Chapter 9 - Making Payments Flashcards
What information does the cheque counterfoil contain?
- Amount of money
- Date
- Name
What are the three parties to a cheque?
- Drawer
- Payee
- Drawee
Drawer
Person who writes the check - the account holder
Payee
The person we want to pay the money to
Drawee
The bank where we have our account
Cheque
A written instruction to your bank to pay a sum of money to another person from your current account
What do you call a cheque that is more than six months old?
Stale cheque
Dishonoured cheque
A cheque the bank refused to cash because there isn’t enough money in the account
Why would you cross a cheque?
To avoid the check being cached by someone other than it was intended for you should always cross the cheque
What happens to a cross to check?
A crossed cheque must be lodged into the bank account and stay there for at least three days before it can be turned into cash
Name the three types of cheques
◾️Postdated cheque
◾️Antedated cheque
◾️Blank cheque
Postdated cheque
A cheque that has a date sometime in the future. It cannot be cashed until this date has been reached
Antedated cheque
This is a cheque that contains a date sometime in the past. A cheque must be cashed within six months of the date on the cheque
Blank cheque
This is a signed cheque that has some relevant piece of information omitted
What is a debit card?
Electronic payment card that allows a current account holder to withdraw money from their account and to pay for goods without having to use a cheque or cash
What are the advantages of a debit card?
🔺Convenient and safe 🔺You can control your spending 🔺It can be used in most types of retail outlets 🔺Cheaper than writing cheques 🔺Can be used to pay for goods online
What is a credit card?
It can be used to pay for goods and services. However, when using a credit card, you are not spending your money, you are spending the credit card company’s money
What is a smart card?
This is similar to Laser or credit cards, however the magnetic strip also contains a memory that can be loaded with money from your account
What is direct debit?
Where is you allow a person or a business to request an amount of money to be paid out of your bank account and into theirs on a regular basis
What would you use direct debit for?
For paying bills where the amount is different every time, for example telephone bills
What is standing order?
Where you tell your bank to pay a certain amount of money from your account to another on a regular basis. The amount remains the same each time
What is standing order useful for?
Standing order is useful if you want to pay the same amount of money to another person or business, for example, €10 each month to your favourite charity
What is credit transfer?
This is a way of paying bills by transferring money from your bank account directly into another bank account.
What is a bank draft?
It is used as a convenient way of paying for expensive purchases like a car costing €10,000. Instead of carrying €10,000 cash down to the garage or giving the garage a cheque, the customer buys a draft from the bank and hands over €10,000. They give the draft to the garage and the garage is guaranteed to get paid as the bank has already received the money
What is paypath?
Employers can use this to transfer their in employees wages directly into their bank account each week or each month
How is paypath an advantage to the employee?
➡️Safer
➡️More convenient
How is paypath an advantage to the employer?
💛Safer
💛Less costly
💛Involves less work
How is paypath an advantage to the bank?
👣Encourages employees to open bank accounts
👣Involves less work
What does EFTPOS stand for?
Electronic funds transfer at point of sale (debit cards, credit cards, smartcards) 😂🐯✉️📱
