You can make payments in many ways online. From deciding how to pay when you’re shopping online, to paying bills by Direct Debit and setting up standing orders. You can also send money between bank accounts, making it easier to pay your friends and family, and settle any bills.

In this lesson, we’ll help you to find ways to pay that suit your needs. This starts with a look at the different ways to pay online. We’ll show you how to do this through online banking. You’ll also explore the ‘checkout’ options when you’re shopping online.

The aim of this lesson is to help you get started with making payments online. If you’d like to know more about money management, you can access our lessons on banking basicsbudgeting basics and borrowing essentials.


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

Read time:

15 mins

Chapter 1

Introduction to online payments

Read time:

3 mins

Ways to pay

There are two main ways to make payments online. Those you pay to the account of a person or business, and those you pay to an online shop of some kind. Let’s look at each of these now.


Paying account to account

The main ways to pay ‘account to account’ are through Direct Debits, standing orders and one-time payments. These payments go from your bank account into the bank account of an individual or a business. You can set up and make these payments in branch or over the phone, but it’s much quicker and easier to do them online.


These are the options - select each one to learn more.

  • These are regular payments set up by an organisation you've agreed to pay. For example, when you pay for utility bills such as gas, electric or water.

    Setting up a Direct Debit gives a company or person approval to collect money from your bank on an agreed date. If there are any changes to the amount or payment date, the company must tell you as part of the Direct Debit Guarantee. The person or organisation taking the money will set these up.

    Once set up, the money will come out on a regular basis.

  • These are regular payments that you set up. For example, if you wanted to transfer a set amount to a savings account every month.

    To set up a standing order, you need to know who you're paying, when you're paying them and how much to pay. You'll need their account details. All of this is usually agreed before you set up the standing order between you and the company / person you're paying.

  • Unlike the other two, these aren't regular payments. You set them up (like a standing order) but they are one-off payments. You'd use this to pay friends, family or companies when you just need to pay them once or on occasion. You enter the same kind of information, like account details and payment amount. Once you've set up someone as a payee (a person you pay), it saves their details. This makes it easier to pay them in future. Before you pay anyone, always double check their account details. Especially if it's a while since you last paid them.

Always check the details of your payments before you send money

Shopping and paying online

When you shop online, you’ll need to make online payments. You can do this in various ways. For example, debit / credit card or payment services like PayPal or Apple Pay. Some payment services ask you to pay the total amount up-front. Others let you take out a credit agreement and pay in regular instalments. These ‘buy now, pay later’ services are good if you need flexibility. But they may charge you interest, making it more expensive in the end.


Getting started

We’ve described the two main ways you can pay online. In the next two chapters, we’ll help you feel more comfortable with these and to work out which type suits your needs the best. Let’s start with account to account payments through online banking.

Chapter 2

Online banking payments

Read time:

5 mins

Using Direct Debits online

As we said before, it’s the person or company you’re paying who sets up Direct Debits. So there’s not much for you to manage. You do need to check the details are correct when your Direct Debits are set up. This helps to stop you from being overcharged or any payments becoming overdue.


Always check you have enough money in your account

It's important you make sure you have enough money in your account to pay your Direct Debits. Not enough money means you may have to pay a fee for missing a payment. The best way to check this is using your online banking services. If you haven’t set these up already, go to our lesson Banking online.

Depending on the device you’re using, you should be able to see a button or link called ‘upcoming payments’ or ‘scheduled payments’. Here, you’ll be able to see a list of your Direct Debits and standing orders. Use this menu to check when they’re due and if they’re set up correctly. If they aren’t, you can contact the company or person and ask them to change it.

Viewing your upcoming payments online can help you check you have enough in your account to cover them, 

Using standing orders online

Unlike Direct Debits, you set up standing orders. This means there’s a few extra steps for you to do, to manage them online. The first thing you’ll need to do on most banking services is set up the person you want to pay as a ‘payee’. Here’s how.


1. Go to ‘Pay and transfer’ section

Most banking services have a ‘pay and transfer’ section. Look for this wording, or something similar.


2. Add or create new payee

In the pay and transfer menu, there’s usually a button or link that says ‘Add new person’ or ‘Create new payee’. When you use this, you’ll be able to fill in the personal details for the individual or business.


You’ll need their:

  • Name
  • Account number
  • Sort code

Always make sure the person you’re paying is who they say they are - and that the goods / services are real.

3. Double check the details

Always double check the details you enter are correct or you could end up sending the payment to the wrong account. Some banks now have a step where they check these details match what they have on file.

For example, say you want to pay John Smith with account number 01234567 and sort code 00-00-00. If the bank has a record that shows this account belongs to James Wright, they might ask you to double check you’ve got the right details.

If the details don’t match, it could be a scam. This is someone pretending to be a person or business so they can steal your money. Making sure these details are correct is just one way to make sure your payments are safe. To learn more about staying safe online, you can take our lessons on Get started online.


4. Set the amount and payment date

Next, you’ll need to set the amount and date when you want the payment to go out. For example, the first day of the month. You’ll also need to say how often the payment needs to be made such as weekly, fortnightly, monthly.


5. Add a reference

A reference shows what appears on your statement and the statement of the payee. It might be something like ‘holiday deposit’. Some companies ask you to put something specific as the reference, to help identify the payment when it comes into their account.


6. Confirm standing order

Once you’re sure all the details are correct, you can confirm and finish setting up the standing order. Some banks ask you to re-enter your password at this point. Or they might want you to go through an extra layer of security, just to make sure it’s you.


