Payment Methods

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

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