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In the commercial world, we seldom use cash in transactions. Different payment methods have been developed since the banking activities become more and more important in the modern society.
IntroductionIntroduction
Methods of Payment in Methods of Payment in Trade and Other Trade and Other
TransactionsTransactions
• Cheque
• Cashier order
• Bank draft
• Telegraphic transfer
• Autopay– Standing order– Direct debit– Letter of credit
(L/C)
1. Through Commercial Banks:
Methods of Payment in Methods of Payment in Trade and Other Trade and Other
TransactionsTransactions
• Postal remittance service
• PayThruPost service
2. Through Post Offices:
• Promissory note• Bill of exchange
Methods of Payment in Methods of Payment in Trade and Other Trade and Other
TransactionsTransactions3. Other Methods of Payment :
• Cash• Credit card• Debit card• Smart card
Components of a chequeComponents of a chequePayee’s name
Chq. stub
Cheng Siu Ming
Payt. Amt.
Payt. Date
Drawer’s signature/chop
chq. # Bank code
Branch code
A/C #
Safety Flexibility Convenience A proof of payment
Advantages of Using ChequesAdvantages of Using Cheques
Bearer cheque Order cheque Uncrossed cheque / Open cheque Crossed cheque:
General crossing Account payee only Not negotiable Not negotiable, account payee only
Types of ChequesTypes of Cheques
– Transfer to a third party– Types:
Blank endorsement Endorsement to order
Dates of ChequeDates of Cheque– Post-dated cheque– Stale cheque– Antedated cheque
EndorsementEndorsement
Reasons for Reasons for Not Honouring a ChequeNot Honouring a Cheque• Insufficient fund• Stale cheque• Post-dated cheque• No signature• Signature not matching the bank record• Not countersigned on alteration, etc.
Commercial Banks and Commercial Banks and Finance Companies in Finance Companies in
HKHK• Deposit-taking institutions:
– Licensed banks
– Restricted licence banks
– Deposit-taking companies
Comparison of Comparison of the Financial Institutionsthe Financial Institutions
HK$100,000 HK$500,000 No restriction4. Minimum
deposit amount
Only T/DOnly T/DAll3. S/A, C/A, T/D
account services
HK$25MHK$100MHK$150M2. Minimum paid-up capital
BankRestricted licenc
e bankBank1. Name
Deposit-taking companies
Restricted licence banksLicensed banks
Institution
Comparison
Comparison of the Comparison of the Financial InstitutionsFinancial Institutions
Hong Kong Monetary Authority9. Supervised an
d audited by
Restricted by the Banking Ordinance8. Regulations
Hong Kong Monetary Authority7. Licensing auth
ority
No restriction6. Interest rates
3 monthsNo restrictionNo restriction5. Min. deposit m
aturity
Deposit-taking companies
Restricted licence banks
Licensed banks
Institution
Comparison
Services of Commercial Services of Commercial BanksBanks
1. Accepting Deposits:– Savings account
– Current account
– Time deposit account
– Foreign currency account
Services of Commercial Services of Commercial BanksBanks
2. Granting Loans:– Overdraft– Personal loan– Business loan– Secured loan– Trade financing– Syndicated loan
Services of Commercial Services of Commercial BanksBanks
3. Remittance Services:–Bank draft / Demand draft–Telegraphic transfer
4. Other Services:– Automatic teller machine (ATM)– Money exchange– Trustee service– Safe deposit box– Gift cheque– Traveller’s cheque
Latest Development of Latest Development of Banking ServicesBanking Services
PhonebankingInvestmentconsultancy
service
All-in-onemonthly
statements
Internetbankingservices
• Major centre of foreign exchange• A strong presence of international financial
institutions• The second largest stock market in Asia• Good regulatory framework• As a window for Mainland China• The host of international meetings
The Position of HK in the The Position of HK in the International Financial International Financial
MarketMarket
• Favourable geographical position• Regulatory framework• Good communication facilities• Qualified workers for the financial sector• Economic factors
Factors Contributing to Factors Contributing to HK’s Role as HK’s Role as
a Famous Financial Centrea Famous Financial Centre