Payment options for goods and services Flashcards
What are the advantages of paying with cash?
3
Quick and convenient
No extra charges are incurred from transaction
Less chance of overspending, as consumers can only spend the cash in their possession
What are the disadvantages of paying with cash?
3
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
What are cheques?
Written bills of exchange drawn on a bank by a current-account holder to pay out a specific sum of money
What are the advantages of using cheques?
2
Convenient and safe
Useful for postal payments as a cheque can be cancelled if it is lost
What are the disadvantages of using cheques?
2
A charge is incurred for each cheque used
It takes approximately three days for a cheque to clear (enter a recipient’s account)
What is a debit card?
2
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
What are the advantages of using a debit card?
4
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
What are the disadvantages of using a debit card?
May incur a charge each time the card is used
What is direct debit?
Variable sums of money are paid directly out of the consumer account
What is a standing order?
A fixed sum of money is paid directly out of the consumer’s current account
What are the advantages of direct debit/standing orders?
2
Convenient and safe for regular bills
Ensures that important bills are not forgotten
What are the disadvantages of direct debit/standing orders?
2
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
What is a credit card?
A card which allows consumers to pay for purchases on credit
What are the advantages of using a credit card?
4
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
What are the disadvantages of using a credit card?
3
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
What is 24-hour phone banking?
A facility that allows current-account holders to perform banking activities at home 24 hours a day 36t5 days a year
What are the advantages of 24-hour banking?
2
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
What are the disadvantages of 24-hour banking?
May incur a charge for phone calls
What is online banking?
Banking offered to current-account holders to perform banking activities at home via the internet
What are the advantages of online banking?
3
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
What are the disadvantages of online banking?
3
May incur a charge for each transaction
Current accounts could be hacked if account information is obtained
Internet access is necessary
What is credit transfer/giro?
2
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
What are the advantages of credit transfer/giro?
Convenient as all relevant details are on the giro at the bottom of a bill so it saves time having to fill this in
What are the disadvantages of credit transfer/giro?
2
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
What is billpay?
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
What are the advantages of billpay?
3
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
What are the disadvantages of billpay?
Not all transactions can be completed online, so it can be inconvenient compares to 24-hour banking or online banking
