Payment cards part 1

Learning outcomes

The main learning outcomes for this lesson are:

Understand what a credit card, a debit card and a pre-paid card isLearn how they workUnderstand what contactless payments areGain knowledge on what PINs are and why they are needed

Starter

Cards are the most popular method of payment.In pairs you must write down what you think a debit card is, a pre-paid card is and what you think a credit card is. You also have to write down who can get these types of cards. Are there age limits?

You have 5 minutes!

Debit, pre-paid & Credit cards

A debit is card is a card given to a person who has a current bank account. This allows the person to use the card to buy items at a shop or online or get cash from a cash machine. With a debit card you can only use what money you have in your own account. You are spending your own money.

A pre-paid debit card doesn’t necessarily need a bank account. You load money onto the card and can only spend the money that is on it. Like with a standard debit card, you are spending your own money.

Credit cards are available to anyone over 18 years of age who qualifies. This is borrowing money that a bank is willing to lend you. The main downside to a credit card is that you have to pay back the money you have used with interest. The interest rates will vary depending on the bank you get the credit card from. Basically it is not your money you are spending.

Remember

-debit means to subtract so it’s subtracting money from your bank account or balance.+credit means where the bank is willing to give you money like a loan. You will have to pay interest if you do not pay it all back in the first month.

Activity

Role play – you will now do a role play to show how these cards are used in shops and how they are different.

You must get into groups of 3.

The teacher will provide the resources for you.One person will be the customer.One will be the bank.One will be the shop assistant.

How do you get a Credit card?

A person wanting a credit card would need to search different credit cards online first so they get the best deal. For example some credit cards offer a 0% interest for the first year. Inform the pupils that they need to understand the term APR which stands for Annual Percentage Rate. This may differ from card to card.

Once you have decided on the credit card you would need to contact the supplier - e.g. the bank or financial company such as American Express, Barclaycard or MBNA.

You will need to fill out an application form and the bank or financial company will do a credit check on your finances. This is to see if they think you can pay back the amount of money they are going to lend you. If you pass the checks then a credit card will be sent to your home address with an agreed limit ready for you to use.

Activity

On a piece of paper you must answer the following questions:

What do you think PIN stands for? Why do we have PINs?How do you find out what your PIN is?Do you have a PIN for every card?Do you use a PIN when you shop online?

AnswersPersonal Identification NumberWe have PINs for security reasons so if you lose your card no one else will be able to use it. You must not keep your PIN with your card.When you get a card your bank or financial company will tell you what your PIN is and where you can use your card. The PIN might be delivered through the post separately from your card or might be available for you to view on your online account.Yes - you can have a PIN for debit cards, pre-paid cards and credit cards as you can use them to take money out of a cash machine or buy items with them in a shop. No – you won’t be asked to enter your PIN online. Instead, some companies use another way to check that you are really the owner of the card. Both Visa and Mastercard use a system whereby you enter letters from a special password as you complete your online purchase to verify that it is you shopping and not somebody else trying to use your card. This is known as Verified by Visa or Mastercard Secure.

Does anybody know what a contactless card is? It can be credit card or a debit

card.

Contactless payments

A contactless card is where you can pay for items up to £20 without entering your PIN. Every contactless card has a small chip in it that emits radio waves. To pay for something you hold the card near to the payment terminal which picks up the signal and processes the transaction.You don’t have to sign or enter your PIN so it is really quick.

Does anybody know what the symbol for a contactless card is?

Contactless symbol

Activity

Research using the computers to find out which retailers accept a contactless card

You have 5 minutes!

Some answers

Marks and SpencerBootsWaitroseASDATescoW H SmithMacDonaldsLots of them….

Do you think contactless cards are safe?

Are contactless payments safe?

There is a restriction on how many contactless payments you can make before the bank will ask you for the PIN. This means if your card does get stolen the thief could only spend between £45 and £100 before being asked for a PIN so after that the card would be no good to them. Fact: According to the UK cards association there has been no evidence to date of any major fraud losses arising as a result of the introduction of contactless technology. (Quote taken from Which? website)

Plenary

This video talks about the different types of card

https://www.youtube.com/watch?v=B9WZyWaGa50

This video talks about contactless cards

https://www.youtube.com/watch?v=JBQjxY-3_uU