- Created by: sarp2004!
- Created on: 31-01-20 18:42
Issued by banks to their customers (account holders); card is linked directly to the card holder's bank account.
Payment taken directly from cardholder's bank accounnt at time of transation
No need for cash
Can be used for payment up to the amount in the cardholder's bank (including any authorised overdraft limit)
Contactless cards (up to value of £30 per transaction) do not require use of PIN
Can be used remotely via phone or online
Can be stolen
Issued by banks and financial companies.
Card issuer pays at time of transaction - a loan to the card holder
Cardholder receives short interest-free period on amount borrowed
Can be used for any amount up to a limit set by the card issuer so the customer does not incur high credit card charges
Card issuer charge interest on the balance outstanding after the interest-free period
Cards are issued with a credit limit so that the cardholder is limited to the amount that they can spend, regardless of their financial situation
Seller pays a fee to credit card company each time a customer pays by card
Cash (notes and coins)
Accepted in most places.
May not be suitable for very large transations
Nost suitable for online purchases
Can be lost or stolen
Mistakes can be made during transactions such as incorrect change being given.
An instruction to a bank authorising a third party, such as an enterprise to transfermoney of varying amounts from a customer's account to its own bank account on an agreed date.
Simple way to pay regular bills - deducted automatically from customers bank account
Third party may vary amounts making it a flexible way to collect payments.
Customer must have sufficient money in their bank account to cover payment, otherwise payment will not take place.
Ecommerce transactions such as PayPal allow individuals and enterprises to transfer money between buyers and sellers.
Electronic payments such as Faster Payments and CHAPs allow same day payments from one bank account to another
Online customer accounts linked to ecommerce website stores customers' payment details - simple to make repeat purchases
Payment apps allow transactions to be completed using smartphone
Some payment technologies such as PayPal and CHAPs charge a fee.
A written order to pay a sum of money from a bank account to the payee (enterprise or individual). This method of payment is declining in popularity.
More secure than cash.
Needs to be paid directly into a bank so can be inconvenient.
Cannot be used remotely or online.
Takes several days to clear (make funds available).
Most banks charge businesses for paying in cheques