Payment Methods

The most common payment.

Advantages:

• When a business uses cash, they will recieve the money straight away. This means that they don't have to wait for the money to flow into the business. Improved cash flow.
• It can be used by all ages

Disadvantages:

• Although the business doesn't have to pay for processing charges, they will need to purchase equiptment like safes and tills to store the money.
• Any cash will need to be taken to the bank to keep it safe
• It is dificult to carry around large amounts- it can be heavy and dangerous

Advantages:

• More secure/ safer than cash
• More convienitent than large amounts of cash
• Cheques are easier to trace if it gets lost
• It can be posted trough unsecure methods, since only the person adressed on the cheque can claim it

Disadvantages:

• Cheques take 3 working days to clear
• Admin time is spent to fill out the cheque
• Banks may charge businesses to process the cheque
• Less secure than credit transfer- Can get lost
• Cheques can 'bounce' if there is no money in the person's bank
• Cheques must be paid to the bank within 6 months, otherwise it becomes invalid
• Since they're handwritten, they can be altered to comit fraud

Allows the user to borrow money and then pay it back later or in installments.

Advantages:

• Enables the business to accept lots of different currencies
• Risk of fraud is reduced- pin
• Payments can be made online
• Cash can be borrowed

Disadvantages:

• Interest rates can be high, especially when using credit cards to borrow money
• The person could be fined if they don't pay back in time
• Can encourage people to purchase items that they don't have the money for

Similar to a credit card but instead of money being borrowed, it is taken out of the person's account.

Advantages:

• The payment is guarenteed- the payment can't 'bounce' like a cheque
• The business will be able to accept diffenent currencies
• The payments can be made online
• It is safer- chip and pin

Disadvantages:

• They may be charges to process the card by the bank
• Can take up to 3 days for the money to reach the businesses bank account

Allow the business to move money from one account to another

Advantages:

• They are able to move funds between accounts and gain interests on the money while waiting to pay thier bills