A) 2. Methods Of Payment Flashcards

1
Q

Cash

A

Notes and Coin

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2
Q

Debit card

A

Issued by banks with payments for G+s’s being deducted directly from currant account.

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3
Q

Credit card

A

Issued by banks + financial companies, allowing customers to delay payments

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4
Q

Cheque

A

A written order to a bank to make a payment for a specific amount from one person’s account to another.

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5
Q

Electronic transfer

A

Payment is transfered directly fron one bank account to another

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6
Q

Direct debit

A

An agreement made with a bank allowing a 3rd party to withdraw from an account on a set day.

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7
Q

Standing order

A

Agreement made with bank to transfer a fixed sum to a 3rd party on a set date on a regular basis

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8
Q

Pre-paid cards

A

Money is uploaded on to a card with transactions them being withdrawn to reduce balance

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9
Q

Contactless card

A

Cards containing antennae allow money to be transferred when card touches contactless terminal

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10
Q

Charge cards

A

Allow customers to delay payments for G+S’s for a short period of time

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11
Q

Store cards

A

Issued by a retail outlet so customers con delay, payments for G+S’s

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12
Q

Mobile banking

A

Online barking using mobile devices

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13
Q

BACS + Faster payments

A

electronic payment from one bank account
to another

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14
Q

CHAPS

A

electronic payment fron one bank account to another

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15
Q

Advantages of cash

A
  • mostly widely accepted
  • makes budgeting easier
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16
Q

Disadvantages of cash

A
  • can be lost/stolen
  • can’t be used online
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17
Q

Advantages of Debit card

A
  • secure method of payment
  • widely accepted
18
Q

Disadvantages of debit card

A
  • ## small risk of cardholder overspending
19
Q

Advantages of credit cards

A
  • Allows a free period of credit that’s interest free
  • offers a degree of protection on purchases
20
Q

Disadvantages of credit cards

A
  • Interest is charged on cash withdrawals
  • Can encourage customer to overspend and get into debt
21
Q

Advantages of a cheque

A
  • low risk form of payment as can only be cashed by named payee
  • widely accepted for face-to-face and postal transactions
22
Q

Disadvantages of a cheque

A
  • although still widely accepted, some retailers no longer accept them
  • once’s it’s been cashed, can take at least 3 days to be available
23
Q

Advantages of electronic transfer

A
  • Almost instantaneous
  • Provides a record of payment
24
Q

Disadvantages of electronic transfer

A
  • Risk of loss if transfer is set up incorrectly
  • Not appropriate for face-to-face transactions
25
Advantages of direct debit
- easy to set up and cancel - An easy way to make regular payments
26
Disadvantages of direct debit
- Person paying must have sufficient funds in their bank to cover payments - amount can vary making difficult to plan expenditure
27
Advantages of standing order
- Payments don’t change so can plan expenditure - easy to set up and cancel
28
Disadvantages of standing order
- Payments will continue to be made unless cancelled - Payer must have sufficient funds to cover payment
29
Advantages of pre-paid cards
- Can set a budget in advance to avoid overspending - If lost or stolen, the loss is only the remaining balance
30
Disadvantages of pre-paid cards
- Sometimes require an initial fee to set up - no protection if lost
31
Advantages of contactless card
- Fast, easy and secure - Gaining in popularity
32
Disadvantages of contactless cards
- Usually for amounts for less than £30
33
Advantages of charge cards
- Allows a short period of credit - Often offers additional perks
34
Disadvantages of charge cards
- Must be paid in full each month - Often an annual fixed fee is applied
35
Advantages of store card
- Often offer offers, loyalty schemes, discounts - Allows a short period of credit that’s interest free
36
Disadvantages of store cards
- Only accepted in the store it’s for - Interest is paid on outstanding balances
37
Advantages of mobile banking
- Convenient as can be used at any time or place - Secure
38
Disadvantages of mobile banking
- service is limited compared with internet banking
39
Advantages of BACS and Faster Payments
- Faster payments - transfer takes place within 2 hours - can be accessed in a number of ways including in a branch - No fees
40
Disadvantages of BACS and Faster Payments
- Faster payments is not offered by all banks so customer has to do BACS which can take 3 days to transfer payments
41
Advantages of CHAPS
- Guaranteed same-day transfer as long as bank is instructed by a certain time - No limit
42
Disadvantages of CHAPS
- Fee is charged on every transaction