The Mobile Wallet

Mobile Wallet:A digital container running on a smartphone that is designed to keep together and manage use of payment cards,tickets,loyalty cards,vouchers and receipts.

Smart card:A plastic card of the size of a credit card with integrated circuits built in and chips embedded in the plastic.Electronic cash(e-cash) is provided with cards filled electronically at a bank's cashpoint or bought pre-filled or filled by using the telephone.

Uses of Smart card:

It is used in fare collection in mass transit systems,road toll collection,personal identification,driving licences and patient card schemes as well as SIM cards(Subscriber Identity Module) in mobile phones.

Example of Mobile Wallet:

The introduction of ApplePay by Apple Inc allows users of Iphones and other devices to make payments from their digital or mobile wallets and to keep payment information private from retailers.

Trends in Banking

Mobile banking:Banking using a mobile device such as tablet or smartphone.
Digital banking:It is technology that will record ,process,receive,generate,display and transmit information almost instantaneously.
Advantages to customers of mobile and digital banking:
1.Improved services are available 24/7.
2.Smart banking,allowing for all transactions to be completed from a variety of devices.
3.Feeling valued as customers.
4.New client services.
5.Follow up services.
6.Lower charges for banking services.
7.Faster access to money
8.Saves travel to bank
Advantages to bank:
1.Lower operating costs.
2.Fewer errors.
3.Smaller no. of branches
4.Concentration of specialist services.
5.Cheaper staff.
6.Customer satisfaction
7.May attract new customers.

Debit Card

Debit Card:It is a plastic card that allows customers to make instant payments of goods and services.
Advantages to cardholder:
1.Easy to carry
2.Reduces risk of theft.
3.Can use it to obtain cash when shopping.
4.Helps to control spending.
Advantages to retailer:
1.Payment guaranteed.
2.Instant payment.
3.No risk of bad debts.
Disadvantages to cardholder:
1.Need to have enough funds restored in current account.
2.Can be stolen.
3.No credit facility.
Disadvantages to retailer:
1.Commission to bank reduces profits.
2.Expensive equipment is required to read debit cards.
3.Turnover may not be increased.

Cheques

Cheque:A cheque is an order to pay the person named On it.
Parties to a cheque:
Payee:Person named on the cheque to whom it is payable.
Drawee:The bank on which the cheque is drawn.
Drawer:The person who signs and writes the cheque.He has current account in the drawee bank.
Open cheque:It is cashable over the counter of the drawee bank.
Bearer cheque:A cheque which is payable to the  holder and need not be endorsed.
Order cheque:A cheque which is payable to the order of a specific person .It must be endorsed.
Crossed cheque:It cannot be cashed over the counter but must be paid into an account.
Dishonoured cheques:The cheques which are refused payment by bank when presented due to some faults.
Post-dated cheques:Cheques that are dated ahead
Stale cheques: Six or more months old cheques.
Traveller's cheques :This is a safe way of carrying money when travelling.They are cashable at hotels,restaurants and banks and traceable and recoverable if lost.

Banking

Direct debit: It is a bank service that enables variable amounts to be paid from a bank account at varying times when requested by the creditor.
Advantages to accountholder:
1.Easy to make variable payments.
2.Prompt settlement of debts.
3.Some businesses offer incentives to use direct debit.
4.Saves having to remember payments.
5.Saves time and cost of writing cheques and posting payments.
Advantages to business:
1.Reduces risk of bad debts.
2.Better cash flow
3.Saves administrative costs.
Disadvantages to account holder:
1.Loss of personal control over account.
2.Danger of becoming overdrawn.
3.Mistakes may be made so that too much or too little money is taken from the account.

Consumer Credit

Credit:It is principle of buying now and pay later
Types of Credit:
Store Cards:These are plastic cards provided to their customere by latge retailers.They encourage shoppers to use particular stores.They encourage consumer loyalty.
Advantages to consumer:
1.Buy without cash
2.Interest-free credit if paid off each month
3.Incentives and additional services such as gifts and delivery.
4.Used in every branch of a particular store.
Disadvantages to consumer:
1.Overspending.It encourages impulse buying and irrational buying.
2.Interest has to be paid if all of the amount is not paid in one month.Some stores charge high interest rates.
Advantages to retailer:
1.Higher turnover
2.Consumer loyalty
Disadvantages to retailer:
1.Higher administrative costs as a credit control department must be set up.
2.Delay in payments.Risk of bad debts
Credit cards:These are plastic cards showing the cardholder's name, 16-digit account number, issue date, expiry date on the front side and signature of cardholder and security code on backside.Two most well known types are MasterCard and Visa.Businesses sign up with credit card company to be ablebto take payments on credit.
Advantages to cardholder:
1.Instant credit
2.Easy to carry
3.Free credit for at least one month.
4.Can be used in many different outlets e.g shops,hotels,garages in many countries.
5. May offer 0%interest for up to 12 months for transfer of balance from another credit card.
6.Can be used to charge expenses.
Disadvantages to cardholder:
1.Not accepted in many outlets.
2.Higher rate of interest compared to other types.
3.Encourages overspending and impulse buying.
4.Higher prices are charged by retailers.
5.In case of card being stolen, many unauthorised transactions already take place before fraud is discovered.
6.If cardholder does not report then he could be liable for losses from misuse.
Advantages to business:
1.Higher turnover and competitive edge which results in more customers attracted.
2.Less security risks.
Disadvantages to business:
1.Commission has to be sent to credit card company which reduces profits.
2.Higher administrative costs due to more paperwork and record keeping
3.Extra time to check whether card is stolen or credit limit exceeded.
4.Delay in payments and risk of bad debts.
5.Fraud leads to losses for credit card company.

Specialisation,Commerce and Direct Services

Specialisation: It is the tendency of people to concentrate on what they do best.
Specialisation takes place in a number of ways: by region, by country, by city, by factory and industry, by an individual.
Specialisation in workplace is specialisation by process.
Division of labour: It is breaking down a productive task into small portions and placing each portion under an individual so that each individual performs a different portion of the actual task. It allows a task to be completed quickly.
Specialisation allows manufacturers to take advantage of economies of scale.
Comparative advantage: The concept of countries specialising in producing one particular line of goods in which it is most efficient. It can trade them to buy the goods and services it needs but is unable to produce at home.
Commerce: It is concerned with distribution of goods and services .It is not concerned with producing goods but with providing services which make it easy to exchange goods and services. It is trade and aids to trade.Examples: Banking, Retailing, Transport, Advertising etc.
Aids to trade: Commercial services that help trade to function.
Industry,Commerce and Direct services are interdependent in the following ways:
1. Industry needs commercial activity and direct service to function properly.
2.Commercial activity would be meaningless if goods and services were not produced.
3.Countries are becoming interdependent.They rely on each other for raw material and modified goods.This is happening due to improved communication and transport facilities and the development of  a worldwide financial system.