Means of payment

Materie:	Appunti
Categoria:	Inglese
Download:	70
Data:	07.06.2007
Numero di pagine:	3
Formato di file:	.doc (Microsoft Word)

Means of payment
There are several different means by which a person can make a payment to someone. Today a buyer can pay for goods in cash or by other methods of payment provided by the Post Office or the Banks.
Means of payment:
• Cash
• Post office Payments
• Bank Payments.

CASH
Cash payment is effected by banknotes and coins in circulation. Cash is provided by the State and in Britain it is provided through the Bank of England. Cash remains the normal method by which people pay for their purchases but commercial transaction are also made through other means of payment, such as cheques, drafts, bank transfers, etc.

POST OFFICE PAYMENTS
The Post Office provides convenient and safe methods of payment consisting of:
-Postage stamps which are accepted by some businesses but only in payment of very small amounts.
-Postal orders (vaglia postale) which are printed orders given by one post office to another to pay a sum of money to the person named on it (the payee-beneficiario). They are used for small amounts and can be purchased from any post office in the UK. To obtain them a small additional charge called poundage is to be paid.
-Money orders which are similar to postal orders and are used for larger amounts. They are officially known as inland money orders and are payable only in the UK.
-Telegraphic money orders which consist of orders transmitted quickly by telegraph to the Post Office nearest to the payee.

BANK PAYMENTS
Most transaction and settlements of accounts are carried out through the banking system. The principal instruments of credit dealt with by banks are:
• Cheques. Paying by cheque is not very common as it is a very slow method of payment. All cheques need to go through the international banking system before they receive credit and this may require a lot of time. In addition, the exporter may have to pay charges from his/her own bank.
• Bank Transfers (bonifico bancario). This is a simple system for making international credit transfers. The importer’s bank is told to pay a stated amount of money into the exporter’s bank account. (The money is taken from the debtor’s bank account and transferred to the creditor’s account). The bank debits the sum, plus bank charges, to the importer’s account. Bank transfers are usually sent electronically by SWIFT (the Society for Worldwide Interbank Financial Communications), a telematic system linking banks all over the world. Each current account holder is given swift code to process the transactions.
• Bank Drafts. (assegno circolare) An importer ask his/her bank to issue a draft, which is a type of cheque, drawn on a foreign bank. The importer then send the draft to the supplier who pays it into his/her bank account.
• Bills of Exchange. (cambiale) The Bill of Exchange is a document that orders a bank to pay a sum of money on demand or on a certain date to the company specified. There are three parties involved:
➢ The drawer - the company that orders the draft;
➢ The drawee – the company that receives the draft and who will pay
➢ The payee – the person to whom the payment is made, usually the same as the drawer

A draft can be:
➢ At sight: the buyer is required to pay before receiving the documents
➢ At a future date: the buyer accepts the bill and agrees to pay the amount in full the date specified on the draft.

• Letters of Credit. (lettera di credito) This method of payment is used for payments outside the European Union. It is an arrangement between a bank and its agency abroad, or between a bank in one country and a bank in another. It represents the safest method for the sellers since payment is guaranteed by a bank. There are two types of Letters of Credit:
➢ A Revocable Letters of Credit which may be changed or cancelled at any time.
➢ A Irrevocable Letters of Credit that cannot be altered without the consent of all the parties involved. However, if the overseas bank goes bankrupt the exporter will nit be paid.