Unit 4 PERSONAL ACCOUNTS

This unit contains the English you need to understand and explain different methods of payments
and personal account services available to customers.

A. Discussion
How many methods of payment does your bank provide?
How does your bank explain and sell services to customers?

B. Reading I
Payment services
To attract more customers, and to provide for their various needs, the banks have developed
different methods of payment:
1. Cheques and cheque clearing
2. Credit cards and charge card (plastic money)
3. EFTPOS (plastic money)
4. Standing orders
5. Direct debits
6. Credit transfers
7. Banker’s drafts
8. Telegraphic transfer
9. Instant cash transfer
(Numbers 7 and 8 are sometimes called remittances)
STANDING ORDER

Gambar 1
 Gambar 2

WHAT IS STANDING ORDER?

Standing order is an automated method of making payments, where a person or business
instructs their bank to pay another person or business a fixed amount of money at regular (fixed)
intervals. The payer controls the standing order; they set it up themselves, and choose the amount
and frequency. Standing orders are created to cover a set period of time (e.g. every month for a
year), or until they are cancelled. Any person or company with a current account can set up a
standing order, either online, over the phone or at in person at a branch of their bank.
Some small businesses collect regular payments from customers by standing order. Receiving
payment by standing order generally costs nothing, and, once the order is up and running, the
business can rest assured that payments will be collecting automatically and on time. However
there are drawbacks: a customer can change or cancel the payment without notifying you, so
you’ll have to rely on them to get this part right.
HOW DOES A STANDING ORDER?
The first step in setting up a standing order requires the payer to contact their bank to request
it. With some banks and building societies, standing orders can be set up online or over the
phone. The payer then completes a standing order form (paper or online) and gives it to their
bank. This will include details of the account number and sort code of the person or organisation
being paid.
Banks don’t usually charge anything to the payer or payee for setting up or using standing
orders. It’s important to keep in mind that customers can cancel a standing order at any time, or
change the amount or payment date. Standing orders are created to cover a set period of time
(e.g. every month for a year) or until they are cancelled.

WHEN TO USE STANDING ORDER?

For starters, think about how many customers you currently have. Standing orders are
generally a good fit for small businesses, organisations or clubs with less than 25 customers, as a
certain level of trust is helpful when using standing orders.
Secondly, think about whether you trust your customers to set up and make their payments on
time. If yes, then standing order could be a good option for you, as your customer does all the
hard work in setting it up.
And finally, deciding whether to use a standing order also depends on the types of payments
you’re most commonly taking. If most of your customers pay by regular, fixed payments, then
either standing order or Direct Debit can be used. It’s also possible to use either standing order or
Direct Debit for taking one-off payments, although this is not how they’re typically used.
For variable payments, standing orders are less useful. They’re not great for paying bills with
variable amounts or frequencies such as utility bills or credit card debts or in industries where
you may want to increase fees or upgrade subscriptions easily.

WHAT CAN I PAY FOR WITH A STANDING ORDER?

If you’re new to standing orders, you’ll find a whole host of things you can use them for.
Common examples include:

 paying off credit card bills

 making payments from your current account into a savings account or premium bonds

 paying bills with fixed amounts

 paying business expenses and overheads

 paying monthly rent payment

 paying for subscriptions e.g. magazines, food boxes or software.

WHAT ARE THE ADVANTAGES OF STANDING ORDERS?

 Usually free of charge for both payer and payee
 Easy and quick for payer to set up
 Useful for making recurring payments between private individuals (such as tenant to
landlord)
 Helps businesses to collect regular payments on time, once set up
WHAT ARE THE DISADVANTAGES OF STANDING ORDERS?
 No payment notifications. This means it could potentially take a payee weeks to find out
that a payment had failed (either because the payer cancelled it, or because their account
lacked the necessary funds to cover the payment amount). If this happens, the payee will
need to chase the payer to set up payment all over again.
 Less flexibility. Changing the amount or date of a payment requires the payer to cancel
the standing order and create a new one.
 Risk of late payment. Many businesses struggle to get customers to set up their standing
order quickly, or to amend it as or when required. This brings back the risk of late
payment, potentially causing cash flow problems for a business.
 High admin. Businesses taking payments by standing order may end up constantly
checking their bank to see if payment has arrived and manually updating accounts once it
does. This is time and labour that could be better spent elsewhere.

