Checking Services and Credit-Card Transactions

Key Words 1. ATM cards 2. Cashier’s check 3. Money order 4. NSF 5. Notary Service 6. Online banking 7. Overdraft 8. Overdraft protection 9. Returned-deposit item 10. Stop-payment

ATM cards Used like a debit card (not exactly the same)—funds come directly from the customer’s account right away (does not need to be processed) Transaction Processing Companies ATM Card Debit Card

NSF Nonsufficient Funds- occurs when the customer does not have enough money to cover the cost of their purchase

Overdraft Occurs when a check is written, but there are NSF in the customer’s checking account The typical charge to the writer of the “bad” check is $20 to $35 per bad check. The same charge occurs when a check is returned because it was not filled out correctly.

Overdraft Protection Given when an account balance is insufficient to cover the amount of a check and an overdraft occurs. Charges vary among banks. The typical charge to the writer of the “bad” check is $20 to $35 per bad check. The same charge occurs when a check is returned because it was not filled out correctly.

Returned-deposit Item The name for a check that was returned due to insufficient funds in the account

Stop-Payment Order A request by a depositor that the bank not honor a check the depositor has written ($25 per request)

Cashier’s Check A check written by the financial institution itself. It guarantees funds ($8 per check) “A note of the bank”

Money Order A purchased document used in place of cash—considered safer than a business or personal check, but not as safe as a cashier’s check (many places will issue money orders) Usually cost about $4

The counterfeit cashier's check scam is a scheme where the victim is sent a cashier's check or money order for payment on an item for sale on the Internet. When the money order is taken to the bank it may not be detected as counterfeit for 10 business days or more, but the bank will deposit the money into the account and state that it has been "verified" or is "clear" in about 24 hours. This gives the victim a false feeling of security that the money order was real, so they proceed with the transaction. When the bank does find that the money order is counterfeit and reverses the account credit many days later, the customer will usually have already mailed the item.

Notary Service A service offered in which a person, recognized by the state government will witness the signing of a document—any official document must be notarized before it will be accepted by government authorities

Online Banking Banking on the Internet allows customers to perform many banking functions from their home or place of business. This service is occasionally free, but some institutions will charge for it.

Credit Cards Allows a consumer to spend based on a line of credit extended to them by a financial institution.

“Batching” What businesses call it when they submit logs of their credit card transactions to a “merchant account” for processing Sales Refunds (Credits) $82.31$146.50$13.83 $38.18$78.80$25.19 $178.22$63.14$78.56 $65.29$ Find sales total, refunds total, and the gross amount made by the company.

“Batching” Sales Refunds (Credits) $82.31$146.50$13.83 $38.18$78.80$25.19 $178.22$63.14$78.56 $65.29$ With those amounts, fill in a Merchant Batch Header Ticket:

“Discount Fee” The bank collects a fee (a percent of the credit-card sales) from the merchant (in addition to what they collect from the card holders). It is usually between 2 and 5%