Terms of Trade and Methods of Payment for SS 3

Class: SS 3
Term: First Term
Week: 3
Age: 14 years
Duration: 45 minutes
Subject: Commerce
Curriculum Theme: Terms of Trade and Methods of Payment
Previous Lesson: Essential Business Documents Used in Buying and Selling
Topic: TERMS OF TRADE AND METHODS OF PAYMENT
Subject Matter: Cash, credit, or payment in arrears etc; g coins, bank notes; Through bank e.g cheque, western union, money gram, electronic money transfer, transfer credit card; Standing order; Bank draft

Specific Objectives

By the end of the lesson, pupils/students should be able to:

Cognitive Domain

• Identify cash as a means of payment.
• Differentiate between cash, credit, and payment in arrears.
• List various bank payment methods.
• Explain the function of a cheque, Western Union, and MoneyGram.
• Describe electronic money transfer and credit card payments.
• State the purpose of a standing order and a bank draft.

Affective Domain

• Appreciate the importance of various payment methods in trade.
• Recognise the security features of different payment systems.

Psychomotor Domain

• Demonstrate how to fill a simple cheque (hypothetically).
• Illustrate the flow of funds in an electronic money transfer.

Reference Materials

The following resources were used in planning this lesson:

• 2025 Revised 9 Years Basic Education Curriculum
• Relevant State Unified Scheme of Work
• A suitable Commerce textbook for SS 3
• The HeadTeacher Scheme of work

Instructional Materials

The teacher will teach this lesson with the aid of:

• Sample bank notes and coins
• Sample cheque booklet
• Sample bank draft
• Pictures or diagrams of credit cards
• Charts illustrating money transfer services (e.g., Western Union, MoneyGram)

Rationale for the Lesson

This lesson is important as it equips students with a fundamental understanding of how financial transactions are settled in commerce. Knowledge of various payment methods is essential for future entrepreneurs, business professionals, and informed consumers. It highlights the evolution of payment systems and their practical applications in daily life and global trade.

Prerequisite/Previous Knowledge

Students should have a basic understanding of trade, business transactions, and the role of banks in the economy.

Lesson Content/Board Summary

TERMS OF TRADE AND METHODS OF PAYMENT

Introduction to Means of Payment

Means of payment are the various methods used to settle financial obligations arising from trade transactions. They facilitate the exchange of goods and services by providing a medium for value transfer.

Cash Payments (Legal Tender)

Cash payments involve the use of physical currency, which is considered legal tender for settling debts within a country.

1. Coins: These are metal pieces of specific weight and value, issued by the central bank as legal tender for small transactions. They are durable and widely accepted.
2. Bank Notes: These are paper currencies issued by the central bank, representing a promise to pay the bearer a specified sum. Bank notes are also legal tender for all debts and are used for larger transactions.

Credit and Payment in Arrears

1. Credit: This is an arrangement where a buyer receives goods or services immediately but agrees to pay for them at a future date. It involves trust between the buyer and seller and a promise to pay.
2. Payment in Arrears: This refers to a payment made after the service has been rendered or the goods have been received, rather than in advance. It is a form of deferred payment, common in salaries (paid after work is done) or utility bills.

Bank Payments

Bank payments involve using financial institutions to facilitate the transfer of funds between parties, offering secure and convenient ways to settle transactions.

Cheque

A cheque is a written order from an account holder (drawer) to their bank (drawee) to pay a specified sum of money to a named person or entity (payee). It is a common non-cash payment method.

Western Union

Western Union is a global money transfer service that allows individuals to send and receive money quickly across different locations, often without needing a bank account. It is widely used for remittances and urgent transfers.

MoneyGram

MoneyGram is another international money transfer service, similar to Western Union. It enables fast and reliable sending and receiving of money worldwide through a network of agents.

Electronic Money Transfer (EMT)

Electronic Money Transfer involves the transfer of funds from one account to another electronically. This can be done through online banking, mobile banking applications, direct debits, or credit systems, offering speed and convenience.

Credit Card

A credit card is a payment card issued by a financial institution, allowing the cardholder to borrow funds to pay for goods and services. The cardholder agrees to repay the borrowed money, usually with interest, by a specified due date.

Standing Order

A standing order is an instruction given by a bank account holder to their bank to pay a fixed amount of money to a specified beneficiary at regular intervals. It is commonly used for recurring payments like rent, loan repayments, or subscriptions.

Bank Draft

A bank draft is a cheque drawn by a bank on itself or another bank, guaranteeing payment to the payee. It is considered a very secure method of payment because the funds are guaranteed by the issuing bank, making it suitable for large or important transactions.

Teaching Methods/Instructional Techniques

Discussion, Explanation, Question and Answer, Demonstration, Guided Practice

Instructional Procedures

Step 1: Introduction

Time: 5 minutes

Teaching Skill: Engaging/Recalling

Teacher’s Activity: The teacher greets the students and asks them to recall different ways people pay for goods and services in their daily lives. The teacher then introduces the topic: “Terms of Trade and Methods of Payment.”

Pupils’ Activity: Students respond by mentioning cash, bank transfers, etc., and listen attentively to the introduction.

Learning Point: Introduction to payment methods

Step 2: Cash Payments (Legal Tender)

Time: 8 minutes

Teaching Skill: Explanation/Identification

Teacher’s Activity: The teacher displays sample coins and bank notes, explaining that these are forms of cash and are considered legal tender. The teacher describes their characteristics and use in transactions.

