Tourism Grade 12 Term 3 Complete and Comprehensive Summary

Section 13: forms of payment when
traveling internationally
Advantages and disadvantages


Electronic fund transfer (EFT)
Concept Advantages Disadvantages
System of transferring money  Paperless  Hackers
from one bank account
directly into another.  Reduced administrative  Need correct banking
Used for credit and debt costs detail, difficult to revers if
transfers. wrong
Used at ATM, credit cards at  Fast and convenient
point of sale using debt card  Bank charges high
machines.  Simplified bookkeeping
International travel: bank
needs to know before hand to  Payments are secure
enable it internationally.
 Less expensive than cheque
payments



Telegraphic transfers (SWIFT transfers)
Conducted utilising the  Fast service  Hackers
telegraph – transferring
money.  Secure  Need correct banking detail
Wring funds from one
location to another,  Convenience – quick  Takes long to process
transferring from bank to
another internationally means  Funds are available in  Delay – if 2 banks not using
that banks used must have currency of destination same system
the same financial institution
SWIFT – Society for  Transferred anywhere  Bank charges and admin
Worldwide Interbank fees high
Financial Telecommunication




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, Bank drafts
Cheque drawn by one bank,  Accepted  Go in personally to bank
allowing another bank to
make payment to the persons  Proof of identification and
who name is on the cheque.  All currencies are available valid passport
Issued by their banks in
home country  Bank guaranteed  Long time to clear

 Secure  Only valid for certain time

 Stopped and replaced if  Replacement fee
stolen
 Bank charges on all
 Convenient transactions.

 Cheaper than EFT


Internet payments
Send via the internet.  Avoid queue  Unsecure
Customer goes to bank,
registers for internet  Online banking convenient  Mistakes can be made
banking, chooses a secure can be done at anytime
password and linked to  People can steel your
account can to the banking  Service fees are low details and cause fraud

 Less paper  Need a computer

 Transactions made quicker  Not all user friendly

 Various functions can be
performed – payments



Foreign bank notes (cash)
Different countries –  Preferred method  Can’t be stopped if stolen
different currencies
 Widely accepted  Person carries large sums
of money
 Traveller is better able to
manage exchange rate  Have to buy foreign
controls currency

 Convenient + easy  Have to go to bank or ATM
to get more
 Less chances of fraud
 If traveller doesn’t know
 Able to pay small foreign currency it’s easy to

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, transactions overpay

 No bank charges




Credit card
Issued to person by financial  Allows client a credit line,  Interest rates are the
institution giving permission means you seen as reliable highest
for them to access their when applying for financial
funds assistance.  Not all businesses have the
Banks need to know in required credit card
advanced of traveling  Convenient machines.
international so they can
enable it internationally  Electronic check on available  People over spend
Major credit card funds
companies:  Fraud
 Visa  Some service only use it
 MasterCard
 American Express
 Dinners Club


Traveller’s cheques
Issued by most financial  Safe – can be replaced if  Not used as much anymore
institutions can be used as stolen/lost
payment.  More expensive fees
Similar to carrying cash in  Minimises fraud
foreign currency  Some businesses + street
 Convenient to carry venders don’t accept it

 Have to be near a bank to
use it.


Preloaded foreign currency debit cards




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