Methods of payment: Practice Questions

A business wants to ensure its monthly electricity bill is paid automatically, even though the amount varies each month. Which method of payment is most suitable?

A manufacturer needs to pay 50 different suppliers simultaneously. Instead of writing individual cheques, they provide their bank with a single instruction containing all supplier bank details and amounts. This process is called:

In international trade, a seller wants a guarantee of payment upon shipment, while the buyer wants to ensure the goods are dispatched before the bank releases funds. Which method of payment acts as a bank guarantee in this scenario?

State the main difference between a standing order and a direct debit regarding the control of the payment amount.

Explain why a retail business might prefer customers to use debit cards instead of credit cards for small transactions, considering the costs involved.

In the context of international trade, why is a documentary credit considered a more secure method of payment for an exporter than a standard electronic transfer?

An online retailer is expanding internationally and needs to decide on methods of payment to offer customers.
Part A: Explain the difference between a credit card and a debit card from the perspective of the retailer.
Part B: State two advantages of using electronic transfers for B2B (business-to-business) payments.