1. Payment Methods
By :
Naima Ashraf
Rimsha Iqbal

2. PAYMENT METHODS
Instruments which are used by the account holders.
Include paper based, electronic based or combination of
both.
CHEQUE :
• Most popular payment instrument.
• Order given by a customer to meet his payment
obligation to the banker.
Section 6 – a cheque is a bill of exchange drawn on a
specified banker and not expressed to be payable
otherwise than on demand.

3. CHARACTERISTICS :
I. It must be drawn on a banker and
II. It must be payable on demand.
TYPES OF CHEQUE:
1. Open cheque: payable in cash
2. Crossed cheque: a cheque with two parallel lines on it,
which is payable into a bank account.
3. Dating a cheque: there is no legal requirement that a
cheque should be dated. A cheque is not invalid only for
a reason that it is ante dated or post dated.

4. Parties to cheque:
• Drawer: the account holder
• Drawee: to whom the cheque is drawn i.e. bank.
• Payee: to whom a cheque is made payable
 Component of a bill of exchange (includes a cheque)
 Unconditional order: it does not contain request for payment. A
cheque containing conditional order is dishonored by the bank.
 It must be in writing: writing includes printing as well. Oral orders are
not considered as cheque.

5.  Addressed by one person to another: the name of the addressee
person must appear on the instrument itself. The instrument drawn
by a banker upon itself is not a bill of exchange.
 It must be signed by a person giving it: an unsigned cheque will be
refused by the bank for payment.
 Pay on demand: a cheque is always payable on demand.
 Amount certain in money: cheque must be for money only. The
amount must be in words and figures.
 Payable to specified person or bearer: The name of the payee must
be written on the cheque or it can be made payable to bearer.

6. Payment
In Due
Course
Proper Form
Not
Crossed
Drawn On The
Particular
Branch
Payable To
Bearer Or
Order
Not Be
MutilatedNo
Unauthorized
Material
Alterations
Sufficient
Funds
Available
Not Be Post
Dated Or Stale
Presented
During
Banking Hours
No Legal Bar
On Payment

7. Protection
To The
Paying
Banker
Protection
To The
Collecting
Banker
Negotiation
Of
Cheques

8. Signature
forgery refers to the
act of falsely
replicating
the signature of
another person
Payment Of
A Cheque
Under
Forged
Signatures

9.  Dishonor of a cheque: when there is not enough money
in the account.
Shall be punishable with imprisonment which may extend
to one year or with fine or with both.
 Credit card: allowing the holder to purchase goods and
services on credit.
Charge interest, used for short term finance
Three contracts involve in the transaction
1) Issuer and card holder
2) Issuer and dealer
3) Dealer and card holder

10.  Charge card: does not charge interest, higher spending
limits.
Require user to pay his/her balance in full upon the receipt
of the statement.
 Cheque card or chaque guarantee card: issued by a
bank to guarantee the honoring of cheques upon a
stated amount.
 Debit card: allows the customer to purchase goods and
services. Charge no interest.
 Cash card or ATM card: used by a customer to obtain
cash from an automated teller machine.
Personal identification number (PIN)
PIN(secret code) is the authority for the transaction

11. 1. Payment Methods
2. Cheque
i) Open Cheque
ii) Crossed Cheque
3. Components Of A
Bill Of Exchange
4. Payment In Due
Course
5. Protection To The
Paying Banker
6. Protection To The
Collecting Banker
7. Negotiation Of
Cheques
8. Payment Of A
Cheque Under
Forged Signatures
9. Dishonor Of A
Cheque
10.Credit Card
Charge Card
Cheque Card
Debit Card
Cash Card
SUMMARY