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3.3 cheques - Coggle Diagram
3.3 cheques
a cheque is a payment mechanism that enables an account holder to instruct their provider to pay a specific amount of money to a specific person or organisation. providers give current account holders pre-printed check books to complete with their payment instructions
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the advantages of cheques are that they are a secure way of paying money. they are also easy to carry.
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although cheque imagining has significantly sped up clearing, people or organisation that accept cheques still cannot be certain that they will receive the money immediately.
given the decline in the use of cheques and are processed through the clearing system. however, many individuals and organisations
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the disadvantage of cheques and the advantages of alternative ways to pay mean that numbers of cheques written and received has been falling every year since 1990.
in a survey the c&ccc conducted in 2019, only 29% of the UK account holders questioned made payments by cheque.
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bankers draft look similar to cheques and are processed through the clearing system. however, they are signed by the provider rather than an individual. this means that the payment is guaranteed. banker's drafts tend to be used for paying large sums of money when a personal cheque is not appropriate.
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plastic payment cards are another payment mechanism that enables account holders to give their provider instructions to pay money from an account.
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cash cards allow account holders to withdraw cash from their account at a branch or using an ATM. they cannot be used to pay sellers in face-to-face situations, over the internet or by telephone. providers offer current account cash cards to people under 18 years of age or those who low incomes to enable them to access their cash easily 24hrs a day 7 days a week.
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debit cards allow account holders to access cash from their accounts and also pay for goods in stores, over the internet, by telephone and by post. they work like electronic cheques because the payment is taken directly from the account.
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some debit cards can also be used for contactless payments of up to a specified low limit per transaction. this service allows card holder to make transactions by holding their card near the reader. advantage of contactless is transactions are quicker.
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pre-paid cards are like electronic purses. cardholders load the card with money and then use it to pay for goods and services.