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23 S. Afr. Mercantile L.J. 64 (2011)
The Mode of Payment of Insurance Premiums: Different Methods Compared

handle is hein.journals/safrmerlj23 and id is 68 raw text is: The Mode of Payment of Insurance Premiums:
Different Methods Compared
WG SCHULZE*
University of South Africa
1 Introduction
It is trite that after cash, the electronic transfer of funds is fast becoming the
most popular method of paying debts.
By way of a general background to the present discussion, it is necessary to
distinguish between an electronic transfer of funds in the wide sense, on the
one hand, and, incorporated in it, an electronic transfer of funds in the narrow
sense, on the other hand.
An electronic transfer of funds in the wide sense includes all methods of
payment which involve some form of electronic intervention in the transfer of
funds from the debtor's bank account to the account of the creditor. The
electronic transfer of funds in the wide sense would thus include payment by
means of debit and credit card, cheques, stop and debit orders, as well as the
electronic transfer of funds where no payment card or other document (for
example, a cheque or debit order form) is involved. In the case where there is
no payment card or other document involved in effecting the transfer of funds
from the debtor's bank account to that of the creditor, one might conveniently
refer to such transfer as an electronic transfer of funds in the narrow sense.
This will be the case where the debtor, by means of an electronic device,
including a telephone or mobile banking facility, or a home computer, or an
automated teller machine ('ATM'), keys in a password or a personal
identification number ('PIN'), followed by a payment instruction to his bank's
computer which is linked to the electronic device employed by the debtor. The
instruction given by the debtor to his bank would be to transfer a certain
amount from his account to that of the creditor.
The proliferation of electronic transfer transactions worldwide, and also in
South Africa, stands in stark contrast with the decline in the use of some of the
more conventional methods of payment, such as credit cards and cheques.
This phenomenon may be illustrated by the following statistics.
During 1999, there were 306 963 million electronic magnetic-tape
transactions in South Africa with a total value of R2 088 479 billion. These
figures include all electronic transfers, such as electronic salary payments, and
all debit and credit transactions settled among banks, including debit orders
and client-initiated electronic transfer of funds, but excludes intra-bank
transactions. They are therefore not limited to electronic fund transfers in the
* BLC LLB (Pret) LLD (Unisa). Professor in the Department of Mercantile Law, School of Law,
University of South Africa.

64

0 2011. All rights reserved.
Cite as: (2011) 23 SA Mer LJ 64-81.

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