Topic 3: Payment Methods Key Terms

Automated teller machine, also known as a cash machine

• ATM

• Traveller's Cheque

A pre-printed cheque for a set amount of currency, eg 50 or 100 US

dollars or euros. A traveller’s cheque can be exchanged for local

currency or used to make payments while abroad

• Traveler's cheque

• Bacs

A service offered by some retailers when customers pay by card. The

retailer gives the customer cash and debits the amount of cash

handed over from the customer’s payment card

• Cashback

• Banker's draft

A banker’s draft is similar to a cheque but the payment is signed and

guaranteed by the financial services provider that issues it, rather

than by an individual. Banker’s drafts are used for paying large sums

of money but are falling out of fashion for being old fashioned and

not particularly secure.

• Banker’s draft

• Debit card

A card used to withdraw cash from ATMs or branch counters

• Cash card

• Cheque

A written instruction to the provider (eg the bank or building society)

to pay a specified amount to a specified person or organisation. (The

law relating to cheques is quite complex so this is a simplified

explanation for the purpose of these study materials)

• Direct debit

• Cheque

An electronic payment out of an account. The amount and frequency

of a direct debit payment can vary

• Direct debit

• Credit card

An electronic payment out of an account. Standing orders are used

to make regular payments of the same amount

• Direct debit

• Standing order

A card that has to have money credited to it before the card holder

can use it to pay for goods. Once the initial sum of money on the

card runs out, it can be topped up again. Some prepaid cards can be

loaded with foreign currency and used abroad

• Prepaid cards

• Faster Payments

An electronic payment into an account, for example a salary or

benefit payment

• Direct credit

• A paper or online instruction to a provider (eg bank or building

  society) to make a payment from an account