Banking Applications (Cambridge International IGCSE ICT)

ATM

What is an ATM?

• An Automatic Teller Machine (ATM) is used in the banking industry to provide customers with convenient access to financial transactions 24/7

• Characteristics and uses of ATMs:

  • Withdrawing cash: Obtain money from a bank account
  • Depositing cash or cheques: Add funds to a bank account
  • Checking account balance: View the current balance of a bank account
  • Mini statements: Obtain a summary of recent transactions
  • Bill paying: Settle utility bills and other payments
  • Money transfers: Sending funds to another bank account

Advantages and disadvantages of ATMs

EFT

What is EFT?

• Electronic Funds Transfer is a way of moving money from one account to another

• EFT is used primarily for:

  • Salary deposits
  • Bill payments
  • Online purchases

EFTPOS

• Electronic Funds Transfer Point Of Sale (EFTPOS) is used by retailers to allow customers to make purchases using a debit/credit cards

• The process involves:

  • Data being read from the chip (using RFID / NFC if it's a contactless payment)
  • The business bank's computer contacts the customer’s bank's computer
  • The card is checked if it is valid
  • If the card is valid the transaction continues
  • If it is not valid the transaction is terminated
  • An authorisation code is sent to the business
  • The price of the item is deducted from the customer’s account
  • This money is added to the business' account

Advantages and disadvantages of EFT

Internet Banking

What is internet banking?

• Internet banking is a secure online platform for accessing and controlling a persons bank account
• Internet banking can be accessed via the internet through a secure website or by using the bank's official app on a smartphone
• Internet bank allows for transfers, bill payments, account management and much more

Advantages and disadvantages of Internet banking

Exam Hint Sometimes the question will be about advantages and disadvantages of going to the bank rather than using online banking. Read the question carefully (you can reverse the statements in the table above)

Worked Example Adam is paying his bill in a restaurant using a contactless debit card. Describe the computer processing involved in Electronic Funds Transfer (EFT) using contactless cards.

[4]

Answer

Four of:

Final answer: The reader checks the amount to pay is less than the contactless limit [1] The data is read from the chip using RFID / NFC [1] The restaurant’s bank's computer contacts the customer’s bank's computer [1] The card is checked if it is valid [1] If valid the transaction continues [1] If not valid the transaction is terminated [1] An authorisation code is sent to the restaurant [1] The price of the meal is deducted from the customer’s account [1] Added to the restaurant’s account [1]