Money and Instruments

of exchange and
payment.
MONEY
 What is Money ?

Money is anything that is accepted as

payments for goods and services and
repayment of debts. The invention of money
meant that people could sell their surplus of
goods for money and buy their needs
themselves. It became a medium of
exchange and made trade much easier.
Characteristics of Money
It must be durable It must be hard wearing

It must be acceptable people must agree to use it

It must be divisible possible to divide into smaller units if

necessary
It must be portable easy to carry
 Functions of Money

vA medium of exchange it makes exchange easier and barter

unnecessary
vA measure of value Money can be used to state the prices of goods
vA store of value. Money can be saved
vA standard for It can be earned at one time and spent
postponed payments
Instruments of exchange
Bill of
exchange
 Documentary credit

• Documentary credit
enables exporters to obtain
payment before the
documents of ownership
are release to the importer.
The importer arranges for
their bank to guarantee that
the payment will be made
when documents of title
are handed over.
Electronic Transfer

• Electronic Transfer is a
system used to transfer funds
electronically rather than
paper -based payment
methods for example credit
card and debit card
transactions and money
transfer.
Telegraphic money transfer;

•A telegraphic transfer is an electronic

method of transferring funds, utilized
primarily for overseas wire transactions.
Credit card
•Credit card facility is actually a loan given to
customers and thus it is repaid at an interest.
Credit card allows the card holder to make
payments by simply presenting the card to the
seller.
Debit card
•Debit card is issued against a customer’s
account balance. Debit card allow the card
holder to make payments by simply
presenting the card to the seller. The money
comes directly from the cardholders' account
Standing order
•Standing order is a convenient way to make
payments where a regular amount has to be paid
for example, regular, monthly instalments to
repay a loan or hire purchase agreement. The
bank carries out the account holder’s instructions
and automatically makes the payment via EFT
directly to the account to be paid on the precise
date
Direct debit

• Direct debit [variation of the standing order service]

The account holder instructs the bank [drawee] to
make regular payments on their behalf, they complete
and sign a form that allows someone else [the payee]
to withdraw amounts from their account at regular
interval. The amount may be varied by the payee for
example, if the regular payment involves an amount
that varies [utility bills].
Telebanking

Telebanking is facility provided by banks that allows bank

customers to simply use the telephone to get his banking
service done rather than visiting the bank. Services include,
checking account balance, transactions history and transferring
funds.
E-commerce
 E-commerce

•E-commerce (electronic commerce) is the

buying and selling of goods and services, or the
transmitting of funds or data, over an electronic
network, primarily the internet. These business
transactions occur either as business-to-business
(B2B), business-to-consumer (B2C), consumer-
to-consumer or consumer-to-business.
M-money/mobile money

•the use of a mobile phone in order to transfer

funds between banks or accounts, deposit or
withdraw funds or pay bills'. It further
encompasses using a mobile device to buy
products. This may be in a physical or
electronic setting.
Mobile wallet
•A mobile wallet is a virtual wallet that stores
payment card information on a mobile device.
Mobile wallets are a convenient way for a user to
make in-store payments and can be used at
merchants listed with the mobile wallet service
provider.
Cheques

•Cheques is an order from a bank

customer[drawer] to the bank[drawee] to make
payments to another person[payee].