4.1 Electronic Monetary Processing Flashcards
List 5 reasons why retail outlets have been made widespread use of ICT.
- To assist in stock control
- To order new stock
- To calculate profit margins
- To assist managers in decision making
- To reward and track customer shopping habits
Describe an EFTPOS terminal.
Electronic Funds Transfer Point Of Sale - a checkout connected to a computer with a barcode reader and a chip and PIN terminal. It transfers money from a customer’s account using a credit/bank card to the shop’s bank account.
State 5 disadvantages of a shop not having an EFTPOS system.
- Difficulty changing price of a product
- Increased risk of human error at checkout
- Difficulty in carrying out stock control activities
- Difficulty of monitoring customer spending habits
- Increased security risks of accepting customer credit/debit cards
Describe a bar code.
A unique code registered under the European article concerning EFTPOS systems.
List 4 pieces of information held on a bar code.
- Country of origin
- Manufacturer
- Product code
- Check digit
How are barcodes created?
Digits are coded as a series of light and dark vertical bars of varying width.
What happens when a barcode is scanned?
The barcode reader uses laser beam light to read and enter the code details automatically. The barcode is then matched with a record held on the shop’s computer system. This retrieves the product description and price, and produces an itemised receipt.
State 3 advantages of EFTPOS to the CUSTOMER.
- Less chance of theft because no cash is used
- Customers using debit cards can also obtain cash at the checkout
- Ability to change money into other currencies while abroad
States 3 disadvantages of EFTPOS to the CUSTOMER.
- Customers may have to pay a fee for each transaction
- It can become too convenient for unplanned or impulse buying, leaving the customer in serious debt
- Customers are anxious about card fraud
State 3 advantages of EFTPOS to the VENDOR.
- Improved security as less cash is held in stores
- Reduced concerns with forged money
- Less paperwork for the shop to process as fewer cheques and less cash are paid into their bank
State 3 disadvantages of EFTPOS to the VENDOR.
- Shops are charged a percentage fee by the credit/debit card companies for each transaction, leading to decrease in profit
- Initial set-up costs
- If the wrong product price has been programmed into the computer, everyone buying it will be charged the wrong price
State 5 activities an ATM can carry out.
- Withdrawing cash
- Ordering a bank statement
- Obtaining account balance
- Lodging bank cheques
- Ordering a new chequebook
Describe what happens when a bank card is inserted into an ATM machine.
The ATM automatically reads the customer account number embedded in the card. The ATM then becomes interactive by asking the customer a number of questions and responds to the customer’s answers. It normally asks the customer to enter their PIN, as a form of security. They are usually given a limited number of attempts to enter this correctly. If entered correctly, the customer is offered an on-screen menu with a number of choices. When they want to withdraw cash, a further check is made to ensure they have sufficient funds in their account at that time and that they have not exceeded their daily withdrawal limit.
State 3 advantages to the CUSTOMER of an ATM.
- 24/7 access
- No need to carry large amounts of cash, hence less theft
- Impossible to withdraw cash unless they have sufficient funds
State 2 advantages to the BANK of an ATM.
- Using a PIN helps the bank to deal with fraud
* Banks need fewer employees in store, reducing amount of staff wages
