Different Ways to Pay

DIFFERENT WAYS TO PAY:

Cash: Notes and coins in wide range of denomination made.

Advantages: 

Most widely accepted as form of exchange.

Its physical paid and is not virtual.

Consumers start feeling more confident when using cash.

It makes budgeting a lot more easier.

Disadvantages: 

It can be lost or stolen, it also cannot be used online.

There is a threat of counterfeit.

It is only appropriate on purchases up for a certain amount.

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

Advantages:

There is no need to carry the cash.

It is a secure method of payment with low risk of theft, widely accepted.

It offers a degree of protection on purchases, suitable for online transactions.

Disadvantages: 

Short time lapse between making the transaction and money being withdrawn may result overspending.

Not accepted or appropriate for small transactions.

Credit Card:  Issued by financial institutions allowing customers to delay payments for goods and services.

Advantages:

Allows a period of credit that is interest free for one month, widely accepted.

Offers a degree of protection on purchases, suitable for online transactions.

Disadvantages: 

Interest is charged on balances not paid off within a month

Can encourage a customer to overspend and get into debt.

Interest is charged on cash withdrawals, limited amount of credit is allowed.

Cheque:  A written order to a bank in order to make a payment for a specific amount of money from one person's account to another account.

Advantages:

Low risk form of payment as the cheque can only be cashed by the normal payee.

Widely accepted for face to face and postal transactions.

No need to provide change as it can be written for an exact amount.

Disadvantages: 

The time delay between writing the cheque and it being cashed could cause a consumer to go overdrawn.

It is viewed as old fashioned.

Easy for the consumer to make errors when writing the cheque.

Electronic Transfer:  Payment is transferred directly from one bank account to another.

Advantages:

Almost instantaneous.

It provides a record of payment.

No additional costs incurred.

Easy to use for one - off and more frequent transactions.

Disadvantages:

Risk of loss if the transfer is…