C.Vocabulary expansion
1. Use different forms of the words in the box to complete the sentences below. If necessary, use
a dictionary to help you

Regulate enter attract provide for item remittance standing

a. Verb : Larger deposits ………………….a higher interest rate

They were …….to each other immediately.
Adjective : His bank offers very ………….rate of interest
The manager was an …………..woman
Noun : Pavarotti was the star …….at the concert
The speed of service was an added ……….at the bank
b. Verb : With such a low wage it was impossible for him to …..his family
Banks have to ……………..bad debts
Adjective : A …………government was appointed until elections could be held.
Noun : They took water and ….before they went camping in the mountains
The balance sheet had a ….for non-payment of trade debts.
c. Verb : The central bank ……..the commercial banks by issuing directives
The ministry of Finance ……...price rises in the move towards a free
market
Adjectives : Some kind of …….body is needed to control the banks.
Noun : The …..don’t allow export of large amounts of capital
d. Verb : They …….the market with a new pocket computer
Thieves …..the house and stole a painting
Noun 1 : The standing order is shown as a debit …..in the customer’s statement
of account
 They explained the conditions of ………to the European Community,
during the meeting.
After 1989, permits were abolished
Noun 2 : There is a guard at the ……….to the bank
e. Verb : We have ……….£340 to your suppliers
Noun : Notice the difference between
1. remitter = the sender of a remittance
2. remittance = money sent by post or through a bank
We look forward to receiving your remittance
3. remission = forgiveness
He was imprisoned for five years but gained three years’
remission for good behaviour
4. remission = repayment of tax
f. Verb : They ……..the contents of the house
Noun : The first …..on the agenda for the meeting was the Chairman’s report
He telephoned the bank to ask them about an …..on his account
g. Verb : Prices ……….at the same level for several years.
She ……..at the entrance of the bank
Adjective : We have a ………….invitation to visit them
There is a long ……..dispute between the two neighbours
Noun : The leaflets area on the display ……in the bank

Synonyms
2. Match the words on the left with those of the same meaning on the right:
outgoings order
purchase expenses
fill in buy
mandate complete
3. Without looking back at reading I, complete the passage by supplying one word for each
numbered space:
To (1) ……more customers, and provide for their (2) …..needs, the banks have developed
different (3) ………..of payment.
Standing orders are useful for (4) ………outgoings like rent, electricity, gas and telephone
bills. (5) ……..are also used for large monthly (6) …….over long periods, such as mortgage
(7) ……(= buying a house) or car (8) ……….. The customer complete a standing order (9)
………like the one on page 29 giving details of his (10) …….and the payee’s account, along
(11) ………….the date of the first and (12) ……payments.
In the customer’s statement o (13) ……..all the standing order payments are (14) ……..SO
and entered in the debit (15).
D. Reading II
Direct debits
Another way of making regular payments is to authorize the creditor to draw the money
by direct debit – a system which was introduced in the UK a few years ago. The account
holder completes a direct debit instruction like the one on the next page and sends it to
the payee (in this case British Telecom).

5 The advantages of direct debit are mainly to the originator (the creditor/payee) rather
than to the account holder (the debtor/payer).

Firstly, it is cheaper to operate. So large organizations such as a telephone company

which have to draw regular payments from thousands of people, can reduce their billing
costs considerably. From their point of view, if they can direct debit all their customers
1 through the banking system each month it becomes much cheaper administratively than
0 receiving payments by standing order. It is certainly much cheaper than sending each
customer a bill each month and waiting to receive payment.
Another advantage is that the creditor can vary the date of the direct debit, which can
help its cash flow position, and also the amount to be debited where this is subject to
variation.

1 If the payer disagree with a direct debit, he can simply instruct his bank to stop the
5 payment. Then he has to settle the disagreement with the creditor.

Companies which operate direct debit billing, such as British Telecom, say that the
reduction in costs adds to their efficiency and they can pass on this increased efficiency
to their customers in the form of lower charges. But there is some doubt about this
because it is widely felt that it is the shareholders of the company who benefit, not the
2 consumers.
0
There have also been complaints abut direct debiting of National Insurance (social
insurance tax); if an excess amount has been debited the payer cannot get the money
back until after the end of the year.

