Payment Methods Flashcards
Methods of payments
Credit cards Debit cards Cash Direct debit Payment technologies
Credit cards
Used by a customer to purchase goods now but pay the cards company at a later date
Debit cards
A card used by a customer that transfers money from their current account to a business account when pay for goods
Cash
This is most traditional method of payment and involves handling over notes/coins.
Direct debit
Agreed amount comes out a customers bank account each month to pay for products/service and transferred directly to the business’s account
Payment technologies
This is where transactions takes place online using e commerce and m commerce (Apple pay)
Advantages for using cash
No technology is needed such as a chip and pin machine which will cut business costs
Cash can be taken easily and doesn’t depend on internet working
Disadvantage of using cash
Money can be lost or taken
Mistakes can be made using transaction (wrong change)
Advantages for using credit cards
Customers can buy products with borrowed money
Less mistakes made during transaction
Disadvantage for using credit card
Banks will charge a business surcharge on each transaction using a credit card which will increase costs
Interest rates are high
Advantages for debitcards
Less mistakes made during transactions
Convenient for customers to use
Disadvantage for debit cards
Technology is needed which is expensive to buy for small businesses
Sometimes internet is not working meaning they cannot be used
Advantages for direct debit
Easy way for regular payments such as electricity, gas or bills
Advantages for payment technologies
Safe and secure way for customers to pay
Allow customers to buy products using e commerce and m commerce
Disadvantage for payment technologies
Cost of technology can be expensive
Issues if technology isn’t working
Open to online fraud
