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Business Exam > @ Ways to Pay > Flashcards

@ Ways to Pay Flashcards

1
Q

List all the methods of payment

A
  • Cash
  • Debit Card
  • Credit Card
  • Cheque
  • Direct Debit
  • Standing Order
  • Electronic Transfer
  • Prepaid Cards
  • Charge Cards
  • Mobile Banking
  • CHAPS
  • BACS and Faster Payments
  • Store cards
  • Contactless Cards
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2
Q

Cash

A

Notes and coins

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3
Q

Debit Card

A

Issued by banks with payments for goods and services being deducted directly from a current account

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4
Q

Credit Card

A

Issued by financial institutions and banks allowing holders to delay payments for goods and services

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5
Q

Cheque

A

A written order to pay a sum of money from a bank customer’s account to another person or organisation

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6
Q

Direct Debt

A

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

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7
Q

Standing Order

A

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 fixed loan repayment

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8
Q

Electronic Transfer

A

Payment is transferred directly from one bank account to another

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9
Q

Prepaid Cards

A

Money is uploaded onto a card with transactions then being withdrawn to reduce the balance

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10
Q

Charge Cards

A

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

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11
Q

Mobile Banking

A

The ability to carry out financial transactions using mobile devices such as phones or tablets

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12
Q

CHAPS (Clearing House Automated Payment System)

A

A system that allows the transfer of payments directly from one bank account to another usually on the same day

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13
Q

BACS (Bankers Authorised Clearing Service) and Faster Payments

A

A system that allows the transfer of a payment directly from one bank account to another in 3 working days (unless faster payment is available)

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14
Q

Difference between CHAPS and BACS

A
  • CHAPS has same day transfer

- BACS takes three days to transfer payment

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15
Q

Store Cards

A

Only accepted by stores that issues it

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16
Q

Contactless Cards

A

Cards with an embedded chip and antenna that enables consumers to wave their card over a reader at the point of sale for an automatic transaction

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17
Q

Ad of Cash

A
  • Most widely accepted form of exchange

- Makes budgeting easier- dont overspend or evelope planning

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18
Q

Dis of Cash

A
  • Can be lost or stolen

- Cannot be used for online purchases

19
Q

Ad of Credit Card

A
  • Allows a period of credit that is interest-free- usually one month
  • Suitable for online transactions
20
Q

Dis of Credit Card

A
  • Interest is charged on balances not cleared at the end of the month
  • Can encourage customers to overspend and get into debt
21
Q

Ad of Debit Card

A
  • Secure method- no need for cash

- Widely accepted

22
Q

Dis of Debit Card

A
  • Can be used for online purchases which may encourage overspending
  • Short time lapse between making the transaction and the money being drawn from the customer’s account
23
Q

Ad of Cheque

A
  • Low risk form of payment as the cheque can only be cashed by named payee
  • Widely accepted for face-to-face or postal transactions
24
Q

Dis of Cheque

A
  • Viewed as old fashioned

- Easy to make errors when writing the cheque which can cause problems for both the consumer and the recipient

25
Q

Ad of Direct Debit

A
  • An easy way to make regular payments, e.g household utility bills
  • Reduces admin time- payments can automatically be taken and tracked each month so reduce time managing them
26
Q

Dis of Direct Debit

A
  • If the payer makes a mistake and takes too much, it is the payee’s responsibility to claim the money back
  • The payer determines the amount to be paid each time which can make it difficult to budget
27
Q

Ad of Standing Order

A
  • The same amount is paid each time, allowing person to plan their expenditure
  • Easy to set up and to cancel as required
28
Q

Dis of Standing Order

A
  • Payments are taken regardless of the customer’s balance which could lead to the unplanned use of an overdraft
  • Payments will continue unless cancelled
29
Q

Ad of Electronic Transfer

A
  • Transfer is instant

- Provides a record of payment

30
Q

Dis of Electronic Transfer

A
  • Bank details of third party must be correct- transfer will not take place
  • Not appropriate for face-to-face transactions
31
Q

Ad of Prepaid Cards

A
  • Can set a budget in advance to avoid overspending

- If lost or stolen the loss is limited to the remaining balance on the card

32
Q

Dis of Prepaid Cards

A
  • No protection if lost

- Sometimes requires an initial fee to purchase or set up the card. E.g Oyster travelcards

33
Q

Ad of Charge Cards

A
  • Can buy goods and services without paying for them immediately
  • Allows a short period of credit
34
Q

Dis of Charge Cards

A
  • Must be paid in full each month

- Failure to repay results in very high late payment fee, usually much higher than a standard credit card

35
Q

Ad of Mobile Banking

A
  • Convenient to use as they can be accessed and at any time and in any place
  • More secure and risk free than online/ internet banking
36
Q

Dis of Mobile Banking

A
  • May not be able to access the full range of banking services
  • Regular use of mobile banking can lead to extra charges by the bank
37
Q

Ad of CHAPS

A
  • Guaranteed same-day transfer as long as bank instructed by a certain time
  • There is no limit to the amount of money that can be sent
38
Q

Dis of CHAPS

A
  • Usually fixed charge for each transaction regardless of amount transferred
  • Not a common payment method used by consumers unless it is for a large payment. E.g buying a house
39
Q

Ad of BACS and Faster Payment

A
  • Faster payment allows almost instant transfers that are guaranteed within two hours
  • No fee
40
Q

Dis of BACS and Faster Payment

A
  • A limit is set on the amount that can be transferred in a single transaction
  • Faster payment is not offered by all banks and branches and therefore BACS may have to be used which takes three days to clear
41
Q

Ad of Store Cards

A
  • Allows a short period of interest free credit- usually one month
  • Benefit from discounts and loyalty schemes
42
Q

Dis of Store Cards

A
  • Only accepted in the store or stores specified

- Annual fee is payable- charge card companies require customers to have a certain level of annual income

43
Q

Ad of Contactless Cards

A
  • Secure method of making a payment

- Fast and efficient to make a transaction

44
Q

Dis of Contactless Cards

A
  • Can lost track of how much they are spending

- Only accepted for relatively small transactions

Business Exam (13 decks)

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