Methods Of Payment Flashcards

1
Q

Cash ?

A

Cash - notes and coins

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2
Q

Debit card ?

A

Debit card - issued by banks with payments for goods and services being deducted directly from a current account

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3
Q

Credit card ?

A

Credit card - issued by financial institutions allowing customers to delay payments for goods and services ( buy now , pay later )

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4
Q

Cheque ?

A

Cheque - a written order to a bank to make a payment for a specific amount of money from one persons account to another

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5
Q

Electronic transfers ?

A

Electronic transfers - a system that allows the transfer of payments directly from one bank account to another

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6
Q

Direct Debit ?

A

Direct debit - an agreement with a bank allowing a third party to withdrawer money from an account on a set day to pay for goods and services eg electricity bill

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7
Q

Standing order ?

A

Standing order - an agreement made with the bank to transfer a set fixed amount to a third party on an agreed date on a regular basis eg a phone contract

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8
Q

Pre paid card ?

A

Pre paid card - money is uploaded onto a card and then money is deducted from the balance to reduce the amount

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9
Q

Contactless card ?

A

Contactless card - cards contains antenna allowing money to be transferred when touching a payment terminal

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10
Q

Charge card ?

A

Charge card - issued by financial institutions which allows you to delay payments for a short time . Is then paid back in full when issued with a statement

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11
Q

Store card ?

A

Store card - issued by a retail outlet to be used for purchases and delay payments for a later date

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12
Q

Mobile banking ?

A

Mobile banking - the ability to carry out financial transactions through the online banking portal

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13
Q

Bankers automated clearing service (BACS) ?

A

Bankers automated clearing service (BACS) - payment is transferred directly from one bank account to another

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14
Q

Clearing house automated payment system (CHAPS) ?

A

Clearing house automated payment system (CHAPS) - a system that allows the transfer of payments directly from one bank account to another

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15
Q

Advantages of cash ?

A
  • accepted in most places
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16
Q

Disadvantages of cash ?

A
  • can be stolen
    -cannot be used for online purchases
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17
Q

Advantages of debit cards ?

A
  • secure method as no need for cash
    -can be used for small amounts
  • used for online purchases
18
Q

Disadvantages of debit cards ?

A

-small risk of card holder overspending
-used for online purchases which can encourage overspending
-risk that the card details may be hacked

19
Q

Advantages of credit card ?

A

-cardholder receives a short interest free period usually a month on the amount borrowed
-used for online purchases

20
Q

Disadvantages of credit cards ?

A

-card issuers charges interest on the balance outstanding after the interest free period
-risk of cardholder overspending and getting into debt
-used for online purchases which can encourage overspending
-risk that the card details can be hacked
-some retailers charge a fee for payments made by credit card

21
Q

Advantages of cheques ?

A

-fairly secure method as only the payee can cash the cheque

22
Q

Disadvantages of cheques ?

A

-once the payee cashes the cheque it takes at least 3 days for the amount to be available in their account
-some retailers no longer accept cheques

23
Q

Advantages of electronic transfer ?

A

-easy to set up and use
-transfer is instant

24
Q

Disadvantages of electronic transfer ?

A

-bank details of third part must be correct , otherwise transfer will not take place

25
Advantages of direct debit ?
-simple way to pay regular bills - the amount is deducted automatically from the payers bank account
26
Disadvantages of direct debits ?
-payee may vary amounts making it difficult for the payer to plan expenditure -payer must have sufficient funds in their bank account to cover the payment
27
Advantages of standing orders ?
-payments do not change , allowing the payer to plan their expenditure -payments are made automatically and continue until cancelled making them convenient
28
Disadvantages of standing orders ?
-payer must have sufficient funds in their bank account to cover the payment
29
Advantages of prepaid cards ?
-widely accepted by retailers
30
Disadvantages of pre paid cards ?
- cannot spend more than the amount of cash on the card - however may help control spending -if lost or stolen , the cash on the card is lost - some cards have se up and transaction fees
31
Advantages of contactless cards ?
- fast ,easy , secure
32
Disadvantages of contactless cards ?
-usually for amounts less than £30 -cardholder can lose track of how much they are spending
33
DisAdvantages of charge cards ?
-annua fee is payable -charge card companies require customers to have a certain level of annual income
34
Advantages of store cards ?
-cardholders may benefit from discounts and loyalty schemes
35
Disadvantages of store cards ?
-interest is payable on balance unless paid off in full each Month -risk of cardholder overspending and getting into debt
36
Advantages of mobile banking ?
-allows account holder to check balances , make payments and transfers -secure -can be used wherever the account holder has access to the internet
37
Disadvantages of mobile banking ?
-service limited compared with internet banking -may not be able to access the full range of banking services
38
Advantages of BACS ?
-faster payments - transfers take place Within 2 hours -usually no fee
39
Advantages of CHAPS ?
-guaranteed Same day transfer as long as bank is instructed by a certain time
40
Disadvantages of CHAPS ?
-A Fee is charged