Payments and its types are explained here

1. PAYMENT
PAYMENT
By,
RAJIV. A

2. PAYMENT
MEANING:
The most primitive form of payment is
Barter.
HISTORY:
A payment is the transfer of an item of value from one party to another in
exchange for the provision of goods, services or both, or to fulfil a legal
obligation.
The direct exchange of goods and services for other goods and
services.

3. And a few others do not
Few involves
cash
You Make hundreds of payments every year
But there is an increasing number of
times when you pay with methods
that does not involve cash.
OVERVIEW PAYMENT

4. You’re at a restaurant, and pay by a debit or credit card;
You send demand draft to your
brother;
You issue a cheque;
You Make an online Payment via direct bank debit
to purchase railway tickets.
Examples: PAYMENT

5. Payments Card-based
Payments
Involves instruments such
as Cheques and Demand
Draft
Involves instruments such
as Debit and Credit Cards
Includes ECS,
NEFT, RTGS
TYPES OF
PAYMENTS:
PAYMENT

6. PAPER-BASED
PAYMENTS:
Paper based payments include Cheques and Demand
Draft.
First let us understand a few terminologies before
proceeding forward.
Payee: A person to whom money is paid or is to
be paid.
Payer: A person who pays.
Drawer: One that draws an order for the payment
of money.
Drawee: The bank or other financial institution
where the cheque can be presented for payment.
PAYMENT

7. CHEQUE:
A Cheque is a payment instrument in a specified format, using
which, the payer instructs his bank to allow a debit from his
account.
PAYMENT
It is drawn on a specified banker (i.e., it cannot be drawn on
‘any bank’).

8. 1
2
3
4
5
6
7
1) Drawee, the financial institution where the cheque can be presented for
payment
2) Payee
3) Date of issue
4) Amount in numbers
5) Amount in words
6) Signature of drawer
7) Account Number
SAMPLE:
PAYMENT

9. TYPES OF
CHEQUE:
CHEQUEBEARER
CROSSED
SELF
POST-
DATED
STALE
PAYMENT

10. TYPES OF CHEQUE:
Bearer /Open /Uncrossed Cheque: The issuer of the cheque
would just fill the name of the person to whom the cheque is
issued, writes the amount and attaches his signature and nothing
else.
Self Cheque: A self cheque is written by the account holder as
pay self to receive the money in the physical form from the
branch where he holds his account.
Crossed /Account Payee Cheque: The issuer specifically
specifies it as account payee on the left hand top corner or simply
crosses it twice with two parallel lines on the right hand top
corner.
PAYMENT
Post dated cheque: A PDC is a form of a crossed or account
payee bearer cheque but post dated to meet the said financial
obligation at a future date.
Stale Cheque: If a cheque is presented for payment after three
months from the date of the cheque, it is called as a stale cheque.
A stale cheque is not honoured by the bank.

11. PAYMENT
Demand Draft is a cheque that contains an order of one branch of
a bank (Drawer branch) directing another branch of the same bank
(Drawee branch) to pay on demand a certain sum of money to a
specified beneficiary (Payee).
DEMAND
DRAFT:
SAMPLE:

12. PAYMENT
CARD BASED
PAYMENT:
The card is made out of plastic, the payment of instruction is
electronic. When an individual swipes a card and keys in their
PIN, an electronic authorized payment instruction is created.
The instruction to pay is created electronically, unlike in a cheque
where the instruction to pay is in a specific paper format.
The payment of instruction is electronic, however it has been put
into a different head to simplify.

13. PAYMENT
TYPES OF CARD-BASED
PAYMENT:
DEBIT
CARD
CREDIT
CARD
CARD-BASED
PAYMENT

14. DEBIT CARD:
PAYMENT
An electronic card issued by a bank which allows the bank’s
clients access their account to withdraw cash or pay for goods and
services.
Ravi uses his debit card to buy an air ticket of rupees
4000. He swipes his card and enters his PIN. The
bank(called the ‘Issuer’ or ‘Issuing Bank’) pays the
airline’s (merchant’s) bank on his behalf, after first
debiting his account.
EXAMPLE:
Personal Identification Number(PIN) is a
numeric password shared between a user and a
system, that can be used to authenticate the
user to the system.

15. CREDIT
CARD:
PAYMENT
A credit card allows the cardholder to pay for goods and services
based on the holder's promise to pay for them.
EXAMPLE:
Ravi uses his credit card to buy an air ticket of rupees
4000. In case of credit card, the bank(called the ‘Issuer’
or ‘Issuing Bank’) pays the airline’s (merchant’s) bank.
It does not debit his account, but records it as a loan
given to Ravi and will charge interest on him if he
doesn’t pay before the due date.
The issuer of the card (Issuing Bank) creates a revolving account and
grants a line of credit to the consumer (or the user).

16. ELECTRONIC
PAYMENT: PAYMENT
In Electronic Payments, there is no physical payment
instrument.
ECS
NEF
T
RTG
S
Electronic
Payments
TYPES OF ELECTRONIC
PAYMENT:
The instructions are purely processed electronically, with the
value passing from one bank account to another bank account.

17. ELECTRONIC CLEARING
SERVICE(ECS):
ECS is an electronic mode of payment / receipt for
transactions that are repetitive and periodic in nature.
PAYMENT
EXAMPLE:
Ravi makes monthly payments to Idea Cellular, his cell
phone service provider. He can give a onetime
authorization to Idea Cellular, authorizing them to debit
his account for the bill amount every month. Idea will
then request its bank to collect these payments in bulk
for all such customers.

18. NATIONAL ELECTRONIC FUND
TRANSFER(NEFT):
National Electronic Funds Transfer (NEFT) is a nation-wide
payment system facilitating one-to-one funds transfer.
PAYMENT
EXAMPLE:
Ravi makes monthly payments to Idea Cellular, his cell
phone service provider. He can choose to make payment
every month, electronically. For this he needs to have the
Idea Cellular’s bank, branch and account number.

19. REAL TIME GROSS SETTLEMENT(RTGS): PAYMENT
RTGS can be defined as the continuous settlement of funds
transfers individually on an order by order basis.
EXAMPLE:
Ravi cannot use the RTGS electronic payment system –
unless his bill crosses Rs 2 lakh. If it does, and he’s in a
hurry to transfer the funds, he can again give an
authorization to his bank as in the case NEFT. Idea
Cellular will get the funds immediately.
The RTGS system is primarily meant for large value
transactions. The minimum amount to be remitted through
RTGS is Rupees 2 lakh.

20. PAYMENT
EXERCISE: TRUE OR
FALSE
Payee is a person to whom money is paid or is to be paid.
A Stale Cheque is honoured by the bank.
TRU
E
FALS
E
The minimum amount to be remitted through RTGS is Rupees
1 lakh.
PIN is Personal Identification Number
NOTE: Please do not click in between the Exercise.

21. • http://en.wikipedia.org/wiki/Payment
• http://en.wikipedia.org/wiki/Cheque
• http://readanddigest.com/what-are-
the-different-types-of-cheques/
• http://www.investopedia.com/terms/d
/demanddraft.asp
• http://www.rbi.org.in/scripts/FAQView.
aspx?Id=55
• http://www.rbi.org.in/scripts/FAQView.
aspx?Id=60
• http://www.rbi.org.in/scripts/FAQView.
aspx?Id=65
SOURCE: PAYMENT

22. THANK YOU
PAYMENT