Procedures for Making Payment
The methods commonly used for making payment are:
- Bank transfer.
- Bank draft.
1. Payment by Cash:
Payments made by cash, are those goods or services generally acceptable in the country for payments. In Nigeria, the standard units of money, the naira, and kobo, are usually accepted as payment for goods.
Although risky to carry about, it remains the most common method of making payments, in many parts of the world.
2. Payment by Bank Transfer:
The bank usually facilitates payment, when instructions given to them by a customer is to transfer money, from one account to another account, for payment of goods and services.
To make a bank transfer, the person transferring the money will visit his or her bank, or the recipient’s bank, and fill out a form or bank teller, which shows the date, name of the bank where the payment is to be made, account number, name of the receiver, etc. He or she then proceeds to pay the money into the bank, and the bank will then credit the recipient.
3. Payment by Cheque:
Cheques are mainly used by current accounts and some special saving account holders, as a means of payment. It is a written order to a bank to pay a desired sum of money. A cheque can be made to oneself, or it can be made payable to another person or organisation.
A cheque can be open or crossed. An open cheque can be cashed over the counter at the bank, while a crossed cheque (with two parallel lines drawn across the payee’s name) cannot be cashed over the counter. It must be paid into a bank account.
Some reasons why cheques are dishonoured are:
- Insufficient money in the drawer’s account.
- If the drawer did not sign the cheque.
- If the drawer’s signature is irregular.
- If the cheque is post-dated.
- If the cheque is stale.
4. Bank Draft:
A bank draft, also known as a bank cheque, 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. It is automatically paid when presented at the bank.
Banks drafts are often used for larger amounts, and when people or organisations won’t accept a personal cheque. For example, when offering payment in a foreign country, a bank draft, backed up by the authority of the bank, will more likely be accepted, compared to a personal cheque.
E-payment is a system of paying for goods and services, through an electronic medium, without the use of cash or cheque.
There are different ways of paying or receiving money electronically, and they include;
a. Automated Teller Machine (ATM)
b. Point of Sale Switch (POS)