In the commercial world, we seldom use cash in transactions. Different payment methods have been developed since the banking activities become more and more important in the modern society. Introduction

Methods of Payment in Trade and Other Transactions Cheque Cashier order Bank draft Telegraphic transfer Autopay –Standing order –Direct debit –Letter of credit (L/C) 1. Through Commercial Banks:

Methods of Payment in Trade and Other Transactions Postal remittance service PayThruPost service 2. Through Post Offices:

Promissory note Bill of exchange Methods of Payment in Trade and Other Transactions 3. Other Methods of Payment : Cash Credit card Debit card Smart card

Components of a cheque Payee’s name Chq. stub Cheng Siu Ming Payt. Amt. Payt. Date Drawer’s signature/chop chq. # Bank code Branch code A/C #

vSvSafety vFvFlexibility vCvConvenience vAvA proof of payment Advantages of Using Cheques

u Bearer cheque u Order cheque u Uncrossed cheque / Open cheque u Crossed cheque: General crossing Account payee only Not negotiable Not negotiable, account payee only Types of Cheques

–Transfer to a third party –Types:  Blank endorsement  Endorsement to order Dates of Cheque –Post-dated cheque –Stale cheque –Antedated cheque Endorsement

Reasons for Not Honouring a Cheque Insufficient fund Stale cheque Post-dated cheque No signature Signature not matching the bank record Not countersigned on alteration, etc.

Commercial Banks and Finance Companies in HK Deposit-taking institutions: –Licensed banks –Restricted licence banks –Deposit-taking companies

Comparison of the Financial Institutions HK$100,000 HK$500,000 No restriction 4. Minimum deposit amount Only T/D All 3. S/A, C/A, T/D account services HK$25MHK$100MHK$150M 2. Minimum paid-up capital Bank Restricted licence bank Bank1. Name Deposit-taking companies Restricted licence banks Licensed banks Institution Comparison

Comparison of the Financial Institutions Hong Kong Monetary Authority 9. Supervised and audited by Restricted by the Banking Ordinance8. Regulations Hong Kong Monetary Authority 7. Licensing authority No restriction 6. Interest rates 3 monthsNo restriction 5. Min. deposit maturity Deposit-taking companies Restricted licence banks Licensed banks Institution Comparison

Services of Commercial Banks 1. Accepting Deposits: –Savings account –Current account –Time deposit account –Foreign currency account

Services of Commercial Banks 2. Granting Loans: –Overdraft –Personal loan –Business loan –Secured loan –Trade financing –Syndicated loan

Services of Commercial Banks 3. Remittance Services: –Bank draft / Demand draft –Telegraphic transfer 4. Other Services: –Automatic teller machine (ATM) –Money exchange –Trustee service –Safe deposit box –Gift cheque –Traveller’s cheque

Latest Development of Banking Services Phonebanking Investment consultancy service All-in-one monthly statements Internet banking services

Major centre of foreign exchange A strong presence of international financial institutions The second largest stock market in Asia Good regulatory framework As a window for Mainland China The host of international meetings The Position of HK in the International Financial Market

Favourable geographical position Regulatory framework Good communication facilities Qualified workers for the financial sector Economic factors Factors Contributing to HK’s Role as a Famous Financial Centre