Different Types of Payment Methods
A payment happens when an individual or company transfers an item of value (such as cash or stocks) to another individual or company in exchange or trade for services, goods, products, or to complete a required legal obligation. The “payer” is the individual or business that makes the payment while the “payee” is the person or company that receives the payment.
The oldest and probably the simplest form of payment are termed as barter. In a barter system, a good or service is exchanged for either a service or a product. With the advancement in technology and influence of modernization payment methods have evolved into even faster methods such as checks, debit cards, credit cards, and bank or wire transfers. Big businesses have no limits to form of payments; some of them use stocks or other complex arrangements for their payment methods. The following are the different types of payment methods:
A check which is also known as “cheque” (in British English) is also a form of a cashless payment method. The process is done first by a “drawer” (individual who is the payer) who writes a check to a “payee” (individual who receives the payment) to pay for goods or services availed, and then the “drawee” (entity or business) is in charged for facilitating the transfer of the money.
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Also known as “bank cards” or “check cards”. An individual that owns a debit card is known as a cardholder. A cardholder has a number of privileges because if owning a debit card, one of those privileges is electronic access to their bank accounts which means that they can use their cards (instead of cash) as a form of payment when making purchases for goods, products, and services.
They function like debit cards wherein an individual has electronic access to his/her bank account and can use their cards as a form of payment when making purchases. The major difference is that when using a credit card an individual can pay for goods, products, or services at another given date or time which is based on the cardholder’s promise to pay them.