E. Vocabulary
1. How are the following ideas expressed in the passage?
a. An order telling an organisation to draw money from your bank account (three words)
b. The organisation drawing money by direct debit (one word)
c. The expense of obtaining payments from customers (two word)
d. Give permission (one word)
e. The amount of money held at any one time (three words)
 f. Person or organisation to whom money is owed (one word)
g. More output for less effort or cost (one word)
h. People or institutions who have invested money in a company (one word)
i. A person or organisation which remains a customer over a long period (one word)
j. The UK social security fund (two words)
k. An overpayment (two words)

2. Use the verbs in the box (which may be found on the direct debit form or in Reading II) to
complete the sentences.

quote settle trace make out instruct complete

authorize operate draw originate accept vary

a. The order countries hoped that the disagreement between the two sides in the war could be
…………in Geneva.
b. His statement showed that he had …………. £150 from his account in July.
c. For standing orders and direct debits the customer has to ………forms provided by the
bank.
d. Direct debiting is a system by which the payee (or creditor) ………each payment
e. But first the account holder has to …………the bank to ……………the system
f. The amount to be paid and the date of payment can be ………….slightly by the payee.
g. When writing to their bank, customers should ………the account number or the reference
number of the direct debit.
h. I/we ………..you to pay direct debits from my/our account at the request of the gas
company.
i. The bank may refuse to ……..direct debits from some types of account
j. The bank was unable to …………an earlier payment.
3. Now rewrite the sentences below with eleven of the verbs from the box. (The words in italics
carry the meaning of the replacement verbs).
a. When you write to us, please let us know your account number.
b. Prague airport will only take US dollars in payment
c. Tomatoes come from America.
d. The building will be finished in 1994.
e. I took some money out of my account last week
f. The forefathers of many American presidents can be found in Ireland (use …back to)
g. Please write me a cheque £5,000.
h. The manager has been told by head office to expand the business in Barakonia
i. Barakonia airlines runs a flight to Bratislava, every Monday.
j. The purchase must be allowed by the manager.
k. The debt must be paid before the end of the year.
F. Discussion
1. Are the following statements TRUE or FALSE according to the text?
 a. The direct debit method is used to pay bills of all kinds
b. The main advantage of direct debit is that it is more economical to operate
c. The suppliers can vary the amount to be paid as much as they want.
d. The suppliers can vary the date in each month when the payment is carried out.
e. Direct debit payments are carried out automatically by the banks each month.
f. Each payment has to be authorised by the account holder.
g. The consumer cannot stop a direct debit payment.
h. The consumer always gets the advantage of the lower operating costs of direct debiting.
i. Direct debiting enables large companies to be more efficient.
j. The lower cost of direct debit billing is passed on to the consumer in the form of lower
prices.

G. Reading III
International Transfers.
There are four types of international transfer which are available to personal account
customers-telegraphic transfers, banker’s drafts, instant cash transfers and mail transfers.
Instant cash transfers are only possible when the sending bank has computer links with
the receiving bank. The mail transfer is almost as quick because banks now use SWIFT
5 services. Where possible, they put a large number of smaller remittances on to one
SWIFT transmission.

In the past, telegraphic were the fastest method of sending money from one country to
another – and the most expensive. If the sending and receiving banks are correspondent
banks and have accounts with each other it is a simple matter for them to adjust these
1 accounts. Otherwise, another bank which is a correspondent has to be used, which can
0 act as an intermediary between the remitting and receiving banks.

A cheaper but slower way of sending money is for the customer to buy a banker’s draft
and post it to the person or bank at the other end. A banker’s draft is simply a cheque
issued by a bank drawn on itself or on a correspondent bank in another country. It is
better than a personal cheque because it has the backing of the issuing bank. Also it can
1 be made out to pay a named account at a specific bank to give it absolute security.
5
The Royal Bank of Scotland and the Bank of Santander have led the way in linking
themselves to each other by computer. This enables them to offer instant cash transfers
between the UK and Spain.

2
0

H. Use of terms.
 1. Use suitable expressions from the box to complete the next

banker’s drafts telegraphic transfers

issued instant cash transfer
remitting correspondent
backing transfer
International (1) ……….of money can be carried out by (2) ……………banks which
intermediaries
have accounts with each other. A bank sending a (3) ……….debits the account which it
keeps of the receiving bank. The receiving bank credits the account it keeps of the (4)
…….bank. If the customer wants to send the transfer to a bank which is not a (5)
……….. of the sending bank, other banks have to be used as (6) …….
(7) ……..are as good as money because they have the (8) ……….of a bank. They can be
exchanged by banks which have accounts with each other and eventually presented to the
bank which originally (9) …….the draft.
The method of remitting money internationally which involves the least work is the (10)
……….which is only possible between banks which are linked by computer.

