AAT BKCL Banking Terminology

Question	Answer
Cheque	A cheque is an instruction in writing, signed by the bank's customer (who is paying the money) telling the bank to pay an amount to a named person or business
Debit card	A card which can be used for purchases and cash withdrawals; payment is taken from the bank account on the next working day
Prepayment card	A card which can be purchased and is given a 'balance to spend' - it can be topped up when the balance runs low
Credit card	A card issued on a 'buy now and pay later' basis - payment is made monthly in full or in part on receipt of a statement
BACS	Bankers Automated Clearing Services - a the system set up by the banks to make computer-based direct payments between bank accounts
Standing order	Regular (fixed date, same amount) payments, set up with the bank by the business sending the money - they can be processed by BACS or by Faster Payments
Direct debit	Variable date and amount BACS payments, set up by the organisation receiving the payments
Faster Payments	Same-day payments (usually 2 hours) between banks - the instructions can be given at the bank branch, by telephone or online
CHAPS	High value, same-day payments sent through the banks' computer systems (Clearing House Automated Payment System) - they cannot be cancelled after they have been sent
Bank draft	A paper-based document (similar to a cheque) issued by a bank - as good as cash - used for high-value purchases. it cannot be stopped or cancelled after it has been issued

Resource summary

	Created by Adrian Kandes about 3 years ago