Not so long ago, if you wanted to buy precious metals your only option was to do it through a bank or a specialist bullion dealer. That’s all changed though, and silver and gold can be bought online just like almost everything else. There’s an incredible range of options now available, from buying direct from mints to picking up secondhand bullion on ebay, and if you’re smart and determined you can pick up some real bargains online. Of course if you’re purchasing something as valuable as bullion online you want to be very confident in your payment methods. If you buy from reputable dealers there’s little risk of you being swindled out of your money, but traditional ways of paying, like wire transfers or even mailing a check, can be slow and cumbersome. Most online dealers have worked with credit cards, which can be used to “lock in” the current price at the moment the sale is agreed, but that has its disadvantages too. Luckily there’s a modern alternative that’s easy to use – an e- wallet. The most popular and widely accepted e-wallet in the world is PayPal.
If you’re not familiar with PayPal, the principle behind it is very simple. It literally does act like a wallet; you create an account and transfer money to it, and then use that balance to pay for goods or services online. If you’re concerned about the security of your credit card or bank details when buying online PayPal is ideal; it acts as an air gap between your financial information and the purchaser. As long as their website is PayPal-enabled you can select that as a payment option and authenticate the payment by logging in and authorizing it. The seller never sees the details of your card or bank account – even your PayPal account only reveals your email address. You can pay with the speed of a credit card but none of the security worries. PayPal offers another layer of protection, too. Like a credit card transaction you get protection; if the seller doesn’t ship the goods you can claim your money back from PayPal. This combination of speed and security is making it very popular for most online retail sectors, and precious metal dealers are following the trend. An increasing number now accept PayPal payments, and if you see it offered it’s definitely worth considering.
There is a down side to using PayPal – nothing is perfect. PayPal will never charge you fees to buy with their service, but they are out to make a profit so they don’t provide the service for free. Instead they charge a fee to the seller, usually around 3 or 4 per cent. Many retailers absorb the cost in exchange for the extra convenience, but precious metal dealers don’t. Their margins are already extremely slim and the PayPal fees would wipe out their profits, so you’ll generally have to pay a premium of about 4 per cent to use PayPal. On a big transaction that could be enough to sway you away from the idea, although of course some dealers also charge a handling fee for credit cards so it may even out. If you’re buying online and you have the option of using PayPal it’s definitely worth considering. In terms of speed, ease of use and security it’s unbeatable; if that makes up for the additional fee you really can’t go wrong. Expect it to become a much more common option for precious metal trades in the future.
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