1. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Electronic Banking Take Charge of Your Finances

2. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Electronic Banking Electronic Funds Transfer (EFT) is the electronic movement of money that allows electronic banking or e- banking to be accomplished. E-banking allows a person to make withdrawals, deposits, and bill payments by one of the following methods: –Phone –Computer –Automated teller machine (ATM) –Point of sale terminal (POS)

3. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Electronic Banking Benefits of e-banking include: –24 hour access –Fast transactions –Paperless transactions –Convenience –Worldwide access

4. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Debit Cards Debit Cards are plastic cards, which look like credit cards, but are electronically connected to a card holder’s depository institution account. –Money is automatically withdrawn from the designated account when a purchase is made. Debit cards can be used when there is not enough money in the account, which will result in a non- sufficient fund fee. For added protection, sign the back of a debit card in the signature box with “see id.” –This will prompt the vendor to match a picture id and name to the individual using the debit card.

5. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Personal Identification Numbers Debit cards require the use of PIN (Personal Identification numbers). Personal Identification Number (PIN) is a number that is entered in at an Automated Teller Machine (ATM) or Point of Sale Terminal (POS) This confirms that the individual is authorized to access that particular account.

6. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Consumer Liability According to the Federal Trade Commission, a consumer is held liable for any unauthorized charges under the following conditions: –If timely notice is given of lost or theft to the depository institution within two business days: The consumer is held responsible for no more then $50. –If the institution is not notified within the first two business days, but within the first 60 days: The consumer is held liable for no more then $500. –If the institution is notified after the first 60 days: The consumer is held liable for no more than the amount of the unauthorized transfers.

7. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Automated Teller Machines Automated Teller Machines (ATM’s) are electronic computer terminals which offer automated, computerized banking. Transactions allowed may include: –Deposits –Cash withdrawals –Transfers between accounts –Account balance information Some ATMs may only allow cash withdrawals

8. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona ATMs continued ATMs can be found at various places –Examples: depository institutions, supermarkets, convenience stores. ATMs are accessed with an ATM or debit card and a PIN. Fees may be charged for ATM use, but will vary depending on the particular depository institution.

9. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Point of Sale Terminal Point of Sale Terminal (POS), are located at stores and allows the customer to use a debit card to make a purchase. –A debit card’s magnetic strip is swiped through the POS. –After the required PIN is provided, the transaction is authorized. –If the purchase is under $25.00 a signature may not be required. At participating POS terminals customers may request additional cash back.

10. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Direct Deposit –Paychecks and benefit checks are directly deposited into a specified depository institution account. The customer signs an authorization form with his or her employer to authorize the electronic deposit.

11. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Direct Payment Direct Payment authorizes bills to be paid by a specific depository institution account. –This can be done for fixed and flexible expenses. Examples include: Mortgages, vehicle payments, phone bill The customer signs an authorization form to allow the business to deduct funds from the account each billing period. Consumers are responsible for frequently checking their account to ensure that the correct amount was withdrawn.

12. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Payroll Cards Payroll cards offer an alternative to printing and mailing a paycheck to employees. Payroll cards function in a similar way as debit cards. These reloadable cards are often linked to a credit card company, allowing employee’s to withdraw money from the ATM or to purchase goods and services through a POS. Employers use payroll cards as an alternative to printing and sending paychecks. Consumers must be aware that payroll cards are not linked to a depository institution account.

13. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Check 21 Check Clearing for the 21 st Century Act (Check 21) Transfers checks electronically. This eliminates most or all float time. Float time is the time between writing the check to when the money is withdrawn from the depository institution account. Check 21 has made is possible for writing a check to be processed as quickly as using a debit card.

14. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Pay by Phone Pay by Phone system allows the consumer to call a vendor with instructions to pay certain bills or to electronically transfer funds between accounts. A written agreement between the consumer and the institution must be in place for a transaction to occur.

15. 1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Review Benefits include 24-hour access and convenience. Debit cards offer the benefits of a credit card without building debt. Direct deposits offer convenience to customers who have checks directly deposited into their account automatically. Direct payment allows bills to be paid electronically.