Académique Documents
Professionnel Documents
Culture Documents
INSTRUMENTS
5.1 Types of Negotiable Instruments
5.2 Presenting Checks for Payment
5.3 Processing Checks
5.4 Changing Forms of Payments
5.5 Security Issues
What is negotiable?
Negotiable means transferable.
The negotiation that goes on refers to the transfer of the
instrument between two people, or from one bank to another,
or even from one country to another.
What is an instrument?
In the broadest sense, almost any agreed-upon medium of
exchange could be considered a negotiable instrument.
In day-to-day banking, a negotiable instrument usually refers
to checks, drafts, bills of exchange, and some types of
promissory notes.
Pay to the
Payee
order of $ Amount
Amount Dollars
Pettisville Bank
Pettisville, Ohio For simulation use only
For Memo Signature
000801 041200257 103 7943
Written
Signature
Unconditional promise or order
Sum certain
Payable on demand or at a defined time
Words of negotiation
Blank endorsement
Restrictive endorsement
Full endorsement
Qualified endorsement
Drawer Payee
Federal Reserve
(or other intermediary)
Slide 16 © South-Western Publishing
Lesson 5.4
CHANGING FORMS
OF PAYMENTS
GOALS
List modern forms of payment systems
Explain how banks and other financial
institutions use automated forms of
payment
Charge cards
Credit cards
Cash cards
Debit cards
Smart cards
E-checks
Electronic tokens
Digital imaging
Electronic check presentment (ECP)
Physical security
Technology security
Fraud
Building design
Surveillance and alarm technology
Employee training
Transportation security
Security technology
Physical security
Administrative policies
Check fraud
Credit card fraud
Loan fraud
Bank administration
Employee training
Consumer education