EMS Grade 7 Forms of Money Lessons 4 and 5

Characteristics of Money

• Money has four important characteristics that make it a sustainable medium of exchange: rarity, durability, portability, and divisibility.
• These characteristics make trading simpler and faster.

History of Money

• Money has evolved over time and is still evolving.
• In the past, people used bartering systems, but modern societies no longer use them.
• Instead, people use money to pay for goods and services.

Forms of Money

• Promissory notes: a document that contains a promise to pay a specific amount of money to another person.
• A promissory note must contain the words "promissory note", time of payment, place of payment, name of the recipient, date of issue, and the signature of the issuer.
• Banks still use promissory notes today when lending money.

Coins

• The first coins were produced in China around 1000BC.
• Coins were made of precious metals like gold, silver, and copper, making them durable and valuable.
• Coins are stamped to confirm their weight and value, and the country of use is also indicated.
• South Africa developed its own coins in 1961, with a value attached to each coin (e.g. R5, R2, R1, etc.).

Paper Money

• Paper money was developed to make money more available and easier to carry.
• China also developed the first paper money, but it easily lost value and was quickly damaged.
• The Bank of England printed the first banknotes in 1694.
• The value of banknotes depends on their face value.
• In South Africa, there are five different banknotes each representing a different value (R200, R100, R50, R20, and R10).

Electronic Banking

• Electronic banking, also known as Electronic Funds Transfer (EFT), uses computers and electronic technology to conduct transactions.
• Advantages of electronic banking include:
  • Saves time
  • Convenient
  • Efficient
  • Security
• Disadvantages of electronic banking include:
  • Fraud (people's bank details can be stolen and transactions made on their behalf)