Cash Transaction
| Cash Transaction |
|---|
| See also |
Cash transaction-transaction should be understood as a legal act (agreement) between at least two parties, which executes at least one payment. Cash transaction is a transaction that implicite the prompt exchange of cash for a rescoure [1]. In another it is an action which is taking place between the seller and the buyer, which aims to exchange goods or services.Cash transactions occur in every business concern. However, it exist various types of cash transactions.
Types of cash transaction
The following types of cash transactions have been distinguished: Withdrawal of cash from an ATM-it is a process that the person is requiring a cash from autmatic telling mahine. For such kind of action is it necessary to have a plastic card, which should be located in a slot of ATM. The cash machine wilk require PIN as an authorization for action on the account. When the PIN number is correct, the customer is able to withdraw requested amount [2]. Payment of cash in a cash deposit- determines cash that has been transferred to the bank by the client. Payment or withdrawal of cash at a bank branch is a situation where the customer is going to the bank to make a cash transaction. Usually today people do actions like that via Internet, but still the greatest solution for many people, especially if it applies to a large sum of money, is to go to the branch of the bank and talk about plans with agent who is able to lead verbal conversation. Payment in the store in cash, the person who is buying an asset is obligated to pay by cash immediate for the dealer on the time and place of purchase.
Difference between cash transaction and non-cash transaction
Transaction can be divide for two section, such as: cash and non-cash transactions. Cash transaction are those which involve cash inflows (receipes) and cash outflows (payments). However, cash transaction are very popular if the amount of transaction is not high. Richard Lipsey in his book indicato that average value of cash transaction is 11 pounds [3] Non cash transactions are those, which not include cash flows. A lot of non-cash transactions are connected with credit transactions of purchase and sale of goods Non-cash transactions therefore apply to monetary settlements in which both parties to the settlement have a bank account and it is not necessary to use a cash on any stage of transaction. Non cash tranasction is also transaction are for ex ample [4]. :
- transfer order,
- direct debit,
- standing order,
- debit card,
- prepaid card,
- credit card,
- charge card
- a settlement check,
- electronic transfers,
- mobile payments
In case of cash transactions there is a high probability of theft or loss of money. There is no possibility, as in the case of a credit card, reservations, and often the money that has disappeared is not recoverable. Amnog others it is the reason about increase in the percentage of electronic payments. Electronic payments i also more taken for more comfort by the fact that it is not necessary to ATM to make a transaction.
The number of transactions
David H. Bumprey In his book shows numerous of cash transaction as this way of payment is increasingly replaced by another methods as for exapmle paing by credit card, bank transfer etc. In his opinion cash is very comfortable in use as there is no hidden costs in connection with the transaction as for example with bank transfer (keeping an account is usually conditioned by guidelines that should be met for the bank). We can see that the estimated transaction use of cash in the countries look like this [5]:
- 78% in the Netherlands,
- 86% in Germany,
- 90% in the United Kingdom,
In many countries which are developing numbers of cash transaction can be higher because of a lack of acceptabte alternative payment instruments. Currently the number of cash transactions is decreasing, due to the popularity of using card and online transfers. This situation occurs due to the right increase in the popularity of online shopping, where payment can only be settled via electronic means only.
Footnotes
- ↑ Pradeep D. Kamthekar. (2018). Specific Elective [DSE] Courses Accountancy & Financial Management Ip. 5
- ↑ Piper F., Murphy S., (2002), Cryptography: A Very Short Introduction, Oxford, p. 152
- ↑ Lipsey R., Chrystal A., (2015),Economics, Oxford, p. 455
- ↑ Kasis M., Reddy S., (2007), Managerial Economics and Financial Accounting, PHI, p.326
- ↑ Humphrey D. B. (1995). Payment Systems: Principles, Practice, and Improvements, p. 31
References
- Humphrey D. B., (1995), Payment Systems: Principles, Practice, and Improvements , The International Bank for Reconstruction and Development
- Kamthekar D.P., (2018), Specific Elective DSE Courses Accountancy & Financial Management , Lulu Publications
- Kasi M., Reddy S., (2007), Managerial Economics and Financial Accounting , PHI
- Lipsey R., Chrystal A., (2015), Economics , Oxford
- Piper F., Murphy S., (2002), Cryptography: A Very Short Introduction , Oxford
Author: Dominika Król
