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Banking Applications

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12 views3 pages

Banking Applications

Uploaded by

p14.ksiniya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Banking Applications Week 2

Banking Applications

Online banking systems depend on the ability to update files instantly to avoid double
scheduling, which might occur if the system reaction time is slow.

The use of computer technology has revolutionised how we do our banking transactions, for
example:
- Internet banking
- The use of automated teller machines (ATMs)
- Chip and PIN technology
Automated Teller Machines (ATMs)

Automated teller machines (ATMs) are places where customers can get cash (or carry out certain
other banking activities, such as ordering a statement) using their credit or debit card.

Sequence at ATM What goes on behind the scenes

Customer puts card into ATM Contact is made with bank’s computer

PIN is entered using the keypad PIN is checked to see if it is correct


Card is checked to see if it is valid
The transaction is closed if the card is stolen or
the number of PIN attempts allowed is
exceeded.
Several options are given: change PIN, pay in
cheques, pay a bill, see balance, get money

The customer selects the cash option & several


cash options are shown

The customer accepts one of the options or The customer’s account is accessed to see if
types in a different amount they have sufficient funds, it is checked to see if
they are withdrawing more than their daily limit.
If the limit is not exceeded and all other checks
are OK, then the transaction is authorised, and
the machine then counts out the cash
The customer is asked if they want a receipt

The card is returned

Money is dispensed Customer’s account is updated

Advantages:

possible to withdraw at any time of the day


offer many banking services without having to go to the bank
possible to access an account from anywhere in the world
usually provides quicker service than waiting in a queue at a bank

Disadvantages:

often in places where theft can take place at night


potential for shoulder surfing
some banks charge customers for using ATMs
cash withdrawal limits are often imposed on people
Banking Applications Week 2
Electronic Funds Transfer (EFT):

It is possible to send money transfer instructions directly to a bank's computer system via
electronic funds transfer (EFT) technology. The system depends on electronic money transfers
between accounts; no cash is moved. The computer system automatically moves the requested
amount from one account to another when it receives an EFT command.

Advantages:
very secure payment method
very quick payment method
less expensive than cheques
the customer has the right to dispute an EFT payment for up to 60 days

Disadvantages:
the bank transaction can’t be reversed without full dispute investigations
customer needs to have funds available immediately
cannot guarantee the recipient’s identity

Credit/debit card transactions

Several credit/debit cards come with a magnetic stripe and a chip; the chip houses essential data
like the PIN. This technique is intended to increase security because it is superior to a signature. A
chip and PIN card to make purchases is an example of an electronic funds transfer (EFT).

Advantages of credit cards:


customer protection if ordered goods don’t arrive
internationally accepted payment method
interest-free loan if money is paid back within the agreed time period
can make purchases online
Disadvantages of credit cards:
can be charged high interest rates
annual fees often apply
easy to end up with credit damage
security risks in online transactions

Advantages of debit cards:

money comes from the user’s current account, there is no interest


safer than carrying cash
can make online purchases

Disadvantages of debit cards:

less customer protection if goods don’t arrive


no credit allowed; funds are needed at the time of purchase
security risks in online transactions
Banking Applications Week 2
Cheques

Individuals and organisations use cheques as a form of payment. When issuing a cheque, the
payer writes the recipient's name, the payment amount, and the date on the cheque. The recipient
then deposits or presents the cheque to their bank for processing. The payer's bank verifies the
fund’s availability, and upon clearance, the specified amount is transferred from the payer's
account to the recipient's account, completing the transaction.

Advantages:
more convenient and safer than cash
can be post-dated
can be traced if they are lost

Disadvantages:
aren’t legal tender and can be refused
slow method of payment
easier for fraudsters than other methods
relatively expensive payment method

Internet Banking
Enable online access to banking services via a secure website or app, allowing for transfers, bill
payments, account management, and more.

Advantages:
convenience and availability
easy account management
branch visiting won’t be a requirement
interest rates may be better
more accessible to shop around for the best account

Disadvantages:
security of transactions
requires a reliable internet connection
More risk of fraud
Easier to make errors
Physical cash can't be deposited/withdrawn

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