Cheque is an order by the drawer to a bank to pay on demand a specified sum of money to the person named as a payee on the cheque. This order can only be made by the current account holder.
Features of a Cheque are;
i. It is an order.
ii. The amount must be specified.
iii. It must be in writing.
iv. The name of the payee must be written.
v. Amount must be stated in words and figures.
b. Bank Drafts:
It is a sure guarantee of payment which is issued by a commercial bank for payment to a specified payee at another bank. They are cheques paid by a bank to another bank or a particular person or an organization. It is always used when the creditor is not willing to accept a personal cheque.
c. Standing Order:
It is an instruction given to a bank by an account holder to make regular payments on his behalf e.g. insurance premium, electricity bill, water rate, etc.
d. Credit Transfer:
This is a system of transferring funds from one account to another. It involves payments made on instruction to a bank to credit customers of the same or other banks.
e. Credit Cards:
Reputable stores issue these cards to their approved customers to buy goods on credit and make payments monthly through their banks.
f. Direct Cards:
This occurs when a creditor is authorized to ask for payment from the customers bank. Here, the bank debts the account of a customer with a sum of money at instance of a creditor.