1. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
AT A GLANCE
By the end of this chapter, you will be able to:
• List the various methods of payment
• Describe how each method of payment
works
• Explain the advantages and
disadvantages of the different methods
• Explain how to use credit responsibly
• Decide which method of payment to use
1

2. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
• We can make payments in
many ways
• The method of payment used
depends on:
– The item we are buying
– The cost of the item
– The methods of payment
accepted by the seller
2
Making payments

3. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
• Payment using banknotes and coins
• Most common method of payment
3
Cash
Advantages Disadvantages
• Widely accepted
• Fast and convenient
• Cash can be lost or
stolen when we carry it
• Coins are heavy to
carry around
• Have to exchange
currency when we visit
another country
• Cannot be used for
online transactions

4. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
• A cash value is stored in the card and
payments are deducted from this value
• E.g. NETS CashCard, EZ-Link Card
4
Stored-value card
Advantages Disadvantages
• Convenient to carry
around
• Quick and easy to use
• Lost card can be used
by anyone
• Not all stores accept
stored-value cards
• Need to top up the
card whenever the
stored value runs low

5. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
• A card issued by the bank
• The purchase amount is deducted immediately
from bank account when we pay with debit card
5
Debit card
Advantages Disadvantages
• Convenient to carry
around
• Quick and easy to use
• Lost card can be used
by anyone
• Not all stores accept
stored-value cards
• Need to top up the
card whenever the
stored value runs low

6. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
• A written and signature-authorised payment slip
• Issuing cheque = instructing the bank to deduct
money from bank account to pay the person or
company listed on the cheque
6
Cheque
Advantages Disadvantages
• Convenient and safe
to carry around
• Can be issued for any
amount and is useful
when paying for
expensive items
• Can be sent through
post
• Signature on cheque
can be forged
• Some stores do not
accept cheques
• Banks impose a charge
for cheque books

7. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
• Payment using electronic means
• Amount is deducted from bank
account once transaction is approved
• E.g. GIRO, Internet banking, NETS
7
Electronic transfer
Advantages Disadvantages
• Quick and easy to use
• Payment can only be
authorised by a
Personal Identification
Number (PIN)
• Cannot make payment
if the amount in bank
account is insufficient
• May forget PIN and not
be able to make
payment

8. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
• A form of borrowing which allows the buying of
goods and services on credit
• The card holder is usually billed once a month for
the amount spent using the card
8
Credit card
Advantages Disadvantages
• Convenient to carry
around
• Most credit cards can
be used overseas
• Can be used for
online transactions
• Interest will be charged
for late payment
• May buy on impulse
• Signature on the card
can be forged if card
gets stolen
• There is usually a credit
limit for each card

9. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
• Payment in parts or percentage over an
agreed period of time
• Used in the payment of expensive items such
as cars, electrical appliances, furniture
9
Hire purchase and instalment
Hire purchase Instalment
Ownership Ownership of the item
belongs to the buyer
only when the last
payment has been
made
Ownership of the item
belongs to the buyer
immediately
Retrieval Seller can take the item
back if the buyer fails to
complete the payment
Seller cannot take the
item back but can
claim against the buyer
by charging a higher
interest rate

10. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
10
Hire purchase and instalment
Advantages Disadvantages
• Need not make full
payment at the time
of purchase
• Allows us to pay a
manageable amount
at regular intervals
• The total cost paid for
the product can be
higher than the original
price due to the interest
charged
• For hire purchases, the
item will be repossessed
and extra costs such as
termination fee may be
charged if payment is
not completed
• For instalment purchases,
there can be a late
payment charge

11. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
• Credit cards, hire purchases and instalments are
forms of borrowing that allows us to buy goods
and services first and make payment later
• This form of borrowing is known as credit
• Examples of credit usage:
– Credit cards
– Loans such as housing loans
– Services such as utilities and telephone bills
11
Using credit responsibly

12. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
12
Advantages and disadvantages of credit
Advantages Disadvantages
Provides convenience Incurs additional costs such as
fees and interest
Receives goods and services
before actual payment is made
Encourages overspending
Meets emergencies May lead to inability to pay off
amount owed
Takes advantage of sales and
promotions
May lead to bankruptcy

13. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
13
Responsible use of credit
Ways to use credit wisely:
1. Use credit
only when we
can afford it
2. Plan our
expenses
carefully
3. Keep track of
the amount of
money spent
4. Pay our
bills promptly
to avoid late
payment
charges
5. Avoid having
more credit
cards than
necessary
6. Prepare for
emergencies by
saving up and not
spending more
than the credit limit

14. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
14
Payment methods to use
When deciding which payment method to
use, we can ask these questions:
Is the price of
the item or
service high?
Do I have
money for
what I want to
buy?
What methods
of payment
does the store
accept?
Expensive items 
cashless payment
methods e.g. debit
card, electronic
transfer
If yes 
pay with cash or
cashless methods
If no 
pay using credit
Expensive items 
Some shops may
accept credit cards

15. Chapter 2
Food Presentation
Chapter 8
Methods of Payment
15
Payment methods to use
• Automated self-service kiosks
– E.g. AXS Station, Self-service automated
machine (SAM), iNETS Kiosk
– Payment of bills and fines, top up
prepaid card, ticketing, government
eServices
• Internet (online transactions)