by Lloyd A. de Vries

If you're going to buy and sell stamps and covers over the Internet — and more and more of us are — then you have to figure out a way to pay for them or accept payment.

Of course, you can buy and sell, and then use checks, money orders or even cash by regular mail. Many philatelists still do that. It's not so much that it's a safer method of payment, because thieves can still intercept mail and steal the contents. (This is particularly true if the envelope is addressed to or coming from "Acme Stamp Co." or something that indicates there might be something valuable inside.)

Also, many sellers don't want to wait for payment. If the transaction crosses an international border, not only can receipt of the check take quite some time, but converting the currency (your check written in U.S. dollars into euros) can be expensive.

So some online sellers specify an electronic transaction or don't bother to buy.

Serious dealers with sufficient volume may accept credit cards. Banks and their intermediaries (called service bureaus) may require certain credentials before giving a credit card acceptance account to a merchant, such as enough sales, a physical location (rather than just a Web site), and a number of years in business.

Then there's PayPal, which has become ubiquitous for online sale. It doesn't require a track record as a merchant, a brick-and-mortar location (the online term for a physical presence) or even a minimum amount of sales.

What PayPal accounts do require is a bank account, from which the account holder can withdraw funds or deposit them. Of course, most banks issuing merchant credit card accounts also expect the merchants to have business banking accounts at the institution.

There are two types of PayPal accounts: Personal and Premium/Business. (There are differences between PayPal Premium and Business accounts, but they're minor.)

Personal and Premium/Business accounts both work the same way for buyers: You either click on a merchant-supplied link to pay for the item via PayPal, or you log onto the Pay Pal Web site and direct the service to pay a merchant.

The major differences are when the account holders are sellers. Personal accounts receive money without paying any fees to PayPal, but can only receive money from other PayPal accounts. Premium/Business accounts can accept credit card payments — PayPal is acting as a service bureau — but pay a fee to PayPal every time money is received.

On the other hand, PayPal is also paying interest on balances in its Premium/Business accounts, about 4.5 percent. That's well above what most banks are paying for even passbook savings accounts.

If you have a Premium/Business account, you can also get a debit Master Card linked to your PayPal account. Rather than transfer money from PayPal into your linked bank account, you can use the card to make purchases or as an ATM card to withdraw the money as cash. If you make purchases using the card as a credit card, you even get a 1% rebate on your purchase.

However, I've found that some large-chain retail stores now automatically can tell you're using a debit card, and process the transaction that way. That includes the U.S. Postal Service. Debit card transactions cost them less, and take away your PayPal rebate. Oh, well

If you use it at an ATM, you'll pay a small fee to PayPal (I think it's $1) and whatever fee the ATM owner imposes.

I haven't had any problems in the six or seven years I've had a PayPal account, but I have heard horror stories from dealers about how PayPal handles chargebacks (when the seller complains that the merchandise was shoddy or not delivered, and gets a refund). As with most credit card servicing agreements, PayPal presumes the customer is always right, and the burden of proof is on the seller, so when there's a dispute, the money is deducted from the seller's PayPal account.

What happens if there's not enough money in the PayPal account to cover the chargeback? Let's say you sell a stamp for $100, and decide to buy something with the PayPal debit card for $75. The next day, your buyer complains there's a tear in the stamp and demands a refund. PayPal tries to deduct $100 from your account, but there's not enough there.

So PayPal pulls the other $75 from your linked bank account. You authorized that; it's in the user agreement.

That's unsettling enough, but if there's not enough money in that bank account, or it doesn't leave enough money to cover a check you've written, you're going to get hit with overdraft fees and other unpleasantness.

Again, this hasn't happened to me, or other sellers I know well, and I don't hear these tales of woe very often. Most stamp collector customers will contact you about a problem before yelling to PayPal.

There's also a safeguard for this: Don't keep a lot of money in the linked account. Mine is a personal checking account, which I use to deposit checks written to me personally, rather than one of my businesses. It rarely has more than $25 in it, because I move anything more into my business checking account. (I can do that online, for free, through my bank's online banking.)

I've expressed amazement in this column before that no one is challenging PayPal for what the industry calls online "micropayments." I expected that from one of the Internet banks, like Orange, or one of the major banking conglomerates.

Instead, Google has started a different type of online payment service, called Google Checkout. It's new, and I'm still learning about it, but users don't have balances online. Instead, buyers pay via credit card, and Checkout sends the money (minus fees) to the registered merchant.

Most of these online methods send the data to the company (the credit card service bureau, PayPal, Checkout, etc.) in an encrypted form. For maximum personal security for your financial data, look at the Web site's URL (address): If the address starts with "https://" that means it's a secure site that uses encryption. If the address starts with plain old "http://" (no "S"), then it's not.

But I've sent my credit card number to sellers in unencrypted e-mail messages, and so far — knock wood! — haven't had a problem.

Back before the Internet, someone could intercept your hard-copy mail, learn your bank account number, go to a distant branch where you weren't known, and try to withdraw money from your account. Sometimes they succeeded. They still can. Every week, there are news stories about bank officers, attorneys and relatives who embezzle from bank accounts.

I think a bigger risk isn't in the transmission of your financial data; it's what someone does with it once it's received, just as with non-electronic finance.

This article was written at 36,000 feet on the way to AmeriStamp Expo. You can contact Lloyd at stamps@pobox.com — when he's on the ground.