Automated Teller Machines (ATMs)

Banks use mainframe computers to maintain their customer accounts by dealing with transactions generated as a result of withdrawals and deposits.

It also operates a network of automated teller machines or ATMs.

Typically an ATM can be used to:

• withdraw cash;
• check an account balance;
• order a statement or print a ‘mini statement’;
• order a cheque book

The advantages of ATMs:

• Banks can keep their operating costs down because fewer employees are needed to work behind the counter inside branches;
• Customers have 24-hour access to their accounts seven days a week;
• There’s no need to carry large amounts of cash around as the large number of ATMs means that it is readily available.

Clearing cheques

Once a cheque has been written and paid into the bank a process called clearing begins.

This describes the steps that take place in order for the correct amount of money to be transferred from one account to another.

Cheques are processed using MICR

Electronic Funds Transfer (EFT)

SWITCH and DELTA are the two main types of debit card in the UK.

They can be used to pay for goods and services instead of cash or cheques.

This type of payment system is called EFT. Main advantages of EFT are that bank accounts are updated straight away and there is no need to use cash or wait for cheques to clear.

Smart cards

They look exactly like a credit or debit card except that it has a microchip built into it.

Can be used to store data reliably and securely.

Money is stored on the card in an electronic purse .

The main advantages :

• They can be used just like cash without the need to wait for authorisation like EFT systems;
• Smart card technology is more reliable than magnetic stripes which are easily damaged;
• Smart cards offer better security than magnetic stripe cards because they are much more difficult to forge and generate a unique digital code each time they are used