Banking Applications (CIE IGCSE ICT)

Automatic Teller Machines (ATM) is an electronic banking terminal that provides customers with access to financial transactions

• 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: Send funds to another bank account

Advantages and disadvantages of ATMs

Advantages	Disadvantages
Convenient access to banking services	Risk of theft or fraud
Available 24/7	Limited services compared to bank branches
Reduced waiting time	Technical issues and machine downtime
Global access to funds	Fees for transactions at non-network ATMs

• Characteristics and uses of EFT:
  • Transfer of funds between bank accounts electronically
  • Utilised for bill payments, salary deposits, and online purchases
  • Utilises NFC in contactless payments
• The process of EFT:
  • The data is 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

Advantages	Disadvantages
Fast and efficient	Risk of online fraud
Reduces paperwork	Technical issues
Lower transaction costs	Requires internet connection

• Characteristics and uses of credit/debit card transactions:
  • Payment or withdrawal using a bank card
  • Accepted by most merchants and service providers

Advantages and disadvantages of credit/debit card transactions

Advantages	Disadvantages
Convenient and easy to use	Risk of theft or loss
Widely accepted	Potential for overspending
Secure with fraud protection	Transaction fees

• Characteristics and uses of cheques:
  • A written order to a bank to pay a specified amount to a designated person or entity
  • Can be used for various payments, including bills, services, and personal transactions

How do you deposit a cheque at an ATM?

• Customer is asked to enter their debit card in the ATM
  
• Customer’s bank computer is contacted
  
• The card details are searched in the bank database
  
• The card is checked to see if valid, in date or if it has been stolen
  
• The customer is asked to enter their PIN
  
• The PIN is compared to the PIN stored on the chip
  
• The customer is asked to deposit a cheque
  
• The system checks whether the cheque is valid
  
• The cheque is scanned by the ATM
  
• Amount is scanned
  
• The Bank account is checked for sufficient funds
  
• The image of the scan is saved
  
• The customer is asked to select the account to deposit money
  
• Money is deducted from the bank of the cheque
  
• Money is added to the account of the payee
  
• A receipt is sent to the printer at the ATM

Advantages and disadvantages of cheques

Advantages	Disadvantages
Secure and traceable	Slow processing time
No need for physical cash	Not widely accepted
Useful for large transactions	Risk of cheque bouncing

• Characteristics and uses of Internet banking:
  • Online access to banking services via a secure website or app
  • Allows for transfers, bill payments, account management, and more

Advantages and disadvantages of Internet banking

Advantages	Disadvantages
Convenience and 24/7 access	Security of transactions
Easy account management	Requires a reliable internet connection
Reduced need for branch visits (saving time and money)	More risk of fraud
Interest rates may be better	Easier to make errors (typing in the wrong information)
Easier to shop around for the best account	Physical cash can't be deposited/withdrawn