Personal Finance - Methods of payment Flashcards
Cash
Notes and Coins in a wide range of denomination.
Debit card
Issued by banks with payments for goods and services being deducted directly from a current account.
Credit card
Issued by financial institutions allowing customers to delay payments for goods and services.
Cheque
A written order to a bank to make a specific payment for a specific amount of money from one person’s
account to another account.
Electronic transfer
Payment is transferred directly from one bank account to another.
Direct debit
An agreement made with a bank allowing a third party to withdraw money from an account on a set day
to pay for goods or services received e.g. electricity bill.
Standing order
An agreement made with a bank to transfer a fixed sum of money to a third-party account on a set date
on a regular basis e.g. a fixed loan repayment.
Pre-paid card
Money is uploaded onto a card with transactions then withdrawn to reduce the balance.
Contactless card
Cards with an embedded chip and antenna that enable consumers to wave their card over a reader at
the point of sale for an automatic transaction.
Charge card
Issued by financial institutions allowing customers to delay payments for goods and services for a short
period of time with the balance being paid off in full at each statement date.
Store card
Issued by a retail outlet to allow customers to delay payments for goods and services – similar to a
credit card but only for the store(s) specified.
Mobile banking
The ability to carry out financial transactions using mobile devices such as phones or tablets.
Bankers Automated
Clearing Service
(BACS) Faster payment
A system that allows the transfer of payments directly from one bank account to another in 3 working
days (unless faster payment is available).
Clearing House
Automated
Payment Systems (CHAPS)
A system that allows the transfer of payments directly from one bank account to another, usually on the same day.
