Payment Methods

Question 1

Different Types of Payment Methods (10)

Answer 1

BACS
Credit Card
CHAPS
Cash
Standing Order
Direct Debit
Cheque
Debit Card
Faster Payment
Bankers Draft

Question 2

The use and Effect of Bank for Cash (Withdrawn from the bank)

Answer 2

Used for Small value, face to face transactions

Immediate effect on the bank balance if it is withdrawn from the account

Question 3

The use and Effect of Bank for Debit cards

Answer 3

Can be used online, over the phone and in person

Has an automatic and immediate effect on the bank balance.

Question 4

The use and Effect of Bank Drafts

Answer 4

Used for guaranteed payments e.g. vehicle/overseas payment

Has an immediate affect on the payers bank balance but only affects the payee when they bank the draft

Question 5

The use and Effect of Standing Orders

Answer 5

Used for regular and same value payments e.g. rent (set up by the payee)

Immediate and regular effect on the bank balance

Question 6

The use and Effect of Direct Debits

Answer 6

Used for regular payments when the value may vary e.g. utility bills

Has an immediate and regular effect on the bank balance

Question 7

The use and Effect of BACS

Answer 7

Electronic Bank payment
E.g. Wages

Has an immediate effect on the bank

Question 8

The use and Effect of CHAPS

Answer 8

Non-cancellable bank transfer used for large purchases e.g. property

Immediate effect on the bank balance

Question 9

The use and Effect of Faster Payments

Answer 9

Same day small/medium payments e.g. to suppliers

Immediate effect on the bank balance, usually within 2 hours

Question 10

The use and Effect of Cash from tills

Answer 10

Used for small value transactions

Cash from till does not effect the bank balance

Question 11

The use and Effect of Cheques

Answer 11

Used to make purchases on credit
Can be sent by post

Has a delayed effect on the bank as it may not be banked straight away

Question 12

The use and Effect of Credit Cards

Answer 12

Can be used online, on the phone and in person

The bank balance is not affected until the balance on the credit card is settled

Question 13

What payment methods have an immediate effect on the bank balance (8)

Answer 13

• Cash withdrawn from the bank
• Debit Card
• Bank Draft
• Standing Order
• Direct Debit
• BACS
• CHAPS
• Faster Payments

Question 14

What payment methods have no effect on the bank balance (1)

Answer 14

• Cash from tills

Question 15

What payment method has a delayed effect on the bank balance (1)

Answer 15

Cheque / CC