Payment Methods

Question 1

What is the payment method of card?

Answer 1

It’s when credit is when payment is deferred (put off until later), have a credit limit (of an agreed some), pay the borrowed money (debt) back, pay interest, may have to pay a surcharge (additional charge/fee)

Question 1

What is the payment method of cash?

Answer 1

It’s the most traditional form of payment; appropriate when technology is not available, can be lost or stolen, mistakes can be made during transactions

Question 2

What is a debit card?

Answer 2

It’s linked to bank account, uses owners money

Question 3

What is credit debit?

Answer 3

It’s the agreement made with the bank that allows you to transfer money to someone else, usually on an agreed date; set up regular payments, effective may for paying bills, or loans

Question 4

What are payment technologies?

Answer 4

It’s the transactions online using e-commerce; paypal (public and businesses to transfer money), online payments, online customers accounts where details are already stored, apps

Question 5

What are advantages of credit cards?

Answer 5

• It can be used on any amount to an agreed limit so the customer doesn’t incur high credit card charges
• Cardholder receives short interest free period on the amount borrowed
• Spreads out the cost: if you need to make a big purchase, a credit card lets you pay over several monthly instalments

Question 6

What are disadvantages of credit cards?

Answer 6

• Interest must be paid once interest free period ends
• The cards are issued with a credit limit
• If you can’t pay back what you borrow, your debts can pile up quickly

Question 7

What are the advantages of debit cards?

Answer 7

• No need for cash
• Payment taken directly from cardholder’s bank account at the time of transaction
• Contactless cards do not require a pin
• Can earn rewards/cashback
• Can be used to may online/telephone payments
• Can be used via phone or online

Question 8

What are the disadvantages of debit cards?

Answer 8

• Card can be lost, stolen or damaged
• Some ATMs will charge withdrawal fees
• Payment taken directly out of account (good for businesses)
• Customers must have sufficient money in their account to cover payment, otherwise payment will not take place

Question 9

What are the advantages of direct debit?

Answer 9

• Simple way to pay regular bills- deducted automatically from customer’s bank account
• Avoid missed payments so ensures they are made on time
• Saves time
• Goes direct into businesses account

Question 10

What are the disadvantages of direct debit?

Answer 10

• Customers must have sufficient money in their bank account to cover payment, otherwise payment will not take place
• Customers give control to a third party to take money from their account. They must trust them

Question 11

What are the advantages of payment technologies?

Answer 11

• Allows same day payments from one bank account to another
• Online customer accounts makes it simple to make repeat purchases

Question 12

What are the disadvantages of payment technologies?

Answer 12

• Some payment technologies charge a fee