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Published byReynold Watson Modified over 9 years ago
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Five Types of Payment Systems Cash Checking Transfer Credit Card Stored Value Accumulating Balance
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Legal tender defined by a national authority to represent value Instantly convertible into other forms of value without a third party Normally used for small transactions Cash
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Cash (continued) Positives: Portable, gives consumer instant purchasing power, and virtually free Negatives: easily stolen, limited to smaller transactions, provides no float
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Checking Transfer Funds transferred directly via a signed draft or check from a consumer’s checking account to a merchant They can be used for both small and large transactions
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Positives: Provide users with some float, hard to steal Negatives: they’re not anonymous and require a third party Checking Transfer (continued)
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Credit Card An account that extends a line of credit to consumers and allows them to purchase items now and pay later Issuing banks issue cards and process transactions Processing centers handle verification of accounts and balances
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Stored Value An account where funds are deposited and withdrawn as needed Examples: prepaid cards, gift certificates, debit cards, and smart cards
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Accumulating Balance Accounts that accumulate expenditures and to which consumers make period payments Examples: phone and utilities
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Most Common Payment Systems (Based on Number Of Transactions )
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Most Common Payment Systems (Based on Dollar Amount)
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Online Merchants’ Actual and Preferred Online Payments
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