Banking Instruments and Payment Methods

Instruments of Exchange

• Bank draft: a payment guaranteed by the issuing bank, drawn from the payer's account, and similar to a check.
• Cheque: written instructions to a bank to transfer a certain sum to the payee's account.
• Banknotes: cash.

Electronic Transfers

• Electronic transfer: any transfer of funds made electronically.
• Mobile Money: the use of cell phones to transfer money electronically.
• Money Transfer: the action of moving money from one account to another digitally.

E-commerce and Profit

• E-commerce: trading of goods and services using online communications.
• Profit: financial gain obtained by spending less than what was earned.

Market and Goods

• Market: any situation or place where buyers and sellers meet.
• Goods: finished products sold to consumers.
• Commodity: raw materials traded on exchanges.

Consumer vs. Customer

• Customer: an organization or individual who purchases a product or service to resell, gift, or use it.
• Customer: someone who purchases a good or service to fulfill their needs.
• Consumer: anyone who uses a product or service, but they don't always pay for it.
• Consumer: a person who ultimately consumes a good or service.

Entrepreneurship

• Entrepreneurship: the ability and readiness to develop, organize, and run a business enterprise, along with its uncertainties, to make a profit.

Characteristics of Money

• Acceptability
• Scarcity
• Durability
• Divisibility
• Recognizability

Functions of Money

• Medium of exchange: money is accepted as payment for goods and services.
• Store of value: money can be saved and will keep its value.
• Standard for measuring values: money helps in determining the value of goods and services.
• Standard for deferred payments: money allows for borrowing and credit payments.
• Transfers value: value can be transferred from one person to another.

Barter System

• Facilitates trade without money.
• Enables the disposal of surplus production.
• Increases the availability of goods.
• Laid the foundation for the organized method of trading.

Disadvantages of Barter System

• Lack of double coincidence of wants.
• Lack of common measure of value.
• Difficulty in deferring payments.
• Indivisibility of goods.
• No storage of value.

Sourcing Capital

• Business Loans
• Savings
• Crowdfunding
• Grants and Competitions