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A debit card, also known as a check card or bank card is a payment card that can be used in place of cash to make purchases. The term plastic card includes the above and as an identity document. These are similar to a credit card, but unlike a credit card, the money for the purchase must be in the cardholder's bank account at the time of a purchase and is immediately transferred directly from that account to the merchant's account to pay for the purchase.
The International Bank Account Number (IBAN) is an internationally agreed system of identifying bank accounts across national borders to facilitate the communication and processing of cross border transactions with a reduced risk of transcription errors. An IBAN uniquely identifies the account of a customer at a financial institution. It was originally adopted by the European Committee for Banking Standards (ECBS) and since 1997 as the international standard ISO 13616 under the International Organization for Standardization (ISO). The current version is ISO 13616:2020, which indicates the Society for Worldwide Interbank Financial Telecommunication (SWIFT) as the formal registrar. Initially developed to facilitate payments within the European Union, it has been implemented by most European countries and numerous countries in other parts of the world, mainly in the Middle East and the Caribbean. As of May 2020, 77 countries were using the IBAN numbering system.
Dishonoured cheques are cheques that a bank on which is drawn declines to pay (“honour”). There are a number of reasons why a bank would refuse to honour a cheque, with non-sufficient funds (NSF) being the most common one, indicating that there are insufficient cleared funds in the account on which the cheque was drawn. An NSF check may be referred to as a bad check, dishonored check, bounced check, cold check, rubber check, returned item, or hot check. Lost or bounced checks result in late payments and affect the relationship with customers. In England and Wales and Australia, such cheques are typically returned endorsed "Refer to drawer", an instruction to contact the person issuing the cheque for an explanation as to why it was not paid. If there are funds in an account, but insufficient cleared funds, the cheque is normally endorsed “Present again”, by which time the funds should have cleared.
A transaction account, also called a checking account, chequing account, current account, demand deposit account, or share draft account at credit unions, is a deposit account held at a bank or other financial institution. It is available to the account owner "on demand" and is available for frequent and immediate access by the account owner or to others as the account owner may direct. Access may be in a variety of ways, such as cash withdrawals, use of debit cards, cheques (checks) and electronic transfer. In economic terms, the funds held in a transaction account are regarded as liquid funds. In accounting terms, they are considered as cash.
Cheque clearing or bank clearance is the process of moving cash from the bank on which a cheque is drawn to the bank in which it was deposited, usually accompanied by the movement of the cheque to the paying bank, either in the traditional physical paper form or digitally under a cheque truncation system. This process is called the clearing cycle and normally results in a credit to the account at the bank of deposit, and an equivalent debit to the account at the bank on which it was drawn, with a corresponding adjustment of accounts of the banks themselves. If there are not enough funds in the account when the cheque arrived at the issuing bank, the cheque would be returned as a dishonoured cheque marked as non-sufficient funds.
Wire transfer, bank transfer, or credit transfer, is a method of electronic funds transfer from one person or entity to another. A wire transfer can be made from one bank account to another bank account, or through a transfer of cash at a cash office.
A giro transfer, often shortened to giro, is a payment transfer from one bank account to another bank account and initiated by the payer, not the payee. The debit card has a similar model. Giros are primarily used in Europe; although electronic payment systems exist in the United States, it is not possible to perform third-party transfers with them. In the European Union, there is the Single Euro Payments Area (SEPA), which allows electronic giro or debit card payments in euros to be executed to any euro bank account in the area.
Cheque fraud, or check fraud, refers to a category of criminal acts that involve making the unlawful use of cheques in order to illegally acquire or borrow funds that do not exist within the account balance or account-holder's legal ownership. Most methods involve taking advantage of the float to draw out these funds. Specific kinds of cheque fraud include cheque kiting, where funds are deposited before the end of the float period to cover the fraud, and paper hanging, where the float offers the opportunity to write fraudulent cheques but the account is never replenished.
A traveller's cheque is a medium of exchange that can be used in place of hard currency. They can be denominated in one of a number of major world currencies and are preprinted, fixed-amount cheques designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.
