it's you.

Using one-time payments

The process of setting up a one-time payment is similar to setting up a standing order, except you need less details and the payment is usually made there and then. Once you set up or find the payee in your list of payees, you can enter how much you want to pay and add a reference. Some banks will also allow you to schedule the payment for a later date.

This is still different to a standing order, as the payment is still one-off, it just doesn't go out instantly. Once you have entered these details, you can double check they are correct and make the payment. Again, you might be asked to do some kind of extra security check to make sure it's you.

Please also note that all banks will have some kind of limit on the amount you can pay in a one-time payment or in a period of time. For example, they may say no more than £10,000 in one payment or no more than £10,000 in one day.



Always make sure the person you are paying is who they say they are and that the goods and services you are paying for are real. Use trusted companies and make sure the sites and information you use are reputable.

Chapter 3

Chapter 3


Read time

7 mins

Paying online

In this chapter, we'll go through some of the payment options you might come across online while shopping and making payments.

We can't advise you on the 'best' way to pay. The best way to pay is a completely individual choice and you need to decide what best suits you. What we can do is make you aware of some of the common examples of ways to pay and some of the features, benefits and things to consider. So, when it comes to making your choice, you will feel better equipped to make the right one for you and begin making payments online.


What to expect

When you've finished shopping for goods and services online you need to 'checkout'. This is like checking out in real life, but it happens right there on the website or in the app you are using. In this next section, we will be covering the payment aspect of checking out, but if you want to know more about shopping online or checking out, you can take a look at our lesson on 'Shopping online'.

When you get to the point of payment, you will usually be offered a range of payment options. What you are offered will depend on the website, the company and what they are willing to accept as payment. So, often having more than one way to pay set up will ensure you are able to purchase through all online shops. However, having a credit or debit card will usually mean you can buy from almost all shops. Let's take a look at this payment option first.


Credit and debit cards

Debit and credit cards are both commonly used ways to pay, both in store and online.

A debit card allows you to transfer money electronically from your bank account to the account of the business or person you are buying from. This spend will show up almost instantly on your online banking spending. It may take a day or two to actually leave your account.

A credit card is another type of payment card. The difference is that instead of taking money from your account, you are using money borrowed from your provider. This could be a bank, a credit card company or a credit lender. You will then pay the provider back for this at a later date.

You may be charged interest for borrowing this money. This will be made clear when you apply for the card. Your provider will usually give you a limit on how much you can spend and ask for a set amount to be paid back in a given period of time.

To pay using these cards, you will be asked to enter some details on the website or app you are using. These are typically your name (as written on the card), your card number and your card security code. The card security code is the 3 numbers that are typically written on the back of your card next to the signature strip. This is sometimes also known as a CVV.

Once you've entered your details, you can make sure everything is correct before you press purchase. You may then be asked to do an extra security check by your bank, so you should follow the instructions on screen. Once your purchase is made, you can check your bank account to make sure the account you expected has appeared on your account.

Payment services

Another way you can pay is through payment services. These are services set that give you a different way to pay for goods online. They differ from paying by cards, as the payment doesn't happen on the shop's website or app. This means you don't need to enter your payment details on the shop's site. The payment service will instead open in a new window, allowing you to log in and make the payment from a pre-made account.

There are lots of other benefits, features and things to consider. These will differ depending on which service you choose. Let's take a look at a few examples now. These are examples only, for your awareness, we don't endorse these services and you should do your own research into your options.


Examples of commonly used payment services

  • PayPal - Once you've set up an account with PayPal, you can use it to pay other people and to shop online. You can add money into your PayPal account. You can also add your cards. One of the main benefits of PayPal is that if you do accidentally pay your money to a fraudster, they will help you to get back what you have lost. They also give you an extra layer of security by letting you pay through their website, rather than on the shop you're buying from
  • Google Pay - This is a payment service which allows you to pay online. It has lots of additional features like allowing you to connect to bank accounts, search your emails for receipts and add in things like boarding passes and tickets ready to use and scan in their app. They also build in multiple layers of security
  • Apple Pay - For those who use Apple devices, Apple Pay is another alternative. It works similar to Google Pay, allowing you to pay on the go using your device. It also aims to speed up the checkout process online by allowing you to pre-load your personal and payment details. This means you can check out on your device using quick security locks like fingerprint and face scan. Apple Pay also has lots of layers of security that mean you can keep your card details private from the shops you are buying from
  • Amazon Pay - Amazon pay works through an Amazon account and allows you to pay online shops using the details you already have saved in your Amazon account. This means you can pay by debit and credit card. Plus, you don't have to remember a new password if you already have Amazon. Because it works through Amazon, you can also use Amazon's voice assistant, “Alexa” to order and check the progress of your order using your voice

Buy now, pay later options

Some services will offer you the ability to buy now and pay later using credit. When you use this way to pay, you are borrowing money from the provider. You are then agreeing to pay them back later. Most of them will offer the credit interest free, but you should check there is no interest or late payment fees that could cause you an issue later.

You should also make sure you will have enough money to pay for the goods you are buying in this way. If used in the right way, these kinds of services are a way to spread the cost of larger purchases over a longer period of time.

Using credit services can often, but doesn't always, affect your credit score. So, you should always read about the services in full before you consider using one of these buy now, pay later services.


Examples of commonly used credit services:

  • Klarna - Klarna offers an app and services that allow you to buy now and pay later in a range of ways. They have lots of different ways you can take out credit. So, we recommend you read more about the different ways you can pay and make sure you understand what you are agreeing to
  • Clearpay - Clearpay also offer you buy now, pay later services. They focus on paying over the course of a six-week period
  • PayPal - As one of their services, PayPal also offer buy now, pay later. You can split your payment up into three, monthly payments

Something to note:

Something to note:

It is important to make repayments on time to avoid penalty fees and charges, and damaging your credit score, and it is also important to keep track of how many agreements you have (and which companies they are with).

Module complete!

Well done! You have finished this lesson on making online payments. You should now feel more equipped to choose ways to pay that better suit your needs. Remember, you these are all just examples and things to consider, you should always get more information and read about the products before you consider using them.

When you're ready for your next lesson, we suggest you go on to take 'Budgeting online'. It will help you to understand how budgeting online can help you to save money by being more aware and in control of your spending. You'll learn how to budget and about the tools that can make budgeting simpler.


Up next for you:

Next module: Budgeting online

Back to: Managing money online

Scottish Widows Be Money Well is committed to providing information in a way that is accessible and useful for our users. This information, however, is not in any way intended to amount to authority or advice on which reliance should be placed. You should seek professional advice as appropriate and required. Any sites, products or services named in this module are just examples of what's available. Scottish Widows does not endorse the services they provide. The information in this module was last updated on 31st Oct 2022.