Equivalent expressions
2. The phrases on the left have been taken from the reading text. Match each of them with
the expressions of equivalent meaning on the right.
fastest method joining up
from one country to another pioneered
sending complete safety
act as an intermediary between mail
post security
the backing internationally
absolute security represent
led the way in quickest method
linking themselves to each other remitting

I. READING IV
IBOS
Euro Banking Service

INSTANT CASH TRANSFER FROM COUNTRY TO COUNTRY

Instant cash transfer is a unique service which enables you to transfer funds across
international boundaries from one account to another faster, more reliably and cheaper than ever
before.
The secret is IBOS (Inter-Bank-On-Line System) a direct computer link joining 1,200 Banco
Santander branches with 850 Royal Bank branches for the benefit of both UK and Spanish
nationals.
TRANSFER YOUR MONEY WHERE YOU WANT IT; WHEN YOU WANT IT
 Transfers can be made by computer link instantly, enabling you to hold your funds at the best
rate anywhere in the UK, Channel Islands, Isle of Man or Spain until the moment you need them.
Not only is the service faster and more reliable than other methods, it is also significantly less
expensive. You pay a single charge only as and when you use it.

MAKING THE BEST USE OF YOUR MONEY COULD NOT BE SIMPLER

When using the service you will need to show your passport and cash card. This will help
branch staff to process your transfer as quickly as possible.

INSTANT TRANSFERS
You can transfer one-off payments between a Royal Bank of Scotland account and a Banco
Santander account easily between branches of the same domestic bank. Transfers can be
requested either from Royal Bank branches or through Branco Santander.
Amounts may be requested in either sterling or pesetas and will be charged at 0,2%
(minimum: £5; maximum: £10). Payment will be automatically converted into local currency

REGULAR PAYMENTS
If you need to make regular payments between the UK and Spain, you can set up standing
order payments between Royal Bank of Scotland accounts and Banco Santander accounts - a
straightforward and efficient way to pay utilities and other regular outgoings. Charge: £2,5 per
payment.

OVER-THE-COUNTER CASH WITHDRAWALS

As an alternative to use an automated cash machine, you can withdraw cash over the counter,
up to your daily cash card limit in the local currency. Charge: £2,50 per withdrawal.
INSTANT CASH TRANSFER LIMITS
From Royal Bank of Scotland: Through Banco Santander
Money Transfer: £1 million £3,000
Standing Orders: £10,000 -
Cash Withdrawals: - up to card limit
All transactions are subject to Spanish exchange control reulations
THE ROYAL BANK OF SCOTLAND plc
Registered Office: 36 St.Andrew Square, Edinburgh EH224B
Registered in Scotland No. 90321
For futther information contact any branch of The Royal Bank of Scotland or Banco Santander or telephone in
banking hours
(UK) (071) 615 64 70 Mr. Charles Goulds
(Spain) (91) 581 38 25 Ms. Irene Herrera

J. Discussion
1. Answer the question
a. How many reasons can you think of for needing to transfer a large sum like £3,000 from
one country to another?
 b. What is IBOS?
c. What is the highest and lowest charge for transferring money in this way?
d. What is the charge for standing order transfers?
e. What is the relationship between Royal Bank of Scotland and the Banco Santander?

K. Vocabulary
1. How are the following ideas expressed in the leaflet?
a. The only in the world (one word, Section 1, paragraph 1)
b. In a way that you can be sure about (two word, Section 1, paragraph 1)
c. Keep your money at the highest interest available (seven words, paragraph 2)
d. Noticeably cheaper (three words, Section 2, paragraph 2)
e. Bank within, and belonging to, the country it is in (two words, Section 3, paragraph 2).
f. Electricity, telephone, water services (one word, Section 5 (Regular Payments).
g. In the money of the country you are in (four words, Section 3, paragraph 5).

2. Supply the missing words to complete the following sentences. (All the words are to be
found in the leaflet).
a. Instant ………….transfer can be made any time.
b. You can transfer ……across international boundaries.
c. You may …….your funds in this account. (= keep).
d. You can ……..money from one country to another
e. Use the account paying the ………rate.
f. Your bank card will enable staff to ………..your transfer.
g. Payments are automatically ………..into local currency.
h. You may overdraw your account to an agreed …………
i. All transactions are …………to Barakonian law.
j. For ……information, contact Manara Lombard Bank in Zamina.