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Topic: Money and Finances F1.1 – Methods of Payment

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Ontario Curriculum Expectation:

4.F1.1 identify various methods of payment that can be used to purchase goods and services.


Read the Following Selection

Read the following selection, or click on the play button below to listen aloud.

Methods of Payment

Contactless Payment

Contactless payment is one method of secure payment that is quick and easy. This method isn’t limited to just credit and debit cards, and many mobile devices such as smartphones, key fobs, smart watches, and smart cards use contactless payment. You simply tap the device on a terminal that allows it, like the payment machine at a store.

smartphones, cards, and other devices can use contactless payment

Advantages

Disadvantages

• Quick and easy

• Compatible with many different devices

• Safe and secure

• Purchase limit (usually $100)

• Can still be used if the card is lost or stolen

• Not all stores have the technology that accepts it

Cash

Cash is a form of payment that can be used anywhere and is accepted by any business. It does not have any additional fees to use.

Canadian cash

Advantages

Disadvantages

• Accepted everywhere

• No extra charges to use/keep

• Can help save money by limiting how much you can spend

• It takes up more space in your wallet and can become bulky

• Not as secure so if you lose it it is gone forever

• Certain large purchases can be difficult to do with cash

Cheques

A cheque is a piece of paper that transfers the funds from the person who wrote the cheque to the person they want the money to go to.

a cheque

Advantages

Disadvantages

• More convenient and takes up less space than cash

• Payments can be canceled if needed

• You don’t have to worry about counting an amount incorrectly

• Cheques can be written at any time

• Depositing a cheque can take time

• People without bank accounts cannot write or deposit cheques

• Purchasing checkbooks costs money

Debit Cards

A debit card is a payment method that is similar to a credit card, but it takes the funds out of your bank account immediately.

debit cards can look similar to credit cards

Advantages

Disadvantages

• Can be used to make purchases online and in store almost everywhere

• They are secure as you need a PIN to withdraw money from an ATM

• You know exactly how much you can spend

• Some banks have you pay fees or limit the use of a debit card

• If lost, someone can make small purchases using contactless payment

• Some places put a hold on your money to ensure you have enough to pay

Credit Cards

A credit card is a payment method that allows you to use “credit” to purchase things before you need to pay for them. The bank pays for your purchase and you promise to pay them back.

many companies offer many different credit cards

Advantages

Disadvantages

• You can still make purchases even if you don’t have the funds right away

• Building good credit is very important

• You can earn rewards with some credit cards like cash-back

• It is convenient and can be used online and for large purchases

• High-interest rates if you don’t pay back in time means you pay even more

• Some credit cards have annual fees to own

• You can put yourself in debt if you are unable to pay off what you owe

E-Wallets

An e-wallet is a digital wallet on your smartphone or similar device that stores the payment information for different payment methods such as debit cards that can be used to quickly and easily make purchases.

devices can keep all your payment information in one place

Advantages

Disadvantages

• Convenient and takes up less space as you don’t need to carry a wallet

• Safe and secure as no PINS are seen while making a purchase

• Everything can be done with just one device

• Some smaller vendors may not be able to accept e-wallet payment

• If your device breaks or dies you will not be able to make purchases

• You may be charged a fee to process payments

Gift Cards

A gift card is a pre-paid money card that can be used only at the store or vendor it was purchased from.

you can get a gift card from many businesses and vendors

Advantages

Disadvantages

• They are a good substitute for using cash or credit cards

• They can help you control your spending

• They make great presents

• Can only be used at the place it was issued for

• You may be charged an inactivity fee

• If there is a small amount leftover it complicates the transaction

 

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