Cheque- A written order to a bank to make a payment for a specific amount.
Advantages: low risk, is specific amount so no need for change
Disadvantages: expensive if the bank refuses the cheque, not accepted in shops anymore.
Electronic transfer- Payment is transferred directly from one bank account to another.
Advantages: instant, provides a record transfer and no costs
Disadvantages: Risk of loss if set up incorrectly and not appropriate for face to face transactions.
Direct Debit- An agreement made with a bank allowing a business to withdraw money from your bank account on a fixed date to pay for a bill.
Advantages: easy way to pay, easy to set up
Disadvantages: The amount can change each month and money is taken even if not available.
Clearing House Automated Payment Systems (CHAPS)- A system that allows the transfer of payment directly from one bank account to another.
Advantages: Can be made same day and no limit on the amount that can be transferred at one time.
Disadvantages: There is a fixed charge per transaction.