Moodle Version Making And Receiving Pay

Methods of Payment
Payment
There are 5 commonly accepted methods of payment:
Cash
Cash
BACS
BACS

Credit Cards
Credit Cards

Cheques
Cheques

Debit Cards
Debit Cards

© Business Studies Online: Slide 1

Which Methods Are Most Popular?
Popular?
45,000

40,000

Cash

T ra n s a c t io n s ( M illio n s )

35,000

30,000

25,000

20,000

Cheques

15,000

BACS

10,000

Credit Cards
5,000

Debit Cards
0
1995

1996

1997

1998

1999

2000
Year

2001

2002

2003

2004

Source: Apacs
© Business Studies Online: Slide 2

Cash
Cash is a popular form of payment with customers because: Transactions are completed immediately Cash can be re­used for other transactions immediately

© Business Studies Online: Slide 3

Advantages & Disadvantage of Using Cash

Advantages

Disadvantages

Payment is made straightaway

Cash has to be counted

Ideal for small purchases

Has to be locked away for security Convenient

Can be Stolen

© Business Studies Online: Slide 4

Cheques
Cheques
A paper­based form of payment
Effectively a promise to pay the amount stated
Cheques must be presented to a bank in order to obtain the payment
It usually takes at least 3 working days for a cheque to “clear” – i.e. payment to be received

© Business Studies Online: Slide 5

Advantages & Disadvantages of Cheques

Advantages

Disadvantages

Safer than cash

Takes time to clear

Better for large amounts

It can “bounce”

Cheaper than cash to operate with Errors can result in bank refusing cheque

© Business Studies Online: Slide 6

Debit Cards
Cards
A plastic card, issued by the bank, which allows payment to be made without writing a cheque or carrying cash
It works as follows:
Customer hands over debit card

Shop assistant puts card in chip and pin machine

The amount is taken electronically from customer‛s account and added to business's account
(takes 3 days)
© Business Studies Online: Slide 7

Advantages & Disadvantages of Debit Cards