1.7.2.G1
Electronic/Online
Banking & Bill Pay
Take Charge of Your Finances
1.7.2.G1
Electronic Banking
Electronic
Funds
Transfer (EFT)
• The electronic movement of money
that allows electronic banking to be
accomplished (not just on the world
wide web)
What can be
done?
• Withdrawals
• Bill Payment
• Deposits
Through what
methods?
•
•
•
•
Phone
Computer
Automated Teller Machine (ATM)
Point of Sale (POS) Terminal
1.7.2.G1
Electronic Banking
• Benefits of e-banking include:
–
–
–
–
–
24 hour access
Fast transactions
Paperless transactions
Convenience
Worldwide access
1.7.2.G1
Debit Cards
• Debit Cards –
– Plastic cards, which look like credit cards,
– Electronically connected to a card holder’s depository
institution account
– Money is automatically withdrawn from the designated
account
• For added protection:
– Sign the back of a debit card with
• Your signature and
• “see id”
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 4
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Personal Identification Numbers
• Debit cards require the use of PIN (Personal
Identification Numbers)
• This number is entered at
– Automated Teller Machine (ATM) or
– Point of Sale Terminal (POS)
• This confirms the individual is authorized to access
that particular account
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 5
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Card Act
Existing accounts
(before August 15,
2010) will be given
a written notice
option:
New Accounts (on
or after July 1,
2010) will be given
the choice:
Opt in to the
standard overdraft
practice
If there are insufficient
funds the transaction
will clear but the
consumer will be
charged
approximately $20-30
per transaction
Opt out of the
standard overdraft
practice
The transaction will
be declined,
however, no fee will
be charged
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 6
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Consumer Liability
Regulation E
Federal Trade
Commission
Policy:
Consumer
reports to their
institution within
two days:
Consumer pays
no more than $50
Consumer
reports to their
institution within
60 days
Consumer pays
no more than
$500
Consumer does
not report to their
institution within
60 days
Consumer liable
for all
unauthorized
transactions
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 7
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Automated Teller Machines
• Automated Teller Machines (ATMs) electronic computer terminals which
offer automated, computerized
banking
• Transactions allowed may include:
– Deposits
– Cash withdrawals
– Transfers between accounts
– Account balance information
• Some ATMs may only allow cash withdrawals
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 8
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
ATMs continued
1.7.2.G1
• ATMs can be found at various places
including:
–depository institutions
–supermarkets
–convenience stores
• ATMs are accessed with an ATM or
debit card and a PIN
• Fees may be charged for ATM use, but
will vary depending on the particular
depository institution
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 9
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Point of Sale Terminal
• Point of Sale (POS) Terminals, are located at
stores and allow the customer to use a debit card
or contactless payment device to make a purchase
• At participating POS terminals customers may
request additional cash back
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 10
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Debit Card Point of Sale Terminal
Transactions
A debit card’s magnetic strip is swiped through the
POS
After the required PIN is provided, the transaction is
authorized
If the purchase is under $25.00 a signature may not
be required
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 11
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Direct Deposit & Automatic Payment
1.7.2.G1
• Direct Deposit
– Paychecks and benefit checks are directly
deposited into a specified depository
institution account
• Automatic Payment - authorizes bills to
be paid by a specific depository
institution account
– This can be done for fixed and flexible
expenses. Examples include:
•Mortgages, vehicle payments, phone bill,
nearly anything
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 12
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Automatic Payment & Deposit
1.7.2.G1
• An authorization form is signed to allow
the transaction to occur automatically
• Consumers are responsible for
frequently checking their account to
ensure that the correct amount was
withdrawn or deposited
Direct Payment
• Sign up with billing information & a
password
• Pay bill
• Print out confirmation or record
confirmation number
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 13
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Payroll Cards
• Offer an alternative to printing and mailing a
paycheck to employees
• Function in a similar way as debit cards
• They are reloadable
• Often linked to a credit card company, allowing
employees to withdraw money from the ATM or
to purchase goods and services through a POS
• An alternative to printing and sending
paychecks
• Not linked to a depository institution account
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 14
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Check 21
• Check Clearing for the 21st
Century Act (Check 21) - Transfers
checks electronically and eliminates
all float time
–This allows a check to be processed as
quickly as using a debit card
• Float time - time between writing the
check to when the money is withdrawn
from the depository institution
account
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 15
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Pay by Phone
• Pay by Phone system allows the consumer to call a
vendor with instructions to pay certain bills or to
electronically transfer funds between accounts
– A written agreement between the consumer and the
institution may be required for a transaction to occur
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 16
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Determine Security
• The Uniform Resource Locator (URL)
ends in “s” which stands for secure
• A closed lock to the right of the URL or
in the bottom right hand corner of the
web browser to indicate a secure site
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 17
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Insecure Practices
• Email accounts are not secure
– Do not send important information such as:
• Social security numbers
• Bank account numbers
• PIN numbers
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 18
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.7.2.G1
Consumer Protection
• The Federal Reserve Bank of Chicago suggests the
following:
–Passwords are a combination of letters and numbers
–Avoid using passwords that would be easy for someone to guess such
as birth dates, phone numbers, names, sequential numbers, etc.
–Change passwords once a month
–Keep all receipts and compare them to bank statements monthly
–Log out of depository institution Web sites immediately after you finish
working
–Contact the depository institution directly with any questions or
concerns
© Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Electronic Banking – Slide 19
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona