A2 - Ways To Pay Flashcards
Examples of ways to pay
Cash
Debit card
Credit card
Cheque
Electronic transfer
Contactless card
Direct debt
Standing order
Prepaid cards
Store cards
Mobile banking
Charge cards
Definition of cash
Notes and coins in a wide range of dominions
Advantages of cash
No transaction fee
Immediate settlement
Widely accepted
Disadvantages of cash
Lack of traceability
Can’t be used online
Limitations for international transactions
Definition of debit card
A card issued by your bank, money spent of goods is deducted from your current account
Advantages of debit card
Credit score doesn’t matter
Increased security
Disadvantages of debit card
Limited fund protection
Reduced spending limits
Definition of credit card
Issued by financial institutions, allows customers to delay payment
Advantages of credit card
Boosts credit score
Borrow money without paying interest
Disadvantages of credit card
Temptation to overspend
Potential to max out credit limit
Definition of cheque
A paper transaction giving a bank permission to transfer payment from one account to another
Advantages of cheques
Safer to carry then cash
Keeps a record of transactions
Disadvantages of cheques
Cheques can be refused as not legal tender
Long processing time
Definition of electronic transfer
Payment is transferred directly from one bank account to another
Advantages of electronic transfers
Speed of transactions
Keeps record of transactions
Disadvantages of electronic transfers
Risk of fraud
Technical issues
Definition of direct debit
Permission given to the bank to make regular payments to a third party upon request
Advantages of direct debit
Convenient for recurring payments
Protection incase of forgetting
Disadvantages of direct debit
Can be charged overdraft
Late fees
Definition of standing order
A fixed amount of money is taken out of your bank account on a specified date
Advantages of standing order
Free of charge
Quick to set up
Disadvantages of standing order
Pay,ents are customer dependent
Lack of flexibility
Definition of prepaid cards
Upload money to the card and spending reduces the balance
Advantages of prepaid cards
No credit check
More secure than cash
Disadvantages of prepaid cards
Do not help you build credit
Charge fees
Definition of contactless cards
Payment made by swiping a contactless terminal
Advantages of contactless cards
Hygiene
Fast transactions
Disadvantages of contactless cards
If lost or stolen can be used to make fraudulent transactions
Do not require a PIN
Definition of charge cards
Issued by financial institutions, buy now pay later
Advantages of charge cards
No preset credit limit
Does not apply interest
Disadvantages of charge cards
High annual fees
Late payments damage credit history
Definition of store cards
Issued by a retail outlet, buy now, pay later
Advantages of store cards
Discounts
Free shipping
Disadvantages of store cards
Low credit limits
Easily lost or stolen
Definition of mobile banking
Use a tablet or smartphone to manage your bank accounts
Advantages of mobile banking
24/7 Accessibility
Quick & Easy transactions
Disadvantages of mobile banking
Data usage concerns
Possible security vulnerability
Definition of BACS and FPS
Payments transferred from one account to another
Advantages of BACS & FPS
Reduces administration
Speedy transactions
Disadvantages of BACS & FPS
Limited flexibility
Security risks
Definition of CHAPS
Electronic bank to bank technology that enables payments to be made
Advantages of CHAPS
Safe and secure
Require very little effort from businesses
Disadvantages of CHAPS
Very expensive
Cannot be used for international payments
