Hello, welcome you to this blog Post on means of bank payment. I will be writing on the various forms or means of bank payment in commerce. Hope you will enjoy the class.
“Discover the various means of bank payment, from traditional cash and cheques to modern digital options like UPI, mobile banking, and digital wallets. Explore secure, fast, and convenient payment methods for personal and business use.”
Introduction
In today’s fast-paced world, banks have become integral to financial transactions, providing individuals and businesses with a wide range of payment options. From traditional methods to modern digital solutions, the means of bank payments have evolved significantly, offering convenience, speed, and security. Let’s explore the different ways banks facilitate payments and how they impact our financial lives
Table Of Contents
- Forms or means of bank payment
- The advantages of e-banking
Occasionally personal cheques may not be readily acceptable in business transactions due to lack of trust. On such occasions special means of bank payment will be adequate to effect payments. They include the following:
Forms or Means of Bank Payment
1. Bank drafts: This is a cheque which a bank official draws on the banks deposits in another Bank. The bank draft is sold on commission to members of the public not minding wether such a person has a current account with the bank or not. Means of transferring money (huge amount) from one place to another.
2. Bank certified cheque: A cheque on which the bank has written it’s guarantee that the cheque will be paid. To ensure that the amount written on the cheque is paid, the bank immediately draws out the amount from the depositors account.
3. Cashier cheque: Cashiers cheque is a forms or means of bank payment. This is a cheque that is drawn on the banks own fund. Bank usually issue cashier’s cheque to cover its expenses and they may also sell the cashier’s cheque and commission to members of the public.
4. Bank money order: These are mainly for payment under 3.100.00. They are mostly used by people who do not have current account.
5. Travelers Cheque: This is a more convenient way of carrying money than the bank draft and cashier cheque. It is always sold in denomination of 310, 320, 350, etc. Provision is made for two spaces where the Travelers could sign. He signs one when he buys the Cheques and the other in the presence of the person cashing the traveler’s cheque.
6. Automated teller machine (ATM) card: This is a computerised machine that enables or permit bank customers to gain access to their account with a magnetically encoded plastic card and a code number. It enable the customer to transact business anytime and perform several banking operations without the help of a Teller, such as to withdraw cash, make deposits, pay bills, obtain bank statements and effect cash transfer.
7. Western Union: Another means of bank payment services is the Western Union. The Western Union money transfer is a financial services and communication company based in the United States and have his operation offices all over the world. Western Union was the best known US company in the business of exchanging telegrams. It also specializes in transferring certain amount of money usually in dollars from one country to another. Such fund transferred are usually collected by customer through their commercial Banks.
8. Money Gram: MoneyGram international Inc. Is a money transfer company based in the United States of America with his headquarters in Dallas, Texas. They have regional and local offices around the world. MoneyGram businesses are divided into two categories, consisting of a (A) global fund transfer. (B) Financial paper products. The company services individuals and businesses through a network of agents and financial institutions who aided customers either in sending or receiving funds throughout the world.
9. Bank Transfers: Another forms of Bank payment is the bank transfer. Bank transfers are electronic payments that enable funds to be sent from one account to another. This method includes several options:
- NEFT (National Electronic Funds Transfer): Processes transactions in batches, suitable for non-urgent transfers.
- RTGS (Real-Time Gross Settlement): Enables real-time and high-value transfers
- .IMPS (Immediate Payment Service): Offers instant transfer capability, available 24/7.
- SWIFT Transfers: Used for international payments, facilitating transactions between banks globally.
10. Payment through computer: Computer and bank payment are the way money is being paid through the bank by way of using computer system. All customers data are already programmed and save in the computer and with the help of the computer, money is withdrawn in the banking hall by an individual or customer in any part of the world.
11. Online Payment Gateways: Payment gateways like PayPal, Stripe, or Razorpay work as intermediaries between banks and merchants. They allow customers to pay for goods and services securely through debit cards, credit cards, or net banking.
12. Mobile Banking and Apps: This is one of the fastest means of Bank payment, Mobile banking apps allow users to make payments directly from their smartphones. These apps often include features like bill payments, fund transfers, and mobile recharge. Banks are leveraging technology to make transactions seamless and user-friendly.
13. Credit and Debit Cards: This is another means of Bank payment. Debit cards enable users to make payments directly from their bank accounts, while credit cards allow them to borrow money up to a specified limit. Both are widely used for in-person and online purchases, offering convenience and additional security features like PINs, OTPs, and fraud detection systems.
14. Electronic banking E-banking): Electronic banking also called (ebanking) or e-banking or online banking) Is a forms of bank payment service that allows customers to use some forms of computer to access their account either for specific information or possibly conduct transactions from a remote location such as home or at the workplace. It enables customers to have access 24 hours to his or account through the automated teller machine (ATM) or direct the deposit into account without going through the traditional cheques and order paper transactions.
Online banking is the practice of making bank transactions via the internet. It will give you an excellent opportunity to bypass the time consuming paper-based aspect of traditional banking in order to manager your finances more efficiency.
Advantages of e-banking
Online or internet banking provides the following advantages:
- It helps to pay bills
- It helps to schedule payments in advance
- It helps to transfer funds
- It helps to manage all your account in one place
- It helps to order travelers Cheque
- It also increase your overdraft
- It helps to order a cheque book
- It helps to view up to the minutes account statement and balance.
- It views automatically updated spending report.
- It tracks your payment history.
- And it helps to get alerts.
The means of bank payments have diversified to accommodate the growing need for convenience, speed, and security. From traditional cash and cheques to innovative solutions like UPI and digital wallets, the options are tailored to meet the demands of various users. By embracing these payment methods, banks are playing a vital role in shaping the future of financial transactions.
As technology continues to evolve, the landscape of bank payments will likely become even more dynamic, paving the way for smarter, faster, and safer solutions. Which of these payment methods do you prefer and why? Let us know in the comments!
Quick Revision Questions
- List and explain 10 forms or means of bank payment
- What are the advantages of e-banking?