1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Electronic Banking Information on Types of Electronic Banking

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Electronic Banking Outline Introduction Areas –Home Banking –Automated Teller Machine (ATM) –Debit Card –Direct Deposit & Payment –Smart Card & Stored-Value Card Lost or Stolen Card Safety Current Trends Future Trends Review

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Introduction What is electronic banking or e-banking? –Electronic access to bank accounts and cash –24 hour access –Moves money without paper How is this possible? –Electronic Funds Transfer (EFT) –EFT uses computer networks to transfer money electronically among bank accounts

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman EFT continued People can –Make withdrawals –Deposit money –Pay bills Free or fees of $3 - $10 per month Accessed through ATMs, the internet, and debit cards

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Benefits of E-banking 24-hour access Fast No paper Variety of methods Convenience Worldwide access

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Types of E-Banking Debit Card ATMs Direct Deposit and Payment Smart Card Stored-Value Card Home banking

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Debit Cards Debit Card –A plastic card, which looks like a credit card, connected to a person’s bank account Money is automatically withdrawn from the account when a purchase is made Customer specifies which account is linked to the card

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman How to Use a Debit Card Provides access to the EFT system by swiping the card through an ATM or POS terminal Customer signs a receipt and/or enters a PIN to okay the transaction PIN is a personal identification number used to access bank accounts –Confirms the user of the card is authorized to access the account

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Debit Cards Debit cards can be used with: –Automated Teller Machines (ATM’s), which are electronic computer terminals that offer automated, computerized banking –Point of Sale Terminal (POS), which is located at a store and allows the customer to use a debit card to make purchases

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Automated Teller Machines ATMs or cash machines –Electronic computer terminals which offer automated, computerized banking 24-hour access to personal bank accounts –Receive an ATM card from financial institution ATMs can be found at various places –Examples: financial institutions, supermarkets, convenience stores

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman ATMs continued Transactions allowed may include: –Deposits –Cash withdrawals –Transfers between accounts –Account balance information Some ATMs may only allow cash withdrawals Need a PIN to access accounts at an ATM –New ATMs may read a person’s face, fingerprint, or the eye’s iris to confirm identity

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman ATMs continued ATMs are usually free of charge for customers using his/her financial institution’s ATM May be charged fees at ATMs of other financial networks (around $2.00) –In addition, may be charged by own financial institution to use another network’s ATM Fee will be posted on the ATM

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman How to Use the ATM Insert ATM card into the slot Enter PIN Perform the desired transaction Keep printed receipt to compare with monthly bank statement Remember to take the ATM card when finished

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman ATM Do’s & Don’ts Never choose a PIN easily associated with the user –Example: birthday, address, phone number Don’t choose repetitive or consecutive PINs Don’t write PIN down where the card is kept Shield screen from onlookers Leave if something suspicious happens –Cancel transaction, take the card, leave, and report it to local law enforcement and financial institution

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Dual Function Cards Some cards are dual function –An ATM and a debit card all in one *Contact the financial institution to see if they offer dual function cards

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Direct Deposit –Paychecks and benefit checks are directly deposited into a specified bank account Customer signs an authorization form to allow the electronic deposit Can prevent check fraud –Money is automatically deposited instead of multiple people handling the check

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Direct Payment –Authorize bills to be paid by a specific bank account Can be done for fixed and flexible expenses –Mortgages, vehicle payments, phone bill Customer signs an authorization form to allow the business to deduct the funds from the account each billing period

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Smart Card Smart card –A card with a built-in computer chip to store prepaid amounts of money Money is electronically loaded onto the card Automatically deducted with each purchase Re-loadable –Can keep adding money to the card to re-use it –Like cash, if stolen it can be used by someone else Examples: some university ID cards, phone card

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Stored-Value Card Store-Valued Card –Similar to a smart card but not re-loadable Once the funds are used, the card is disposed Examples – store gift cards, phone cards

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Home Banking Home banking –banking from the phone or computer with internet access Touch-tone phone –Call the designated number to perform account transactions –Log into the system using account number and PIN (personal identification number)

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Home Banking continued Services available on phone banking: –View account balances –Transfer money between accounts –Change PIN –Loan calculators –Check verification –Report lost or stolen ATM and debit cards

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Home Banking continued Computer with Internet Access –Go to the financial institution’s Web site to access computer banking –Log on with social security number and password –Check with the financial institution about any fees charged to use Internet banking

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Home Banking continued Services available on internet banking: –Check account balances –Transfer money between accounts –Stop check payments –Pay bills –Order checks –Apply for loans and credit cards

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Lost or Stolen ATM / Debit Cards Report immediately to financial institution If reported within 2 business days, cardholder only liable for $50.00 After 2 business days, cardholder can be liable for up to $500.00

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman ATM / Debit Cards Safety Sign the back of the card and write see ID Keep PIN hidden –Do not write it down where the card is kept Memorize the PIN Protect the PIN –Do not tell others –Shield the PIN with body at ATMs –Do not give it out over the phone or via

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Safety continued Change the PIN if it is suspected someone else knows it Be ready to transact business quickly –Have everything ready for the transaction Write down the card number and financial institution contact information –Store it in a safe place separate from the card in case the card becomes lost or stolen

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Safety continued Plan activities so it will not be necessary to use the ATM after dark Use an ATM located inside a supermarket or other place of business Use a drive-up ATM –Keep car doors locked Be aware of the surroundings –If anything suspicious happens, leave and report anything unusual

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Current Trends Check Clearing for the 21 st Century Act (Check 21) –Transfers checks electronically Float time (time between writing the check to when the money is withdrawn from the bank account) is only hours instead of days –Withdraws money from account almost immediately Must have money in account before writing check Eliminates paper trail

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Future Trends E-banking is a continually changing market –Dual function (ATM & Debit) cards are an example Development of one card to function as a smart card, debit card, credit card, and ATM card Change from PIN accessed accounts to: –handprint, eye, fingerprint scans or voice commands

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Future Trends continued On-line bill payment –New and popular –Bill sent paperless via to the consumer who then authorizes payment of the bill electronically One-stop shopping will have more availability –Supermarkets and discount stores including banks with extended hours

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Review E-banking is the new trend for the banking industry Benefits include 24-hour access and convenience ATMs offer a way to get cash after bank hours Debit cards offer the benefits of a credit card without building debt

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Review continued Direct deposits offer convenience to customers who have checks directly deposited into their account automatically Direct payment allows bills to be paid electronically Smart cards and stored-value cards allow for more cash-less ways to make purchases Home banking offers customers account access via the telephone and computer

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman Review continued Lost or stolen cards need to be reported IMMEDIATELY Use ATM and debit cards safely Check 21 is a current trend in electronic banking Future trends will keep changing the way customers perform banking –Important to keep up to date with new trends and safety

1.7.2.G1 © Family Economics & Financial Education – Revised May 2005 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman THE END