Topic 1 Unit 2

Question 1

What are paper statements?

Answer 1

Statements sent via post, used to view what money comes in and out of your account.

Question 2

What are the advantages and disadvantages of paper statements?

Answer 2

Advantages- Physical copy of transactions, easy to manage.

Disadvantages - Can be lost or intercepted (not secure). Online copies are becoming more popular.

Question 3

What are the advantages and disadvantages of internet banking?

Answer 3

Advantage - Accessible 24 hours a day, 365 days a year.

Disadvantage - Some issues cannot be resolved online and may require a phone call instead.

Question 4

What is telephone banking?

Answer 4

An arrangement that allows you to talk to someone over the phone about your account. Some providers offer telephone banking only such as some supermarkets.

Question 5

How do you set up telephone banking?

Answer 5

You will be given a customer identification number, or a user name, and you will be given guidance to help you to set up a password and a personal identification number (PIN). You will also give the operator some answers to some special security questions (just like with internet banking).

Question 6

What will you be asked to provide when you telephone a bank?

Answer 6

You will be asked to enter your customer number on the keypad. The automated voice will ask for two of the numbers of your PIN – for example, the first and fourth numbers.

Question 7

What is the system ‘Pingit’?

Answer 7

Barclays Bank made an app called ‘Pingit’, which allows Barclays current account holders to send and receive money, without charge, to anyone with a UK current account and mobile phone number.

Question 8

What is the system ‘Paym’?

Answer 8

Paym is a mobile payment system developed by the Payments Council, similar to Pingit.

Question 9

What is apple pay?

Answer 9

Apple Pay is a mobile payment and digital wallet service that lets users make payments (in shops, restaurants, etc) using certain models of iPhone and Apple Watch compatible devices.

Question 10

What is an ATM also known as?

Answer 10

A ‘cash machine’, a ‘cash point’, or a ‘hole in the wall’,.

Question 11

Can you use an ATM at any time of the day?

Answer 11

Yes, they are 24hr services, only requiring electricity.

Question 12

What do you need to withdraw money from an ATM?

Answer 12

To use an ATM, you will need a plastic card and a PIN.

Question 13

What can you do at an ATM?

Answer 13

• request a balance
• print a mini-statement
• change your PIN
• order a chequebook

Question 14

What is The Faster Payments Service?

Answer 14

It means that bills can be paid on a ‘same day’ basis; across the European Union payments will arrive at their destination by the end of the next working day. Standing orders can also be processed using the Faster Payments Service.

Question 15

What is the maximum transfer limit for ‘The Faster Payments Service’?

Answer 15

There is a maximum limit for Faster Payments of £100,000 for each transaction (although some corporate transactions can be up to £250,000). Some banks have put lower limits on the payments, particularly for individuals.

Question 16

What is printed on a cheque?

Answer 16

• the account number
  -the sort code for the branch with which the account is held
• the cheque number.
  The account holder writes on the cheque:
• the date,
• the name of the person whom they want
  to pay (the payee)
• the amount that they want to pay that person (in both words and figures),
  -then a signature.

Question 17

Does a cheque ‘clear’ straight away?

Answer 17

The cheque goes to the bank and goes into an account, in which it will show as a credit, although it will not be ‘clear’ for a few days. Under rules introduced in 2007, a paid-in cheque starts to earn interest after two days, can be drawn on after four days and is guaranteed not to ‘bounce’ after six days.

Question 18

Are the use of cheques declining?

Answer 18

Yes, due to online banking and the introduction of various bank cards.

Question 19

What is direct debit?

Answer 19

A direct debit is an instruction to the bank to let a company, such as an electricity company or a phone company, take money out of your account to pay your bills. It is usually a monthly payment and can be for the same amount or a different amount each time.
Basically, it is an automatic process, not in control of any person.

Question 20

Why is direct debit used?

Answer 20

To make sure payments are made on time.

Question 21

What is a standing order?

Answer 21

A payment that automatically transfers on the same date each month or week. it is the same amount, therefore different from direct debit.

Question 22

What are CHAPS?

Answer 22

We can use CHAPS to send payments that have to arrive on time and within a single day. Individuals can use CHAPS for important large payments, such as buying a house or a car, and for payments that are urgent and cannot be sent through Faster Payments.

Question 23

Do you have to charge to make a CHAPS payment?

Answer 23

Yes, there is a fee for using the service.

Question 24

What are bacs?

Answer 24

Bacs handles all of the automated payments made by banks and large organisations. It uses computers to take payments from one account and to pay them to another account.

Question 25

What are the most common uses for bacs?

Answer 25

The most common uses of Bacs are for direct debits and direct credits.

Question 26

What is paypal?

Answer 26

PayPal is a secure online account that stores and safeguards your bank, credit or debit card details, and which allows you to pay or be paid safely and easily without sharing any of your financial information.

Question 27

Why is it important to track your finances?

Answer 27

In order to budget properly, and to plan for

both the short term and the long term.

Question 28

What is card cloning and copying?

Answer 28

There is a risk that fraudsters will try to copy information off your cards. They can then use this information to make a copy – or ‘clone’ – of your card, which allows them to spend your money.

Question 29

What is identity fraud?

Answer 29

Identity fraud refers to the situation in which someone impersonates you without your knowledge or consent, or uses your personal information to obtain money, goods or services.

Question 30

What is phishing?

Answer 30

Phishing refers to the practice of sending spoof emails that look as though they come from your bank or other financial provider, but ask you to confirm details such as
your online banking passwords or PIN.