Section A Methods of payment Flashcards
Give 2 advantages of using a debit card as a method of payment
ADVANTAGES:
- No need to carry cash
- Widely accepted &a secure method of payment
Give 2 disadvantages of
using a debit card as a
method of payment
DISADVANTAGES:
Short time lapse between making the transaction and the money being drawn from
the customer’s account
Not accepted or appropriate for small transactions
Give 2 advantages of using cash as a method of payment
ADVANTAGES:
Most widely accepted form of exchange
Makes budgeting easier
Give 2 disadvantages of
using cash as a method
of payment
DISADVANTAGES:
Can be lost or stolen
Cannot be used for online purchases
Give 2 advantages of using a credit card as a method of payment
Allows a period of credit that is interest free - usually 1 month
Suitable for online transactions
Give 2 disadvantages of using a credit card as a method of payment
Interest is charged on owed balances if not paid back within a month
Can encourage customer to overspend and get into debt
2 advantages of cheques as payment
low risk for of payment as can only be cashed by named payee
widely accepted for face to face or postal transactions
2 disadvatages of chques as payment
veiwed as old fashioned
Easy to make erros when writing check resulting in disruptions
2 advatages of electronic transfer
Almost instant transfer of money
Provides a record of payment
2 disadvantages of electronic transfer
risk of loss if transfer is set up or addressed incorrectly
not appropriate for face to face transactiosn
2 advs of direct debit
Easy way to make regular payments e.g household utilites shopping etc
no limit on how much can be paid at once
2 dis advs of direct debit
payer dermines the ammount to pay each time which can make budgeting difficult
2 advs of standing orders
the same amount is paid each time making it easier for payee to budget
easy to set up and cancel as required
2 dis advs of standing orders
Payments are taken regardless of balence - can lead to unplanned overdraft
payments will continue unless cancelled
2 advs of pre-paid card
Can set a budget in advance to avoid overspending
if lost or stolen loss is limited to remaining card balence
2 dis advs of pre-paid card
no protection if lost
can required initial fee to purchase / set up card e.g oyster travel cards
2 advs of contactless
secure method of payment
fast and efficent transactions
2 dis advs of contactless
only accepted for relatively small transactiopns
not widely accepted at outlets
2 advs of store cards
Allows short period of intrest free credit - typically 1 month
offers cardhlders specific loyalty schemes incentives and discounts
2 dis advs of store cards
Only accepted in specified stores
Interest on balences is often high
2 advs of mobile banking
convenient to use as access any time any place
more secure than online banking
2 dis advs of mobile banking
no available on all phones and require specific apps to use service
regular use of mobile banking can lead to extra charges from bank
2 advs of Bankers Automated Clearing Service BACS payments
Faster payment allows almost instant transfers - within 2 hrs
no additional costs
2 dis advs of BACS payments
limit on the ammount that can be transferred at once
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