Banking applications Cambridge IGCSE Information & Communication Technology revision
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In plain words
Most people now go for months without walking into a bank. Cash comes from a machine, bills are paid by phone, and money moves between accounts as data.
5 things to know
- An automatic teller machine (ATM) lets customers withdraw cash, deposit cash or cheques, check their balance, print a mini statement, pay bills and transfer money. It is available at all hours, but it may charge a fee, has a limit on withdrawals, and can be tampered with by criminals.
- Electronic funds transfer (EFT) moves money from one account to another electronically, with no cash or paper. It is fast and secure, and is how wages are paid.
- Credit and debit card payments: a debit card takes the money from the customer's account. A credit card borrows it from the card company, to be repaid later.
- Cheques are written orders to pay. They are slow to clear, can be lost or forged, and are used less and less.
- Internet banking lets customers check balances, pay bills and transfer money from anywhere at any time. It saves the bank the cost of branches. Its risks are fraud, such as phishing, and it needs a reliable internet connection and some skill.
Worked example
A customer withdraws cash at an ATM. Describe the steps the system takes.
- The card is inserted and its details are read. The customer types a PIN, which is checked against the PIN stored for the card.
- The customer chooses an amount. The bank's computer checks that the account holds enough and that the daily limit is not exceeded.
- The cash is given out, the amount is taken from the account, and a receipt may be printed.
Tips and tricks
- For internet banking, give advantages to the customer (any time, anywhere, no travelling) and to the bank (fewer branches and staff) separately.
- Debit card: your own money, now. Credit card: borrowed money, repaid later.
It lands in your notebook with its questions as flashcards.
Banking applications: 5 questions and answers
These are the quiz’s questions. Do the quiz first, then come back here for the ones that got you.
What does EFT stand for?
Money moves between accounts as data.
Which is checked first when a customer uses an ATM?
It proves the card belongs to the user.
Which is an advantage of internet banking for the bank?
Customers serve themselves online.
What is the difference between a debit card and a credit card?
A credit card payment is borrowed and repaid later.
Which is a disadvantage of paying by cheque?
The money does not move straight away.
Quiz
5 questions
Tap an answer and you’ll see straight away whether it’s right, and why.
Worksheet
2 questions, 5 marks. Write your answers on paper, then check them.
Banking applications
Cambridge IGCSE Information & Communication Technology 0417 · 5 marks · papermunch.org
Name ______________________________ Date ______________
State three services, other than withdrawing cash, that an ATM provides.[3]
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Checking the account balance. Printing a mini statement. Depositing cash or cheques. (Also: paying bills, transferring money.)
Give one advantage and one disadvantage to a customer of using internet banking.[2]
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Advantage: the account can be accessed at any time without visiting a branch. Disadvantage: there is a risk of fraud, such as being tricked by a fake website.
Answers: Banking applications
- 1. Checking the account balance. Printing a mini statement. Depositing cash or cheques. (Also: paying bills, transferring money.)
- 2. Advantage: the account can be accessed at any time without visiting a branch. Disadvantage: there is a risk of fraud, such as being tricked by a fake website.