1. CEL: Computers in Banking and Retail
Computers in Banking and Retail - Part 1 Electronic Fund Transfer
CEL: Computers in Banking and Retail
Part 1: Electronic Fund Transfer
Part 1 [Sec 2-4]
Name: _____________________
Class: ____________
Prepared by Tan Chai Yong

2. Computers in Banking and Retail - Part 1 Electronic Fund Transfer
Objectives
Understand what is meant by electronic funds transfer
Give examples of situations where electronic funds transfer can take place
Understand that computers in different locations are linked together and centrally controlled to enable electronic funds transfers
Prepared by Tan Chai Yong

3. What is Electronic Fund Transfer [EFT]?
Video on Computers in Banking and Retail

4. Computers in Banking and Retail - Part 1 Electronic Fund Transfer
Electronic Fund transfer refers to any transfer of fund [money] by electronic means [such as electronic terminal, computer, ATM and etc]
Prepared by Tan Chai Yong

5. How does Electronic Fund Transfer [EFT] work?

6. 1.1 The Bank Network For EFT to work, Computers in the bank have to be
Centrally controlled
Be linked together / networked (via telephone line)
Data and information are organised for ease of storage and for retrieval and processing.
Data and information are stored in the central computer and these data can be shared amongst the computers networked in different locations
Funds then can be transferred from one account to another

7. Computers in Banking and Retail - Part 1 Electronic Fund Transfer
For EFT to work,
The computers:
Central
Networked
Data and information is organised for ease of
storage
processing
retrieval
Prepared by Tan Chai Yong

8. Computers in Banking and Retail - Part 1 Electronic Fund Transfer
Computer at Merchant
Central computers
Computer at Customer
Networked
Prepared by Tan Chai Yong

9. Computers in Banking and Retail - Part 1 Electronic Fund Transfer
Is depositing coins and dollar notes in the bank an example of Electronic Fund transfer ? No
Is coins or dollar notes countering machine an example of Electronic Fund Transfer? No
Prepared by Tan Chai Yong

10. Computers in Banking and Retail - Part 1 Electronic Fund Transfer
Is clearing cheques using the Magnetic Ink Character Reader an example of Electronic Fund transfer? No
Prepared by Tan Chai Yong

11. Computers in Banking and Retail - Part 1 Electronic Fund Transfer
Is transferring your salary from your company’s bank account to your bank account an example of Electronic Fund Transfer?
Yes
Why?
Prepared by Tan Chai Yong

12. Some examples of Electronic Fund Transfer [EFT]

13. 1.2 Buying Things the Traditional Way

14. 1.2 Buying Things the Traditional Way
Disadvantages of the traditional way
Potential theft
Accounting cost
Interest lost

15. 1.2 Buying Things the EFT Way

16. 1.2 Examples of Electronic Funds Transfers
What is this system known as?
Example 1:
NETS (Network for Electronic Transfers)
When you pay by NETs, the computer transfers money directly from your bank account into the shop’s account.

17. What is NETs? [Network for Electronic Transfers] How does it work?

18. NETS [Network for Electronic Transfers]
It is a special arrangement between shops and banks.
When you pay by NETs, the amount of money is automatically transferred (debited) from your bank account to the shop's bank account.
Your bankcard works like a debit card. Every time you use it, the amount spent will be debited from your bank.

19. NETS [Network for Electronic Transfers]
Each time you perform such a transfer, you must enter your Personal Identification Number (PIN) in order to authorise the transaction.
The computer will check (authenticate) whether your PIN is valid and correct with the central data bank before transferring your money to the shop’s bank account.

20. NETS [Network for Electronic Transfers]
Do we need to carry cash for buying things? NO
This way you do not have to carry a lot of cash around. You can use your card to pay for purchases at retail shops, supermarkets etc.

21. 1.2 Examples of Electronic Funds Transfers
Giro
A method of transferring money by instructing a bank to directly transfer funds from one bank account to another without the use of cash.
Some situations where Giro could be used:
(To pay school fees, PUB bills, Singtel bills)

22. 1.2 Examples of Electronic Funds Transfers
How does the Giro work?
You can authorise your bank to pay bills (eg. School fees, PUB bill, telephone bill) as to the date, amount and which account to pay to.
On that date, the bank will automatically transfer the amount from your bank account into the bank account you are paying to [eg. MOE].
To stop the service, you must write to the bank to cancel the service.

23. 1.2 Examples of Electronic Funds Transfers
How does the Giro work?
Do you need to remind the bank to pay every month ?
2. Do you need to enter your PIN for each transfer?
3. Could money be transferred from one bank to the same bank?
4. Could money be transferred from one bank to a different bank? No No
Yes
Yes

24. 1.2 Other Examples of Electronic Funds Transfers
transportation
Ez-link card
Example: use computers to collect bus fares instead of bus conductors

25. 1.2 Other Examples of Electronic Funds Transfers
transportation
Cash card

26. 1.2 Other Examples of Electronic Funds Transfers

27. What are the characteristics of Electronic Fund Transfer [EFT]?

28. Computers in Banking and Retail - Part 1 Electronic Fund Transfer
Characteristic of EFT are:
No cash is involved
Computers are used
Money is in digital stored value
Prepared by Tan Chai Yong

29. Computers in Banking and Retail - Part 1 Electronic Fund Transfer
Became popular only with secure electronic communication
Prepared by Tan Chai Yong

30. 1.5 Advantages of Electronic Funds Transfers
Do not need to carry much cash around.
Faster speed as we save time as there is no need to count money.
Save travelling time as there is no need to travel to transfer money/ do banking

31. 1.5 Disadvantages of EFT
Unreliability of technology – once the bank network is down all transactions cannot be carried out.
Loss of human interaction
Fraud
Hackers can hack into our accounts and steal our money

32. Digital Cash

33. 1.6 Digital Cash Digital cash
Forms of money (media of exchange) that are not physical in nature and exists “digitally”
A new form of cash
No physical form
Cannot hold it in your hands, can only use it electronically

34. 1.6 Digital Cash
Your bank account balance is digital cash

35. Computers in Banking and Retail - Part 1 Electronic Fund Transfer
1.6 Electronic Fund Transfer Q&A
1. What is electronic fund transfer?
Electronic Fund transfer is the transfer of money from one account to another through computer network.
Prepared by Tan Chai Yong

36. 1.7 Summary EFT: Transfer money electronically No cash
Use of Computers
- NETS: Network Electronic Transfers System
Transfer money automatically from my bank account to the merchant account
GIRO
Give instruction to my bank to transfer money automatically from my bank account to another account