Business Administration Business Administration term 4 2008term 4 2008

project 2 (25%)project 2 (25%)

financial Management Systemsfinancial Management Systems Debit card and credit card paymentsDebit card and credit card payments

By Ashleigh GrayBy Ashleigh Gray

What is an EFTPOS credit What is an EFTPOS credit cardcard

EFTOPS stands for Electronic Funds Transfer EFTOPS stands for Electronic Funds Transfer at Point of Sale. This refers to the technology at Point of Sale. This refers to the technology that allows a retailer to directly debit a that allows a retailer to directly debit a customer's bank account by using a EFTPOS customer's bank account by using a EFTPOS card. The debit card, generally the same as an card. The debit card, generally the same as an ATM card, is swiped through a reading device ATM card, is swiped through a reading device just like a credit card. The customer must enter just like a credit card. The customer must enter his or her PIN number, generally requested his or her PIN number, generally requested once the amount of the sale has been entered once the amount of the sale has been entered into the EFTPOS device. into the EFTPOS device.

THE DIFFERENCE BETWEEN THE DIFFERENCE BETWEEN A DEBIT CARD & A CREDIT A DEBIT CARD & A CREDIT

CARDCARD The main difference between debit and credit is The main difference between debit and credit is

in the way that the transactions are processed. in the way that the transactions are processed. When you run your bank card as a debit card, When you run your bank card as a debit card, you will be asked to enter a personal identity you will be asked to enter a personal identity number (PIN), and the funds are removed from number (PIN), and the funds are removed from your account instantly. When you select a your account instantly. When you select a credit option, the transaction will then be credit option, the transaction will then be verified with your signature, and the funds may verified with your signature, and the funds may not be removed from your account right away, not be removed from your account right away, depending on how the store processes its depending on how the store processes its credit card transactions.credit card transactions.

BENEFITS OF A CREDIT BENEFITS OF A CREDIT CARDCARD

Its also quick and easyIts also quick and easy Having a credit card available in case of Having a credit card available in case of

an emergency situationan emergency situationFederal law states that you are only Federal law states that you are only responsible for the first $50 of responsible for the first $50 of unauthorized charges on your credit cardunauthorized charges on your credit card

Insurances that cover purchases made Insurances that cover purchases made by a credit card by a credit card

BENEFITS OF A DEBIT BENEFITS OF A DEBIT CARDCARD

Debit cards are an alternative to prepaid Debit cards are an alternative to prepaid credit cards this is to help limit and credit cards this is to help limit and control your spending.control your spending.

You are provided with a monthly You are provided with a monthly statement and therefore get a good statement and therefore get a good summary of purchases, and in most summary of purchases, and in most cases a better budgeting and credit cases a better budgeting and credit management tool to a prepaid credit management tool to a prepaid credit card. card.

HOW TO USE A CREDIT HOW TO USE A CREDIT CARD.CARD.

Today when using your credit card you have Today when using your credit card you have two options.two options.

1) Swiping you card and verify that it is you 1) Swiping you card and verify that it is you with your signature. Your signature is then with your signature. Your signature is then double checked and the transaction is double checked and the transaction is processed.processed.

2) You swipe your card and then enter you 2) You swipe your card and then enter you personal identification number and ok.personal identification number and ok.

HOW TO USE A DEBIT HOW TO USE A DEBIT CARDCARD

Debit card is different to a credit card as Debit card is different to a credit card as you have no choice of signing you must you have no choice of signing you must enter your personal identification number enter your personal identification number that your bank has provided you with. that your bank has provided you with. This can be declined if you do not have This can be declined if you do not have the funds in your bank to support your the funds in your bank to support your purchase.purchase.

CREDIT CARD FRAUDCREDIT CARD FRAUD

Credit card fraud has increased by 10% each year in Credit card fraud has increased by 10% each year in the UK. When a card is stolen most card issuers will the UK. When a card is stolen most card issuers will refund some or all of the charges that the customer has refund some or all of the charges that the customer has received for things they did not buy. These refunds will, received for things they did not buy. These refunds will, in some cases, be at the expense of the merchant. In in some cases, be at the expense of the merchant. In few countries, merchants will lose the money if no ID few countries, merchants will lose the money if no ID card was asked for, therefore merchants usually card was asked for, therefore merchants usually require ID card in these countries. Credit card require ID card in these countries. Credit card companies generally guarantee the merchant will be companies generally guarantee the merchant will be paid on legitimate transactions regardless of whether paid on legitimate transactions regardless of whether the consumer pays their credit card bill. the consumer pays their credit card bill.

Credit cards in ATMs Credit cards in ATMs

Many credit cards can also be used in an ATM Many credit cards can also be used in an ATM to withdraw money against the credit limit to withdraw money against the credit limit extended to the card, but many card issuers extended to the card, but many card issuers charge interest on cash advances before they charge interest on cash advances before they do so on purchases. The interest on cash do so on purchases. The interest on cash advances is commonly charged from the date advances is commonly charged from the date the withdrawal is made, rather than the monthly the withdrawal is made, rather than the monthly billing date. Many card issuers levy a billing date. Many card issuers levy a commission for cash withdrawals. commission for cash withdrawals.

SummerySummery

The use of debit cards has become widespread in The use of debit cards has become widespread in many countries and has overtaken the cheque, and in many countries and has overtaken the cheque, and in some instances cash transactions by volume. Like some instances cash transactions by volume. Like credit cards, debit cards are used widely for telephone credit cards, debit cards are used widely for telephone and Internet purchases.and Internet purchases.

Debit cards can also allow for instant withdrawal of Debit cards can also allow for instant withdrawal of cash, acting as the ATM card for withdrawing cash and cash, acting as the ATM card for withdrawing cash and as a cheque guarantee card. Merchants can also offer as a cheque guarantee card. Merchants can also offer "cash back“ / "cash out" facilities to customers, where a "cash back“ / "cash out" facilities to customers, where a customer can withdraw cash along with their purchasecustomer can withdraw cash along with their purchase