A cheque, or check, is a document that orders a bank to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The person writing the cheque, known as the drawer, has a transaction banking account where the money is held. The drawer writes various details including the monetary amount, date, and a payee on the cheque, and signs it, ordering their bank, known as the drawee, to pay the amount of money stated to the payee.
In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. This process turns the promise of payment into the actual movement of money from one account to another. Clearing houses were formed to facilitate such transactions among banks.
An overdraft occurs when something is withdrawn in excess of what is in a current account. For financial systems, this can be funds in a bank account. For water resources, it can be groundwater in an aquifer. In these situations the account is said to be "overdrawn". In the economic system, if there is a prior agreement with the account provider for an overdraft, and the amount overdrawn is within the authorized overdraft limit, then interest is normally charged at the agreed rate. If the negative balance exceeds the agreed terms, then additional fees may be charged and higher interest rates may apply.
Authorization hold is a service offered by credit and debit card providers whereby the provider puts a hold of the amount approved by the cardholder, reducing the balance of available funds until the merchant clears the transaction, after the transaction is completed or aborted, or because the hold expires.
Remote deposit or mobile deposit is the ability of a bank customer to deposit a cheque into a bank account from a remote location, without having to physically deliver the cheque to the bank. This was originally accomplished by scanning a digital image of a cheque into a computer then transmitting that image to the bank, but is now accomplished with a smartphone. The practice became legal in the United States in 2004 when the Check Clearing for the 21st Century Act took effect, though banks are not required to implement the system.
A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt. The card issuer creates a revolving account and grants a line of credit to the cardholder, from which the cardholder can borrow money for payment to a merchant or as a cash advance. There are two credit card groups: consumer credit cards and business credit cards. Most cards are plastic, but some are metal cards, and a few gemstone-encrusted metal cards.
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
In financial transactions, a warrant is a written order by one person that instructs or authorises another person to pay a specified recipient a specific amount of money or supply goods at a specific date. A warrant may or may not be negotiable and may be a bearer instrument that authorises payment to the warrant holder on demand or after a specific date. Governments and businesses may pay wages and other accounts by issuing warrants instead of cheques.
Cheque truncation is a cheque clearance system that involves the digitization of a physical paper cheque into a substitute electronic form for transmission to the paying bank. The process of cheque clearance, involving data matching and verification, is done using digital images instead of paper copies.
Mobile payments is a mode of payment using mobile phones. Instead of using methods like cash, cheque, and credit card, a customer can use a mobile phone to transfer money or to pay for goods and services. A customer can transfer money or pay for goods and services by sending an SMS, using a Java application over GPRS, a WAP service, over IVR or other mobile communication technologies. In India, this service is bank-led. Customers wishing to avail themselves of this service will have to register with banks which provide this service. Currently, this service is being offered by several major banks and is expected to grow further. Mobile Payment Forum of India (MPFI) is the umbrella organisation which is responsible for deploying mobile payments in India.
Digital identity is used in Australia by residents to validate who they are over digital media, such as over the Internet.
References
- ↑ "BB&T - Check Verification". Archived from the original on 2010-01-04. Retrieved 2010-01-28.
- ↑ "About Transworld Systems". Archived from the original on 2001-10-07.
- ↑ "Negative Database Defined". Archived from the original on 2010-01-27. Retrieved 2010-01-28.
- ↑ "Check Declined / Check Card on Same Account Goes Through". Archived from the original on 2011-07-17. Retrieved 2010-01-28.
- ↑ "Archived copy". Archived from the original on 2022-12-08. Retrieved 2010-01-28.
{{cite web}}: CS1 maint: archived copy as title (link) - ↑ "NetFamilyNews".
- ↑ "Bank Account and Check History - MicroBilt Corporation". Archived from the original on 2016-04-03. Retrieved 2010-01-28.
- ↑ "Privacy Policy :: Credit Union of Denver". Archived from the original on 2010-01-03. Retrieved 2010-01-28.
- ↑ "Archived copy" (PDF). Archived from the original (PDF) on 2007-02-02. Retrieved 2010-01-28.
{{cite web}}: CS1 maint: archived copy as title (link) - ↑ "How Can You Tell if a Check is Going to Bounce?". Archived from the original on 2010-03-24. Retrieved 2010-01-28.