Purchasing with plastic: who benefits?
Article Abstract:
The UK bank credit card industry makes money by charging interest on outstanding card balances and charging retailers a percentage of sales value, the merchant service charge (MSC). Recent high interest rates have caused public pressure, and the Monopolies and Mergers Commission (MMC) has been focusing attention on credit card practices. More competition has been introduced into the industry by the banks themselves, but competition remains imperfect due to the interbank interchange fee charged by banks for processing a transaction from other banks' cards. The interchange fee is equivalent to a surcharge on the retail sector sale levied by the banking sector, an issue not addressed by the MMC. However, the Department of Trade and Industry Secretary of State now requires banks to provide information on MSCs and interchange fees, which may lead to changes in the way the fees are set to increase fairness.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1990
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Liquidity and how to manage it
Article Abstract:
Pointers on how to manage a company's short-term cleared cash balance are given. Bank borrowing using the wholesale money market, wherein banks borrow and lend among themselves, is recommended provided that the company leaves a small amount on overdraft. Depending on the margin over the London interbank offered rate, savings of as much as 1% can be availed of. On the other hand, the amount of money deposited with each bank should be limited to control credit risk. This can be achieved by depositing only with banks belonging in a particular credit rating category and by requesting for limit recommendations from house merchant banks. Deposit instruments should be sold only after maturity to avoid altering its capital value. Types of borrowing and depositing instruments are discussed while techniques in dealing on the money markets and forecasting cash flows are also provided.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1992
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Cash: a question of balance
Article Abstract:
There are three different cash balance scenarios for UK companies: the cash book balance, which consists of all the receipts recorded in the cash book of the firm, regardless of whether they have been paid; the bank statement or bank ledger balance, which consists of all the receipts paid to the bank minus payments debited to the firm's account by the bank; and the cleared bank balance, which reflects the fact that the bank will not give a firm credit for uncleared checks. The accounts of firms that have more than one bank account with a particular bank are usually structured in offset arrangements whereby interest is calculated by offsetting cleared credit balances with cleared debit balances. After firms' treasurers establish a workable bank account structure, they should monitor cash flows and forecast the cleared balance for each day.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1991
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