Financial Services & Electronic Banking

1. Financial Services & Electronic Banking Ch. 17-2 PoB 2011

2. Types of Financial Services • Savings – accepting money from customers for safekeeping • Payment – ability to transfer money to others • Examples: checking accounts, debit cards, online payments and automatic withdrawals • Lending – the borrowing of money at some time with the requirement of paying interest until borrowed amount is paid in full • Examples: auto loans, business loans, mortgages, and credit cards • Electronic Banking • Electronic Funds Transfer (EFT) – refers to the use of computers and other technology for banking services • Examples: ATM, POS, direct deposit, and automated bill pay

3. Types of Financial Services • Storage of Valuables • Safe-Deposit Boxes – are stored in secure areas that are very safe places to keep jewelry, rare coins, etc. • Bank cannot open your box, nor anyone else • Must have a key • Investment Advice • Bank assistance for making financial decisions • Management of Trusts • Trust – banks managing investments on behalf of the customers • Used by people of all ages

4. Biometric Banking • Biometry – is the analysis of biological observations, and its use un identification is not new • Fingerprint Verification • Iris Scanning • Voice Recognition • Hand Geometry • Face Recognition

5. Types of Checking Accounts • Regular Checking Accounts • If you write a lot of check each month, consider a regular checking account • Service Charge – is a fee a bank charges for handling a check account • A checking account at a credit union may be called a share draft account because the members are called shareholders • Interest-Earning • Checking accounts that earn interest; may require higher monthly balances • Interest rates vary

6. Types of Checking Accounts • Special Checking • Special Checking Account (activity account) – if you only write a few checks each month • Banks charge a small fee per check and monthly service fee

7. Comparing Checking Accounts • Evaluate the following items: • Minimum balance • Interest rate earned, if any • Monthly service charge • Fees for other services, such as printing checks and stop payment orders

8. E-Banking Services • Automatic Tell Machines • ATM (cash machine) – allows many banking services 24/7 • Debit Card (cash card) – used for ATM transactions • Payments at the Point-of-Sale • POS Transaction – a merchant accepts a debit card to pay for purchases • Direct Deposit • Direct Deposit – funds are deposited electronically and available automatically for your use • Automatic Bill Payments • Automatic Bill Payments – requires a bank customer to authorize preset amounts of monthly expenses

9. Examples of Electronic Banking Activities

10. Electronic Payment Options Debit Card Transactions Online Payments Stored-Value Cards Smart Cards - electronic wallets

11. Review What are the main types of financial services used by consumers? What are the three main types of checking accounts? What are common electronic banking services?