CEFS Unit 1 - ALL topics Exam Questions and Answers Automated teller machine, also known as a cash machine. - Correct Answers ✅ATM The central payment system used to process different types of electronic payment. - Correct Answers ✅Bacs A banker's draft is similar to a cheque but the payment is signed and guaranteed by the financial services provider that issues it, rather than by an individual. Banker's drafts are used for paying large sums of money. - Correct Answers ✅Banker's draft A service offered by some retailers when customers pay by card. The retailer gives the customer cash and debits the amount of cash handed over from the customer's payment card. - Correct Answers ✅Cashback A card used to withdraw cash from ATMs or branch counters. - Correct Answers ✅Cash card Clearing House Automated Payment System, a same-day payment system for high-value transactions, such as a house purchase. - Correct Answers ✅CHAPS A written instruction to the provider (eg the bank or building society) to pay a specified amount to a specified person or organisation. (The law relating to cheques is quite complex so 1 / 4
CEFS Unit 1 - ALL topics Exam Questions and Answers this is a simplified explanation for the purpose of these study materials.) - Correct Answers ✅Cheque A card that can be read simply by holding it in front of a card reader. It is used for low-value payments. - Correct Answers ✅Contactless card A card that can be used to withdraw cash, to make face-to- face transactions in, for example, shops, and to make payments online or over the phone. - Correct Answers ✅Debit card An electronic payment into an account, for example a salary or benefit payment. - Correct Answers ✅Direct credit An electronic payment out of an account. The amount and frequency of a direct debit payment can vary. - Correct Answers ✅Direct debit An electronic payment service that enables payments to be made within two hours. - Correct Answers ✅Faster Payments A paper or online instruction to a provider (eg bank or building society) to make a payment from an account. - Correct Answers ✅Mandate 2 / 4
CEFS Unit 1 - ALL topics Exam Questions and Answers A card that has to have money credited to it before the card holder can use it to pay for goods. Once the initial sum of money on the card runs out, it can be topped up again. Some prepaid cards can be loaded with foreign currency and used abroad - Correct Answers ✅Prepaid cards An electronic payment out of an account. Standing orders are used to make regular payments of the same amount. - Correct Answers ✅Standing order Buying or selling something. - Correct Answers ✅Transaction The reason why someone needs to make a payment, eg needing to top up your phone credit so that you can use your phone is a transaction need. - Correct Answers ✅Transaction need A pre-printed cheque for a set amount of currency, eg 50 or 100 US dollars or euros. A traveller's cheque can be exchanged for local currency or used to make payments while abroad. - Correct Answers ✅Traveller's cheque Things or experiences that people would like to have in the future, for example owning a home instead of renting, having 3 / 4
CEFS Unit 1 - ALL topics Exam Questions and Answers a luxury holiday or buying a sports car. - Correct Answers ✅Aspirations Things that a person or a business owns. For a person their assets might include property, jewellery or financial products such as company shares. - Correct Answers ✅Assests The interest rate that the Bank of England uses when it lends money to other banks. Financial services providers take account of the Bank rate when they decide how to set interest rates on their own products. - Correct Answers ✅Bank rate Changes to the size and structure of the population (for example an increase in the number of people over the age of 65, or a rise in children of school age). - Correct Answers ✅Demographic changes A period when the country is producing and selling an increasing amount of goods and services. - Correct Answers ✅Economic boom The amount, expressed as percentage, that a financial services provider charges a borrower when it lends money, or pays to a saver - Correct Answers ✅Interest rate
- / 4