methods of payment

• Methods of Payment

  • Cash
  • Plastic money
  • Cheque
  • Hire Purchase
  • Interest free credit
  • Bank loan
  • Overdraft facilities
• How to pay for products

  1. Cash

  2. Plastic money

  3. Cheque

  4. Hire Purchase

  5. Interest free credit

  6. Bank loan

  7. Overdraft facilities
• Cash

  • Coins and notes exchanged for goods and services
  • Quickest method of payment
• Cheque

  • Official slip detailing an amount to be paid in exchange for goods and services
  • Convenient as you don't need to carry large amounts of cash
  • May be asked to present ID card
  • Cheque book may tempt impulse buying
  • Time consuming to fill in
• Steps to write a cheque

  1. Write the date

  2. Write the name of the person/company receiving the cheque

  3. Write the numerical amount

  4. Write the amount in words

  5. Sign the cheque

  6. Fill in the counterfoil
• Hire Purchase

  • Consumers buy expensive items they can't afford to pay for outright
  • Pay a percentage upfront, balance paid over several months
  • Additional charge referred to as interest
• Interest-Free Credit

  Similar to hire purchase but no interest is due
• Bank Loan

  • Type of debt granted to consumers who have made special arrangement with the bank
  • Monthly repayments made with interest charged on the balance owed
• When taking up a loan

  • Consider how much you can afford to repay
  • Consider how long you want the loan for
• Overdraft Facilities

  • Allows consumers to take out more money than they have in their account, up to an agreed amount
  • Interest usually payable on money overdrawn
  • Some banks agree a modest overdraft limit with no interest
• Plastic Money

  • Cash cards containing a magnetic strip which holds the consumer's PIN
  • Allows withdrawing money from ATMs
  • Allows paying by swiping a card in an EPOS machine or contactless
• Credit Card

  • Card issued to the holder, allowing them to buy goods and services up to a certain limit
  • The consumer is then billed at a later date for these purchases and has to pay off the amount to the credit card company
  • The amount can be paid back either in one lump sum or over time, in which case interest may be owed
• Debit Card

  • Allows paying for goods using funds transferred directly from the consumer's bank account to the store's account
  • Payment can only go through if there is enough money in the account
  • Issued by banks when the customer opens a current or savings account
  • Can be used to operate ATMs or purchase directly via EPOS
  • A 4-digit PIN is issued with the card
  • Limits usually apply on cash withdrawals and EPOS purchases
  • Eliminates the need to go to the bank for minor transactions
• Electronic Funds Transfer at Point of Sales (EFTPOS)


  • Paying for goods without using physical money
  • The amount owed is transferred automatically from the consumer's bank account to the shop's bank account
  • The debit card is inserted by the sales assistant through an electronic terminal which prints a sales receipt
• Services offered by ATMs

  • Withdraw cash
  • Deposit cash/cheques
  • Transfer money between accounts
  • Request an account statement/mini-statement
  • Request a balance enquiry
  • Pay bills
  • Request a cheque book
• Direct Banking

  • Transfer money between accounts
  • Order Foreign currency
  • Request a balance on accounts
  • Obtain information about recent transactions
• Protecting your card

  • Sign card immediately after receiving it
  • Keep PIN a secret
  • Destroy PIN notification
  • Do not carry PIN in wallet or anywhere visible
  • Be careful when giving account number over the phone
  • Keep receipts to check against monthly statements
  • Cut up old cards before disposing
  • Report immediately if the card is lost
• cheque - written instruction to pay an amount from one bank account into another
• cash - money that is physically held by the business