/
Chapter 12 Chapter 12

Chapter 12 - PowerPoint Presentation

tatiana-dople
tatiana-dople . @tatiana-dople
Follow
363 views
Uploaded On 2016-03-01

Chapter 12 - PPT Presentation

The banking system in the UK Learning objectives After you have studied this chapter you should be able to Describe the changes that have occurred in the UK since the late 1960s in the ways payments can be ID: 237726

bank cheque payment card cheque bank card payment cheques cash account credit debit pay learning banking continued payments system

Share:

Link:

Embed:

Download Presentation from below link

Download Presentation The PPT/PDF document "Chapter 12" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.


Presentation Transcript

Slide1

Chapter 12

The banking

system

in

the UKSlide2

Learning objectives

After you have studied this chapter, you should be able to:

Describe the changes that have occurred in the UK since the late 1960s in the ways payments can be

made

Describe the many alternatives to cheques and cash that currently

exist

Describe the credit card payment

systemSlide3

Learning objectives

(Continued

)

Describe the cheque clearing

system

Write a

cheque

Explain the effect of various kinds of crossings on

cheques

Explain how to endorse a cheque over to someone

else

Complete bank pay-in

slips

Explain the timing differences between entries in a cash book and those on a bank

statementSlide4

How has banking changed?

Withdrawing money – previously this was done in a branch using a cheque.

Now

a debit card can be used at virtually any cash

machine.

Cash machines (ATMs) – previously supplied cash in exchange for a token, and then used the PIN system to offer £10 at a time, but now offers the option to complete tasks via the

screen.

Direct debits – offer a non-cash payment

option.Slide5

Forms of payment

Cheque

Debit car

d

Credit card

Online banking

Automated paymentSlide6

Cheques

The use of cheques has dropped significantly in recent years, mainly because other methods are more

popular.

The UK Domestic Cheque Guarantee Card Scheme ended in June 2011 meaning

that anyone

in receipt of a cheque bears their own

risk.

Cheques are not expected to be a payment option by

2019.

Requires the clearing service which takes three

days.Slide7

The features of a chequeSlide8

The features of a cheque

(Continued

)

Cheque number

that identifies the cheque, in this case

914234.

Sort code – that identifies the branch, in this case

09-07-99.

Account number – that identifies the account with the bank, in this case

058899.

The counterfoil – on the left, filled in and retained in the cheque book for

reference.

The signature of the drawer – the person who is paying the money

out.

The name of the payee – to whom the cheque is

paid.Slide9

Cheque crossings

A cheque can be further safeguarded using a specific crossing as shown

.

This ensures that the cheque can only be paid into the name of the payee

given.Slide10

Cheque endorsements

If a cheque has no

crossing,

it can be endorsed – transferred over to someone else and paid into their

bank.

To endorse a cheque, the current owner would write the words ‘Pay (name of the recipient) or order’ on the reverse of the cheque and sign beneath

this.Slide11

Clearing a cheque

The transmission and settlement of a cheque requires the clearing service, which can take three days:

Day 1 – Cheques are processed by the bank into which they were paid and information is sent electronically to the clearing

centre.

Day 2 – The cheque is delivered to an Exchange

Centre.

Day 3 – Bank staff review the cheque and decide whether to authorise

payment.Slide12

Debit cards

Introduced in

1987.

Generally have an ATM function, cheque guarantee facility and act as a debit

card.

Can allow the holder to get cash back at a

checkout.

Accounts for 70% of all inter-bank remote banking

payments.Slide13

Credit cards

Introduced in

1966.

Can allow up to 30 days of

interest-free credit.

Use of debit cards now vastly exceeds the use of credit

cards.

Like cheques, credit card use is likely to decline but will remain an option for

payment.Slide14

Online banking

A

twenty-first-century phenomenon.

Offers a 24/7 facility for:

Balances to be

checked.

Standing orders or direct debits to be

created.

Funds to be

transferred.Slide15

Automated payments

Introduced in

1967.

Originally called

BACS.

Now the most common type of automated payments are either:

Direct

debits – where the amount is

specified

by the

payee

and

can change.

Standing

orders – where the amount is

specified

by the payer and is

fixed.Slide16

Types of account

Current account:

Used for regular payments in and out

Comes with a cheque book, pay-in

book

and ATM/debit/cheque

guarantee card

Earns little

interest.

Deposit

account:

Generally earn more interest

Not intended for accessing money on a regular

basis.Slide17

Pay-in slips

To pay money into an account, a pay-in slip is

used.

When the payment is into an account held in a different bank, the form is called a bank giro

credit.

Full details of the cash and/or cheques being paid in are given and the slip is handed in at the bank

counter.Slide18

Pay-in slips

(Continued

)Slide19

Learning outcomes

You should

now have learnt:

That the banking sector has been revolutionised by the developments in computers and information technology over the last 40

years

That where previously payments could usually only be made by cash or cheque, there is now a wide range of alternatives, ranging from plastic cards to direct debits and direct transfers into bank

accountsSlide20

Learning outcomes

(Continued

)

That the use of cheques is falling but that they are still a very common form of payment in

business

How the credit card payment system

operates

That cheque clearing is the way in which a cheque goes through the banking system and is credited to its rightful owner and charged against the drawer’s bank

accountSlide21

Learning outcomes

(Continued

)

That it usually takes three days for a cheque payment to reach the account of the

payee

That a debit card payment will reach the account of the payee

immediately

That cash is still the most common form of medium for

payments

That holders of a current account will normally be issued with a cheque book and a multiple use plastic card incorporating a cheque guarantee card, debit card and ATM

cardSlide22

Learning outcomes

(Continued

)

How

to write a

cheque

That

crossings on cheques indicate

that they must

be banked before cash can

be collected for them

That

special crossings on cheques act as

instructions to the banker, and are usually used

to ensure that the cheque cannot be

used

by anyone other than its

rightful ownerSlide23

Learning outcomes

(Continued

)

That

cheque endorsements enable the

rightful

owner of the cheque to give it to

someone else

How

to complete

a

bank pay-in

slip

How

to complete a bank giro

credit