Pupils’ Activity: Students observe the samples, identify coins and bank notes, and listen to the explanation of legal tender.

Learning Point: Cash and legal tender

Step 3: Credit and Payment in Arrears

Time: 7 minutes

Teaching Skill: Explanation/Comparison

Teacher’s Activity: The teacher explains the concept of credit, providing simple examples of how people buy on credit. The teacher then explains payment in arrears, distinguishing it from advance payment.

Pupils’ Activity: Students listen, ask questions for clarity, and identify situations where credit or payment in arrears is used.

Learning Point: Credit and deferred payments

Step 4: Bank Payments – Cheque, Western Union, MoneyGram

Time: 7 minutes

Teaching Skill: Description/Illustration

Teacher’s Activity: The teacher introduces bank payments, focusing on cheques. A sample cheque is shown, and its components (drawer, drawee, payee, amount) are explained. The teacher then describes Western Union and MoneyGram as international money transfer services.

Pupils’ Activity: Students observe the sample cheque, ask questions about its use, and understand the functions of Western Union and MoneyGram.

Learning Point: Cheques and money transfers

Step 5: Bank Payments – Electronic Money Transfer (EMT) and Credit Card

Time: 6 minutes

Teaching Skill: Explanation/Modernisation

Teacher’s Activity: The teacher explains Electronic Money Transfer (EMT) and how it works through online banking or mobile apps. The teacher also describes credit cards, their use, and the concept of borrowing for purchases.

Pupils’ Activity: Students engage in discussions about online payments and credit card usage, sharing any personal experiences or observations.

Learning Point: Electronic and card payments

Step 6: Bank Payments – Standing Order and Bank Draft

Time: 5 minutes

Teaching Skill: Definition/Application

Teacher’s Activity: The teacher explains the purpose and operation of a standing order, giving examples of recurring payments. The teacher then describes a bank draft, highlighting its security and use for guaranteed payments.

Pupils’ Activity: Students listen to the explanations, understand the practical applications of standing orders and bank drafts, and ask clarifying questions.

Learning Point: Standing orders and bank drafts

Step 7: Evaluation/Review

Time: 5 minutes

Teaching Skill: Questioning/Assessment

Teacher’s Activity: The teacher evaluates the learning by asking the following questions:

1. What is legal tender? Give two examples.
2. Explain the difference between credit and payment in arrears.
3. List three methods of payment that involve banks.
4. Describe how a cheque works.
5. What is the main advantage of using a bank draft?

Pupils’ Activity: Pupils answer orally and in writing.

Learning Point: Understanding payment methods

Step 8: Note-Taking

Time: 4 minutes

Teaching Skill: Guided Writing

Teacher’s Activity: The teacher guides pupils/students to copy the essential Board Summary notes on various means of payment into their notebooks.

Pupils’ Activity: Pupils/students copy the notes carefully into their notebooks.

Learning Point: Recording lesson content

Step 9: Conclusion

Time: 3 minutes

Teaching Skill: Summarising/Reinforcement

Teacher’s Activity: The teacher briefly summarises the importance of understanding different payment methods in commerce and encourages students to observe how these methods are used in real-world transactions.

Pupils’ Activity: Students listen to the summary and prepare for the next lesson.

Learning Point: Reinforcing payment concepts

Continuous Assessment/Further Study

Type: Homework

Instruction: Research and write a short paragraph on each of the following:

1. The role of the Central Bank of Nigeria in issuing legal tender.
2. The difference between a debit card and a credit card.
3. How mobile money agents facilitate electronic money transfers in rural areas.

Lesson Keywords

• Legal Tender – Currency that is officially recognised as a means of payment for all debts.
• Credit – An agreement to pay for goods or services at a future date.
• Arrears – Payments made after they are due, or for services already received.
• Cheque – A written order to a bank to pay a stated sum from an account.
• Western Union – A global service for transferring money quickly.
• MoneyGram – Another international service for sending and receiving money.
• EMT – Electronic Money Transfer, moving funds between accounts digitally.
• Credit Card – A card allowing payment for goods/services by borrowing money.
• Standing Order – An instruction to a bank to make regular fixed payments.
• Bank Draft – A cheque issued by a bank, guaranteeing payment.

Differentiation

For struggling learners: Provide simplified definitions and visual aids for each payment method. Focus on identifying and giving one simple example for each. Use peer tutoring with stronger students.
For advanced learners: Encourage them to research the advantages and disadvantages of each payment method for both buyers and sellers. Ask them to discuss the security implications of different digital payment methods.

Suggested Lesson Videos

For further understanding, search on YouTube for:

• “Different methods of payment in commerce SS3”
• “Understanding bank drafts and standing orders”
• “How electronic money transfer works”

Teacher Guide for Using This Lesson Plan

Before the lesson, ensure you have gathered all necessary instructional materials, such as sample currency, a blank cheque, and images of credit cards or money transfer receipts. Begin by engaging students with real-life scenarios of payments. When describing each payment method, use clear, simple language and provide practical examples relevant to the Nigerian context. Encourage students to ask questions and share their own experiences. For bank-related payments, a simple diagram on the board illustrating the flow of money can be very helpful. During the note-taking stage (Step 8), ensure students copy the Board Summary accurately. Pay close attention during the evaluation to identify any misconceptions and address them promptly. Support weaker learners by simplifying explanations and providing additional examples, while challenging faster learners with deeper questions about the implications and security of different payment systems.