Question

Which of the following are advantages of electronic payment systems?

O low ordering costs
O low carrying costs
O reduced float
O low transaction costs

Answer 1

Electronic payment systems offer advantages such as low transaction costs, low ordering costs, reduced float, and low carrying costs, making financial transactions faster, easier, and less expensive compared to traditional payment methods.

Step-by-step explanation:

The advantages of electronic payment systems include low transaction costs, which are associated with the steps and processes involved in making a payment. Electronic payment systems reduce low ordering costs, as these systems streamline the purchasing process, allowing for automated ordering and invoicing. Additionally, they minimize the reduced float, which refers to the amount of time it takes for money to move from one account to another. Float times are typically lower with electronic payments because transfers are faster compared to traditional check payments that require physical transport and processing. Lastly, low carrying costs are an advantage because there is less need for businesses to handle and store cash or deal with cash deposit logistics, saving both time and potential security costs.