Banking

Cheque processing An organisation receiving a cheque deposits it at the bank. The amount of money to be paid has already been written on the cheque by using magnetic ink character recognition(MICR) If the cheque is presented at the bank where the cheque originated, payment can be received immediately. If both parties have account at the same branch, the account of both parties are updated. However, a cheque originating from a different bank is sent to a central clearing house. Where the information at the bottom of the cheque is read by MICR reader and the cheque is sorted according to its bank of origin. The cheque are then sent to the originating bank so that the customer’s account can be updated.

Magnetic ink character recognition MICR reader

Electronic Funds Transfer (EFT) Is the movement of funds from one account to another electronically. Debit and credit cards and EFT is a step towards the ‘cashless society’. EFTPOS, Electronic Funds Transfer Point of Sale, refers to the technology that allows a retailer to directly debit a customer's bank account by using a debit card.

When customer pay for goods and service The customer gives the merchant card which read by the merchant’s EFT machine. Merchant enter the amount of money Customer enter the PIN or sign the receipt. If the account has funds to pay for transaction(debit card), or a reach credit card limit ( credit card), the money is deducted from the customer’s account immediately using EFT and deposited into the merchant’s account. The customer is issued with a receipt as proof of the transaction. If the customer fails to enter the correct PIN or has insufficient funds, a ‘failed transaction’ message will be displayed.