Payment options for goods and services

Question 1

What are the advantages of paying with cash?

3

Answer 1

Quick and convenient

No extra charges are incurred from transaction

Less chance of overspending, as consumers can only spend the cash in their possession

Question 2

What are the disadvantages of paying with cash?

3

Answer 2

Risk of losing cash or of cash being stolen

Not suitable for paying large bills or purchasing expensive items

Coins can be bulky and heavy to carry

Question 3

What are cheques?

Answer 3

Written bills of exchange drawn on a bank by a current-account holder to pay out a specific sum of money

Question 4

What are the advantages of using cheques?

2

Answer 4

Convenient and safe

Useful for postal payments as a cheque can be cancelled if it is lost

Question 5

What are the disadvantages of using cheques?

2

Answer 5

A charge is incurred for each cheque used

It takes approximately three days for a cheque to clear (enter a recipient’s account)

Question 6

What is a debit card?

2

Answer 6

A card which deducts money directly from a consumer’s current account to pay for a purchase

They can only be used if there are sufficient funds to pay for the goods being purchased are in the account

Question 7

What are the advantages of using a debit card?

4

Answer 7

Safer then carrying cash as a card can be cancelled if is stolen or lost

A contactless payment up to 30 euro and a cash-back option is available

Less chance of overspending as an individual can only spend the money available in their account

Can be used to pay bills online and for online shopping

Question 8

What are the disadvantages of using a debit card?

Answer 8

May incur a charge each time the card is used

Question 9

What is direct debit?

Answer 9

Variable sums of money are paid directly out of the consumer account

Question 10

What is a standing order?

Answer 10

A fixed sum of money is paid directly out of the consumer’s current account

Question 11

What are the advantages of direct debit/standing orders?

2

Answer 11

Convenient and safe for regular bills

Ensures that important bills are not forgotten

Question 12

What are the disadvantages of direct debit/standing orders?

2

Answer 12

A charge is incurred for setting up a standing order

Easy to lose control of spending if there are numerous direct debits or standing orders on a single current account

Question 13

What is a credit card?

Answer 13

A card which allows consumers to pay for purchases on credit

Question 14

What are the advantages of using a credit card?

4

Answer 14

Enables consumers to purchase goods that they do not have the cash for straight away e.g. in an emergency

Useful for paying large bills or purchasing expensive items

Safer than carrying cash as it can be cancelled if it is stolen

Can be used to pay bills online and for online shopping

Question 15

What are the disadvantages of using a credit card?

3

Answer 15

The government take an annual stamp duty charge of 30 euro for the use of credit cards

Encourages impulse buying, as consumers do not need money in their account to purchase goods which can lead to debt

If credit card bill are not paid back on time then high rates of interest can be charged

Question 16

What is 24-hour phone banking?

Answer 16

A facility that allows current-account holders to perform banking activities at home 24 hours a day 36t5 days a year

Question 17

What are the advantages of 24-hour banking?

2

Answer 17

Convenient, as bills can be paid over the phone at any time

Can be accessed anywhere in the world to pay bills or transfer money

Question 18

What are the disadvantages of 24-hour banking?

Answer 18

May incur a charge for phone calls

Question 19

What is online banking?

Answer 19

Banking offered to current-account holders to perform banking activities at home via the internet

Question 20

What are the advantages of online banking?

3

Answer 20

Convenient. as bills can be paid over the internet at any time

Can be accessed anywhere in the world to pay bills or transfer money

Consumers can download their bank’s app, making banking even more accessible

Question 21

What are the disadvantages of online banking?

3

Answer 21

May incur a charge for each transaction

Current accounts could be hacked if account information is obtained

Internet access is necessary

Question 22

What is credit transfer/giro?

2

Answer 22

A paper slip addressed to a bank instructing it to debit a specified sum of money from the consumer’s account to the named account of the giro

They are commonly found in the form of tear-off strips at the bottom of regular bills

Question 23

What are the advantages of credit transfer/giro?

Answer 23

Convenient as all relevant details are on the giro at the bottom of a bill so it saves time having to fill this in

Question 24

What are the disadvantages of credit transfer/giro?

2

Answer 24

A charge is incurred for each giro transaction

Inconvenient compared to 24-hou banking or online banking, as one must travel to the post office or bank

Question 25

What is billpay?

Answer 25

A service operated by An Post that enables consumers to pay a variety of bills, including telephone, gas, cable, and electricity bills, free of charge

Question 26

What are the advantages of billpay?

3

Answer 26

No charge by An Post for carrying out the billpay service

Convenient service, as there are many An Post branches nationwide

Accessible online, so consumers can pay certain bills at any time

Question 27

What are the disadvantages of billpay?

Answer 27

Not all transactions can be completed online, so it can be inconvenient compares to 24-hour banking or online banking