Electronic Fund Transfer (EFT)

Definition:
Electronic Fund Transfer (EFT), uses computer and electronic
technology as a substitute for checks and other paper transactions.

EFTs are initiated through devices like cards or codes that let you, or
those you authorize, access your account.

Many financial institutions use ATM or debit cards and Personal

Identification Numbers (PINs) for this purpose
Electronic Fund Transfer (EFT)

Components of EFT:
•Automated Teller Machines or 24-hour Tellers are electronic
terminals that let you bank almost any time. To withdraw cash, make
deposits, or transfer funds between accounts, you generally insert an
ATM card and enter your PIN.

•Direct Deposit lets you authorize specific deposits, such as

paychecks and Social Security checks, to your account on a regular
basis. You also may pre-authorize direct withdrawals so that
recurring bills, such as insurance premiums, mortgages, and utility
bills, are paid automatically.
Electronic Fund Transfer (EFT)

Components of EFT:
•Pay-by-Phone Systems let you call your financial institution with
instructions to pay certain bills or to transfer funds between
accounts. You must have an agreement with the institution to make
such transfers.

•Personal Computer Banking lets you handle many banking

transactions via your personal computer. For instance, you may use
your computer to view your account balance, request transfers
between accounts, and pay bills electronically
Electronic Fund Transfer (EFT)

Components of EFT:
•Point-of-Sale Transfers let you pay for purchases with a debit card,
which also may be your ATM card. The process is similar to using a
credit card, with some important exceptions.

•Electronic Check Conversion converts a paper check into an

electronic payment at the point of sale or elsewhere. In a store, when
you give your check to a store cashier, the check is processed
through an electronic system that captures your banking information
and the amount of the check. Once the check is processed, you're
asked to sign a receipt authorizing the merchant to present the
check to your bank electronically and deposit the funds into the
merchant's account.
History of Credit Card

Money:
Money is anything that is commonly accepted by a
group of people for the exchange of goods, services, or
resources. Every country has its own system of coins
and paper money. In the beginning, people bartered.
Barter is the exchange of a good or service for another
good or service, a fish for a bag of beans.

Metal objects were introduced as money around 5000

B.C. By 700 BC, the Lydians became the first in the
Western world to make coins. Countries were soon
minting their own series of coins with specific values.
History of Credit Card

Paper Money
China was perhaps one of the oldest introducing paper back money ,
where the issue of paper money became common from about AD
960 onwards.

With the introduction of paper currency

and non-precious coinage, commodity
money evolved into representative
money. This meant that what money itself
was made of no longer had to be very
valuable.
History of Credit Card

Credit:
Credit was first used in Assyria, Babylon and Egypt 3000 years ago.
The bill of exchange - the forerunner of banknotes - was established
in the 14th century. Debts were settled by one-third cash and two-
thirds bill of exchange. Paper money followed only in the 17th
century.
From the 18th century until the early part of the 20th, tallymen sold
clothes in return for small weekly payments. They were called
"tallymen" because they kept a record or tally of what people had
bought on a wooden stick. One side of the stick was marked with
notches to represent the amount of debt and the other side was a
record of payments.
Plastic Money

Credit Card:
•Credit is a method of selling goods or services without the buyer
having cash in hand. A credit card is only an automatic way of
offering credit to a consumer.
•Today, every credit card carries an identifying number that speeds
shopping transactions.

•In 1950, Diners Club and American

Express launched their charge cards in the
USA, the first "plastic money".

•In 1951, Diners Club issued the first credit card to 200
customers who could use it at 27 restaurants in New York.
Plastic Money

Credit Card:
•According to Encyclopedia Britannica, "the use of credit cards
originated in the United States during the 1920s, when individual firms,
such as oil companies and hotel chains, began issuing them to
customers."

•However, references to credit cards have been made as

far back as 1890 in Europe that involved sales directly
between the merchant offering the credit and credit card,
and that merchant's customer.

•Around 1938, different companies started accepting

each other's cards. Today, credit cards allow you to
make purchases with countless third parties
Plastic Money

Bank Credit Card

•The inventor of the first bank issued credit card was John Biggins of the
Flatbush National Bank of Brooklyn in New York.

•In 1946, Biggins invented the "Charge-It"

program between bank customers and local
merchants.

•Merchants could deposit sales slips into the

bank and the bank billed the customer who
used the card.

•American Express issued their first credit card in 1958. Bank of America
issued the Bank Americard (now Visa) bank credit card later in 1958.
Credit Card: How it Works

Shape of Credit Cards:

•Credit cards were not always been made of plastic. There had been credit
tokens made from metal coins, metal plates, and celluloid, metal, fiber, paper,
and now mostly plastic cards.

The Numbers in Credit Cards:

ANSI Standard X4.13-1983 is the system used by most credit-card systems.
Here are what some of the numbers stand for:
The first digit in your credit-card number
signifies the system:
•3 - travel/entertainment cards 4 - Visa
•5 - MasterCard
•6 - Discover Card
Credit Card: How it Works

The Numbers in Credit Cards:

The structure of the card number varies by system. For example, American Express
card numbers start with 37; Carte Blanche and Diners Club with 38.

