Unit 1 Topic 3 Flashcards
What does ATM stand for?
Automated teller machine (also known as a cash machine).
What is Bacs?
The central payment system used to process different types of electronic payment.
What’s a banker’s draft?
A banker’s draft is similar to a cheque but the payment is signed and guaranteed by the financial services provider that issues it, rather than by an individual. Banker’s drafts are used for paying large sums of money but are falling out of fashion for being old fashioned and not particularly secure.
What is cashback?
A service offered by some retailers when customers pay by card. The retailer gives the customer cash and debits the amount of cash handed over from the customer’s payment card.
What’s a cash card?
A card used to withdraw cash from ATMs or branch counters.
What is CHAPS?
Clearing House Automated Payment System, a same-day payment system for high-value transactions, such as house purchase.
What is a cheque?
A written instruction to the provider (eg a bank or building society) to pay a specified amount to a specified person or organisation.
What is a contactless card? What is it mostly used for?
A card that can be read simply by holding it in front of a card reader - it is used for low value payments.
What is a debit card?
A card that can be used to withdraw cash, to make face-to-face transactions in, for example, shops, and to make payments online or over the phone.
What is direct credit?
An electronic payment into an account.
Give an example of direct credit
A salary
A benefit payment
What is direct debit?
An electronic payment out of an account. The amount and frequency of a direct debit payment can vary.
What is Faster Payments?
An electronic payment service that enables payments to be made within two hours.
What is a mandate?
A paper or online instruction to a provider (eg bank or building society) to make a payment from an account.
What are prepaid cards?
A card that has to have money credited to it before the card holder can use it to pay for goods. Once the initial sum of money on the card runs out, it can be topped up again. Some prepaid cards can be loaded with foreign currency and used abroad.
What is a standing order? What are they used for?
An electronic payment out of an account
They’re used to make regular payments of the same amount
What is a transaction?
Buying or selling something
What is meant by the term ‘transaction need’?
The reason why someone needs to make a payment, eg needing to top up your phone credit so that you can use your phone is a transaction need.
What is a traveller’s cheque? What can it be used for?
A pre-printed cheque for a set amount of currency eg 50 or 100 US dollar or euros. A traveller’s cheque can be exchanged for local currency or used to make payments while abroad.
Name two advantages of using cheques
Secure way of paying money
Easy to carry and use
Name two disadvantages of cheques
Cannot be certain of immediate payment
Some business’ refuse to accept cheques
What are cheques often used for?
To pay money to friends or family
Some people find cash helps them to budget. True or false?
True
Name 3 disadvantages of using cash
Carrying large amounts can be risky
Some sellers prefer other payment methods
If a payment needs to be made every month (bills)
Name 3 advantages of using cash
Convenient to the payer
Instant
Low risk at low values
When is paying with cash ideal?
For everyday, low-value transactions when in face-to-face situations
What are the four criteria for evaluating each available payment method?
Convinience for the payer
How acceptable it is to the payer
Speed
Safety
Give three examples of when cash could be used as a payment method
Buying public transport tickets
Newspaper at a local shop
Coffee in a café
Name the most commonly used account for making and receiving payments
A current account
Explain online banking - what does it enable account holders to do? How can it be accessed?
Enables account holders to give instructions for account transactions via the internet.
Can be accessed by registering for the service.
Enables holders to set up regular payments.
Give 3 advantages of electronic payment
Fast
Safe
Convenient
Name two disadvantages of electronic payments
Security
The risk that the account holder will make a mistake
What do banking apps allow account holders to do?
Check balances
Pay in cheques digitally
Set up direct debits
Set up standing orders
Transfer money from one account to another
What do online payment services alllow people to do? Name an example
Enable people to pay each other without exchanging current account details
Paypal
When can cash cards NOT be used?
To pay sellers in face-to-face situations, over the internet or by telephone.
What are cash cards usually branded as?
VISA or Mastercard.
Who are cash cards often offered to?
People under 18 or those on low incomes to enable them to access their cash easily.
Give an example of a pre-payment card
Oyster card
Name four methods of making payment abroad
Debit Cards
Pre-paid travel cards
Cash in the local currency
Traveller’s cheques
What are pre-paid travel cards?
Plastic payment cards that can be loaded with money and then used to make payments abroad wherever accepted.
Name the two main providers of pre-paid travel cards
Travelex
Caxton
Name the four factors to consider when selecting a payment method
How convenient the payer finds methods
Which methods the seller accepts
How quickly the transaction can be made/completed
How safe the method is perceived to be
