The Payments SystemC2.Checks Instructions to the bank to take funds fromyour account and transfer those funds to theperson orfirm whose name is written in the“"Pay to the Order of"line.2-6
2-6 The Payments System 2. Checks • Instructions to the bank to take funds from your account and transfer those funds to the person or firm whose name is written in the “Pay to the Order of” line
The Path of a Paper CheckCFigure2.1ThePathofaPaperCheckYou hand apapercheck from yotrbanktoamerchantinexchangeforgroceries.Themerchantdepositsthecheckintothemerchant'sbamkand the merchant's account is credited.Themerchant'sbanksendsthechecktothelocalFederal ReserveBank.The Federal Reserve:Thisstepuses.Creditsthemerchant'sbank'sreserveaccountandmoney.2.Debits yourbmk'sreserveaccount.TheFederalReservereturnsthechecktoyourbankYourbankdebitsyourcheckingaccountbytheamountofthecheck(Yourbankhasseveral daystosendthecheckbackthroughthesystem ifyouhaveinsufficientfundsin youraccount.)2-7
2-7 The Path of a Paper Check
福The PaymentssSystema3.Other Forms of PaymentsCredit CardsDebit CardsElectronicFundstransfersStoredValue Cards2-8
2-8 The Payments System • 3.Other Forms of Payments • Credit Cards • Debit Cards • Electronic Funds transfers • Stored Value Cards