American Express - Digits three and four are type and currency, digits five through
11 are the account number, digits 12 through 14 are the card number within the
account and digit 15 is a check digit.

Visa - Digits two through six are the bank number,

digits seven through 12 or seven through 15 are the
account number and digit 13 or 16 is a check digit.
MasterCard - Digits two and three, two through four,
two through five or two through six are the bank
number (depending on whether digit two is a 1, 2, 3 or
other). The digits after the bank number up through
digit 15 are the account number, and digit 16 is a
check digit.
Types of Credit Cards:

There are basically three types of credit cards:

Bank cards: issued by banks (for example, Visa,

MasterCard and Discover Card)

Travel and entertainment (T&E) cards: such

as American Express and Diners Club

House cards: that are good only in one chain of stores (Sears is the
biggest one of these in US, followed by the oil companies, phone companies
and local department stores.) T&E cards and national house cards have the
same terms and conditions .
Brands of Credit Cards:

The most popular brand names in credit cards are:

Master Card
VISA
American Express Card
Diners Club Credit Card
Brands of Credit Cards:

MASTER CARD

History
MasterCard® was founded in 1966 as the
Interbank Card Association (ICA) in the
United States.

In 1969, "Master Charge" was purchased by

the California Bank Association and in 1979, the
MasterCard brand was introduced.

Issuers began offering MasterCard in Canada 1973 and it is the

beginning of international move of Master Card.
Brands of Credit Cards:

MASTER CARD

Role of Master Card

Establish standards and procedures for the acceptance and settlement
of member transactions on a global basis.

Provide a global communications network for interchange – the

electronic transfer of information and funds among its members;

Develop marketing programs that build even greater awareness for the
brand, thereby increasing business for its members; and

Enhance and support the marketing activities and operational functions

of its members in connection with MasterCard programs and services.
Brands of Credit Cards:

VISA
History
Bank of America issued BankAmericard in 1958, the card was an
instant success.
In 1970, National BankAmericard Inc. (NBI) took over the charge of
managing, promoting and developing of BankAmericard.

In 1974, IBANCO, a multinational member

corporation, was founded in order to manage
the international BankAmericard program.

in 1977 BankAmericard became the Visa card,

NBI became Visa U.S.A., and IBANCO became Visa International.
Brands of Credit Cards:

VISA
Features
More than 1.3 billion Visa cards in circulation
Accepted at more than 24 million merchant locations in more than 160
countries
Cash access at more than one million ATMs
More than $3 trillion in global card sales volume
Largest processor of financial transactions in the world
Capable of processing more than 6,200 transactions a second
6,000 employees worldwide
21,000 Member financial institutions
Automated Teller Machines:

ATM
An automatic teller machine or automated
teller machine (ATM) is an electronic device
which allows a bank's customers to make
cash withdrawals and check their account
balances at any time without the need for a
human teller. Many ATMs also allow people to
deposit cash or cheques, transfer money
between their bank accounts or even buy
postage stamps.
Automated Teller Machines:

An automatic teller machine or automated

teller machine (ATM) is an electronic device
which allows a bank's customers to make
cash withdrawals and check their account
balances at any time without the need for a
human teller.
Many ATMs also allow people to deposit cash
or cheques, transfer money between their
bank accounts or even buy postage stamps.
These machines can now be found at most
supermarkets, convenience stores and travel
centers.
How Do ATMs Work?

An ATM is simply a data terminal with two input and four output devices.
the ATM has to connect to, and communicate through, a host processor.
ATMs connect to the host processor through a normal phone line or a
leased line.
The host processor may be owned by a bank or financial institution, or it
may be owned by an independent service provider.
Parts of an ATM

Card reader - The card reader captures

the account information stored on the
magnetic stripe on the back of an
ATM/debit or credit card. The host
processor uses this information to route
the transaction to the cardholder's bank.
Keypad - The keypad lets the
cardholder tell the bank what kind of
transaction is required (cash withdrawal,
balance inquiry, etc.) and for what
amount. Also, the bank requires the
cardholder's personal identification
number (PIN) for verification.
Parts of an ATM

An ATM has four output devices:

Speaker - The speaker provides the

cardholder with auditory feedback when a key is
pressed.
Display screen - The display screen prompts
the cardholder through each step of the
transaction process.
Receipt printer - The receipt printer provides
the cardholder with a paper receipt of the
transaction.
Cash dispenser - The heart of an ATM is the
safe and cash-dispensing mechanism. The
entire bottom portion of most small ATMs is a
safe that contains the cash.
Point-of-Sale (POS )

The physical machine that allows a

merchant to swipe a credit card through to
initiate a transaction, most common in retail
environments.

Point-of-Sale Transfers let one pay for

purchases with a debit card, which also may be
a ATM card.

a debit card purchase transfers money -

fairly quickly - from one’s bank account to
the store's account.
Thank You