Completing transactions

IMPORTANT FACTS- Cash-like payments

Cheques

• cheques are used to send money or pay one-off bills.
  • You just fill in the details of your payment in your chequebook and give the cheque to the person you’re paying, or send it in the post.
  • They then pay it into their bank or building society account.
  • Cheques can take four-six working days to clear.
• Some businesses may not accept cheques as The Cheque Card Guarantee Scheme was withdrawn in 2011.
• Cheques should only be accepted from trusted sources as it is difficult to get the money if they are fake and/or the person doesn't have enough money in their account.

TRIVIA- Barclays is extending a system that allows customers to take photos of cheques on their smartphones and send them electronically. Read more about Cheque Photo System

Banker's Drafts

• Getting a banker’s draft is like asking a bank to write a cheque for you – you give them your money, and they give you a cheque for that amount to give to the person you’re paying.
• The good thing about banker’s drafts is that they do not bounce through lack of funds.
• They’re often used for larger amounts and when people or organisations wouldn’t accept a personal cheque.
• You normally need to give your bank 24 hours’ notice to prepare a banker’s draft and there is likely to be a charge for the service.
• Remember: banker’s drafts aren’t guaranteed against fraud. If you lose one or it’s stolen, someone else could use it fraudulently. Always ask your bank to check the draft – this can sometimes be done by telephone.

TRIVIA- cheques were going to be phased out by 2018 in the UK but there was such widespread criticism that they will now be in existence for 'as long as customers need them'. The full story is here. Cheque use fell to its lowest rate in 2007, when they accounted for only 6% of non-cash personal transactions.

IMPORTANT FACTS- Phone and online bank transfers

• You can transfer money directly to someone else's account on the phone or online. You just need their account number, sort-code and payment reference e.g. name or customer number
• It's fast - payments usually arrive the same business day
• It's usually free
• It's flexible and safe
• All account details should be double checked to make sure the right person receives the money. If the account details are correct and the money doesn't transfer then the banks will investigate for free.
• The system is called CHAPS (Clearing House Automated Payment System) and is how money is received directly from another personal account.
• Salaries, benefits and other payments are usually paid into accounts automatically either using CHAPS or BACS (Bankers' Automated Clearing Services)

TRIVIA- In the future, finger-vein technology may be used to allow people to access and authorise payments on their accounts. You can read more about it here.