Using one-time payments

When you set up a one-time payment, it’s a bit like setting up a standing order. You need fewer details here, though. Plus, the payment usually goes through there and then. Once you set up or find an existing payee, you can enter how much you want to pay and add a reference. Some banks will also let you schedule the payment for a later date. This is still different to a standing order as the payment is a one-off, it just doesn’t go out instantly.

Once you’ve entered these details, you can double check they’re correct and make the payment. Again, your bank might do some kind of extra security check, to make sure it’s you.

Please also note that all banks have a limit on the amount you can pay at once, or in a set period of time. For example, no more than £10,000 in one payment or no more than £10,000 in one day.

Use companies you trust and make sure the sites and information you use are reputable.

Chapter 3

Other online payments

Read time:

7 mins

Paying online

In this chapter, we’ll go through some of the payment options you might come across while shopping and making payments online. We can’t tell you the ‘best’ way to pay as this will depend on your own needs. What we can do is show you some features, benefits and things to consider. So when you make your choice, you’ll feel more able to make it the right one for you.


What to expect

When you shop for goods and services online, you need to ‘check out’. This is like checking out in a physical shop, but it happens on the website or in the app you’re using. In this next section, we’ll cover the payment part of checking out. If you want to know more about shopping online or checking out, see our lesson on Shopping online.

When you get to the point of payment, you’ll usually get a range of payment options. This will depend on the website or company. A common type of payment is using a debit or credit card, so we’re going to start here first.


Credit and debit cards

Debit and credit cards are common ways to pay, both in store and online. But what’s the difference between them?


Debit cards

These allow you to move money electronically from your bank account to the account of the business or person you’re buying from. This spend will show up almost instantly on your online banking spending. It may take a day or two to leave your account.


Credit cards

With a credit card, you’re not taking money straight from your account. Instead, you use money borrowed from your provider. This could be a bank, a credit card company or a credit lender. You then pay the provider back later. They may charge you interest for borrowing this money. They make this clear when you apply for the card. You usually have a limit on how much you can spend, and a set amount to be paid back in a given period of time.

To pay using these cards, you’ll need to enter some details on the website or app you’re using. These are usually your name (as it appears on the card), card number and your card security code. You might know this as a ‘CVV’ code. It’s the three numbers on the back of your card, next to the signature strip.

Once you’ve entered your details, make sure everything is right, before you press ‘pay’. Your bank may do an extra security check at that point, so just follow the instructions on screen. When your payment is complete, you can check your bank account to make sure the details are there.


Check the website is safe before you enter any of your card details

Payment services

Another way you can pay is through payment services such as PayPal, Google Pay or Apple Pay. These 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. Instead, the payment service will open in a new window where you can log in and make the payment from a pre-made account.

There are lots of other benefits, features and things to consider. It all depends on which service you go for. Let’s look at a few examples now.



Once you’ve set up an account with PayPal, it’s there for you to pay other people and shop online. You can add money and cards into your PayPal account. Plus, if you do accidentally pay money to a fraudster, PayPal helps you get back the money you’ve 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 that lets you pay online. It has lots of extra features like letting you connect to bank accounts and search your emails for receipts. You can add things like boarding passes and tickets ready to use and scan in their app. They also build in extra layers of security.


Apple Pay

For those who use Apple devices, Apple Pay is another option. It works like Google Pay, letting you pay on the go using your device. You can also pre-load your personal and payment details. So when you check out on your device, you can use quick security locks like fingerprint and face scan. It has lots of layers of security too, so you can keep your card details private from the shops you’re buying from.


Amazon Pay

Amazon pay works through an Amazon account. It lets you pay online shops using the details you’ve saved in your Amazon account. This means you can pay by debit or credit card. Plus, you don’t have to remember a new password if you already have an Amazon account. You can also use Amazon’s voice assistant, Alexa, to order and check the progress of your order using your voice.

These are examples only. We don’t endorse these services and you should do your own research into your options.

Buy now, pay later options

Some services let you buy now and pay later using credit. When you pay this way, you’re borrowing money from the provider and agreeing to pay them back later. Most of them offer the credit interest-free, but you should check for any interest or late payment fees that could cause you issues later. Always make sure you’ll have enough money to pay for the goods. If used in the right way, these services let you spread the cost of larger purchases over a longer period of time.

Using credit services can often affect your credit score. So, you should always read about the services in full before you consider using one of these.


Commonly used credit services include:

  • Klarna – Online or with their app, you can take out credit in different ways, such as pay in 30 days or in three instalments. Make sure you read more about the different ways to pay, and that you understand what you’re agreeing to
  • Clearpay – Clearpay offer buy now, pay later services. Usually they let you pay over a 6-week period
  • PayPal – As one of their services, PayPal offer buy now, pay later. You can split your payment into three monthly payments


Be sure to make repayments on time to avoid late fees or damaging your credit score. It’s also important to keep track of the agreements you have, and which companies they’re with.

Test your knowledge

Answer this question by selecting one answer from the three options provided.

That's not quite right!

Remember, your PIN and password should never be shared with anyone, and you don’t need them to make an online payment.

That's right!

You enter the details written on your debit or credit card to buy something online.

Lesson complete!

Well done! You’ve finished this lesson on making online payments. You should now feel better able to pick ways to pay that suit your needs. Remember, these are all just examples and things to consider. Always seek out 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 learn how budgeting online can help you to save money by being more aware and in control of your spending. You’ll find out how to budget and about the tools that can make budgeting simpler.

Want to know more about money management? Check out our lessons on banking basicsbudgeting basics and borrowing basics.


Up next for you:

Next lesson: Budgeting online
Back to: Get started online


Bank of Scotland Academy 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. Bank of Scotland does not endorse the services they provide. The information in this module was last updated on 8th November 2023.