3.4 Electronic Monetary Processing

Overview

Demonstrate and apply knowledge and understanding of:

− EFT and identify the advantages and disadvantages to the customer and the vendor

− the operation of a typical ATM in terms of facilities offered

− a typical POS system used in a supermarket− the use of chip and pin− the use of barcode technology

Electronic Funds Transfer

Advantages to customer

• Can work with different currencies easily

• Do not have to carry as much cash around

• Can obtain cash back from an EFT transaction

Disadvantages to customer• Money is removed from the

account straight away

Electronic Funds Transfer

Advantages to vendor• Payment is guaranteed• Less handling of cash and

chance of robbery• Reduced forgery incidents

Disadvantages to vendor• Equipment is expensive• Specialised equipment is

needed• Transactions sometimes do

not go through until the end of the day

ATM

Features• Can withdraw cash• Change a PIN• View/print a statement• View/print a balance• Order a cheque book

EFTPOS

• A checkout connected to a computer with a bar code reader that can transfer money from customer accounts to pay for the goods

Chip and pin

• Can store more data than a magnetic stripe

• Information on the chip can be processed

Barcode technology

• Normally has 13 digits• The thick and thin bars are

read by laser• Collected data is compared

to the overall database and the price etc returned to the POS

Contains:• Product code• Manufacturer code • Country of origin• Check digit

Acronyms

• ATM: Automatic Teller Machine• EFT: Electronic Funds Transfer• POS: Point of Sale• EPOS: Electronic Point of Sale

Terminal• EAN: European Article Numbering• PIN: Personal Identification Number• EFTPOS: Electronic Funds Transfer Point

of Sale

Associated words

• Smart card• Loyalty card• Credit card• Debit card

Discussion

“We are heading towards a cashless society.”

Discuss this statement.