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Chapter 15. Payment Systems > Peer-to-Peer Payment Systems

Peer-to-Peer Payment Systems

As the Internet settled down to credit card payments as the primary payment mechanism for e-commerce, it also became apparent that individuals wanted to be able to pay each other online. This is most visible for auction sites, such as eBay, that promote transactions between individuals, not just businesses. However, individuals can't take credit cards, and there is no widespread alternative on the Internet.

To solve this problem, companies like PayPal, Yahoo, and others have created so-called peer-to-peer payment systems. In these systems, individuals can instruct the service to send payments to anyone with an e-mail address. The individual pays the service with a credit card or direct debit from a bank account. The recipient receives instructions for retrieving the payment, and the service provider collects a small fee.


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