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Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 CEL: Computers in Banking and Retail Name: _____________________.

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Presentation on theme: "Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 CEL: Computers in Banking and Retail Name: _____________________."— Presentation transcript:

1 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 CEL: Computers in Banking and Retail Name: _____________________ Class: ____________ Part 1: Electronic Fund Transfer Part 1 [Sec 2-4]

2 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 Objectives 1.Understand what is meant by electronic funds transfer 2.Give examples of situations where electronic funds transfer can take place 3.Understand that computers in different locations are linked together and centrally controlled to enable electronic funds transfers

3 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 What is Electronic Fund Transfer [EFT]? Video on Computers in Banking and Retail

4 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Electronic Fund Transfer Electronic Fund transfer refers to any transfer of fund [money] by electronic means [such as electronic terminal, computer, ATM and etc]

5 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 How does Electronic Fund Transfer [EFT] work?

6 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL The Bank Network For EFT to work, Computers in the bank have to be –Centrally controlled –Be linked together / networked (via telephone line) Data and information are organised for ease of storage and for retrieval and processing. Data and information are stored in the central computer and these data can be shared amongst the computers networked in different locations Funds then can be transferred from one account to another

7 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Electronic Fund Transfer For EFT to work, The computers: –Central –Networked Data and information is organised for ease of –storage –processing –retrieval

8 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Electronic Fund Transfer Central computer s Networked Computer at Customer Computer at Merchant

9 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Electronic Fund Transfer Is depositing coins and dollar notes in the bank an example of Electronic Fund transfer ? Is coins or dollar notes countering machine an example of Electronic Fund Transfer? No

10 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Electronic Fund Transfer Is clearing cheques using the Magnetic Ink Character Reader an example of Electronic Fund transfer? No

11 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Electronic Fund Transfer Is transferring your salary from your company’s bank account to your bank account an example of Electronic Fund Transfer? Yes Why?

12 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 Some examples of Electronic Fund Transfer [EFT]

13 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Buying Things the Traditional Way

14 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Buying Things the Traditional Way Disadvantages of the traditional way –Potential theft –Accounting cost –Interest lost

15 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Buying Things the EFT Way

16 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Examples of Electronic Funds Transfers What is this system known as? Example 1: NETS (Network for Electronic Transfers) When you pay by NETs, the computer transfers money directly from your bank account into the shop’s account.

17 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 What is NETs? [Network for Electronic Transfers] How does it work?

18 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 NETS [ Network for Electronic Transfers] It is a special arrangement between shops and banks. automaticallyWhen you pay by NETs, the amount of money is automatically transferred (debited) from your bank account to the shop's bank account. Your bankcard works like a debit card. Every time you use it, the amount spent will be debited from your bank.

19 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 NETS [Network for Electronic Transfers] Each time you perform such a transfer, you must enter your Personal Identification Number (PIN) in order to authorise the transaction. The computer will check (authenticate) whether your PIN is valid and correct with the central data bank before transferring your money to the shop’s bank account.

20 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 NETS [Network for Electronic Transfers] This way you do not have to carry a lot of cash around. You can use your card to pay for purchases at retail shops, supermarkets etc. Do we need to carry cash for buying things? NO

21 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Examples of Electronic Funds Transfers Example 2: Giro nstructing A method of transferring money by instructing a bank to directly transfer funds from one bank account to another without the use of cash. Some situations where Giro could be used: (To pay school fees, PUB bills, Singtel bills)

22 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Examples of Electronic Funds Transfers How does the Giro work? 1.You can authorise your bank to pay bills (eg. School fees, PUB bill, telephone bill) as to the date, amount and which account to pay to. 2.On that date, the bank will automatically transfer the amount from your bank account into the bank account you are paying to [eg. MOE]. 3.To stop the service, you must write to the bank to cancel the service.

23 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Examples of Electronic Funds Transfers How does the Giro work? 1.Do you need to remind the bank to pay every month ? 2. Do you need to enter your PIN for each transfer? 3. Could money be transferred from one bank to the same bank? 4. Could money be transferred from one bank to a different bank? No Yes

24 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Other Examples of Electronic Funds Transfers Ez-link card transportation Example: use computers to collect bus fares instead of bus conductors

25 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Other Examples of Electronic Funds Transfers transportation Cash card

26 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Other Examples of Electronic Funds Transfers

27 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 What are the characteristics of Electronic Fund Transfer [EFT]?

28 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Electronic Fund Transfer Characteristic of EFT are: –No cash is involved –Computers are used –Money is in digital stored value

29 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Electronic Fund Transfer Became popular only with secure electronic communication

30 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Advantages of Electronic Funds Transfers Do not need to carry much cash around. Faster speed as we save time as there is no need to count money. Save travelling time as there is no need to travel to transfer money/ do banking

31 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Disadvantages of EFT Unreliability of technology – once the bank network is down all transactions cannot be carried out. Loss of human interaction Fraud Hackers can hack into our accounts and steal our money

32 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 Digital Cash

33 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 Digital cash –Forms of money (media of exchange) that are not physical in nature and exists “digitally” –A new form of cash –No physical form –Cannot hold it in your hands, can only use it electronically 1.6 Digital Cash

34 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL 2 Your bank account balance is digital cash 1.6 Digital Cash

35 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Electronic Fund Transfer Q&A 1.Electronic Fund transfer is the transfer of money from one account to another through computer network. 1. What is electronic fund transfer?

36 Computers in Banking and Retail CEL : C O M P U T E R S I N E V E R Y D A Y L I F E CEL Summary EFT: Transfer money electronically No cash Use of Computers - NETS: Network Electronic Transfers System -Transfer money automatically from my bank account to the merchant account -GIRO -Give instruction to my bank to transfer money automatically from my bank account to another account


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