Electronic Payment

by Juan M Alonso l 4 A l ITGS l 2012

Electronic Fund Transfer (ETF)

Amounts transferred through accounts

Money transfer instructions Bank’s computer system

Other banks / Businesses

Bank Computer System

ETF Instruction

Business

Toys Max Inc.

-$4000Pay employees

Employees´ Accounts

+$2000+$1000+$1000

Toys Max Inc.

Using Cash Machines (ATMs)

Banking services

Withdrawing cashDepositing money

Checking the balance of accountsTransferring money between accounts

Paying bills

Bank card

identifies a customer and their bank account

inserted

Smart card reader

Magnetic strip reader

read by

secret PIN to numeric pad

ATM

Consumer

ETF compatible

customer of Red Bank uses her debit card to withdraw cash from an ATM belonging to Blue Bank

owed money by

ETF instruction to transfer money from account to Blue Bank

ELECTRONIC PAYMENTS FOR GOODS (EFTPOS)Banks allow goods to be paid for electronically, using a system called Electronic Fund Transfer at Point-of-Sale (EFTPOS).

Point-of-SaleIt is the place in a store where you pay for your

purchases. It is usually where the till (cash register) is located.

Method of inputting codes (bar-code scanner) to find info about goodsSystem to accept EFTPOSSystem to update stock-level and automatically re-order goods

Method producing receipts (small dot-matrix printer)

HANDLING EFTPOSThe Electronic Fund Transfer at Point-of-Sale system is used when paying with a bank card.

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Enter PINEnter value of purchase

Can account number 63842 afford $100?

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access the customer’s record with account number nd checks the balance

Client affords $100

EFT message: transfer $100 from account 63842 to store’s account

Account 63842

Store’s account

- $100 +$100

8 Cashier returns credit card with receipt

'Chip & PIN' Payment System• Smart cards with small amount of computer memory (chip) with the account information stored inside.• more secure (encrypted data) and more reliable than magnetic strip cards• PIN (Personal Identification Number) as identity proof

Automatic Re-Ordering of StockGoods sold, POS system sends details of sale to stock-control systemstock-control system updates stock-levels in the stock database for purchased goods

If stock-level falls below a pre-set value, stock-control system sends order to suppliers

Suppliers send a delivery to store

Stock-control system updates stock-levels in stock database for the delivered goods

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Internet Shopping (e-Commerce)• Increasing popularity• large retail businesses :

Customers purposes

Convenience: browse goods from your homeopen 24 hours every day of the year

wider range of choice

limited mobility

often cheaper than in stores

Payment is simple using credit cards or services such as PayPal

Businesses purposes

Lower costs since no expensive retail stores and less staffLower costs = lower selling prices = higher sales = bigger profitsmore potential customers

PROBLEMS

cannot try items before purchasing (e.g. clothes)

wait several days before receiving your goods

Returning goods or getting help can be difficult

security risk using credit cards online. The card details may be stolen and used to commit fraud.

http://www.igcseict.info/theory/7_2/bank/index.html

http://www.crimeresearch.org/news/16.08.2005/1431/

Images from Google

Bibliography