Topic 6

ELECTRIC BANKING
TYPES OF ELECTRONIC FUNDS TRANSFER SYSTEMS

1. AUTOMATED TELLER MACHINES

 A machine that dispenses cash or performs other banking services when an account holder
inserts a bank card.
 Accepts deposits and withdrawals
 Activated by inserting cash or credit card that contains the user’s account number and pin
 Checks account balance

2. ELETRONIC FUND TRANSFER AT THE POINT OF SALE

 A payment system involving electronic funds transfers on the use of payment cards
 Uses debit card or credit cards
 Located at the point of sale
 Faster and safer

3. FAX AND TELEPHONE INSTRUCTIONS

 Account holder can give an instruction to the bank that they can use fax or telephone
communication on transactions
 Subject to certain conditions
 High risk of fraud
 High risk of delays
 Account holder bares all risk and loss by using this method
 Unless he can proof gross negligence on the part of the bank
 Bank can postpone instruction passed through fax or telephone
 Bank to a certain extent will be liable for delays in carrying out instructions through the use of
this method

4. MAGNETIC CODED DISCS

 A character- recognition n technology used mainly by the banking industry to ease the process
and clearance of cheque and other documents
 Special ink sensitive to magnetic fields used in the printing of characters on the original
document
 Number of characters used on the bottom of a cheque
 Provides a secure high speed method of scanning and processing information
5. AUTOMATED CLEARING HOUSES

 An electronic network for financial transactions

 Low value payments
 You provide the correct bank account information and it will authorize you to withdraw
money
Topic 7
Credit cards
Types of credit cards

1. Bipartite credit card

 Two party. Involves only the seller and buyer
 Issued by the bank
 Permits customer to make purchases from the merchant with the card
 To complete payment at a later date
 Customer pays his bills in monthly installments
 Includes a service charge

2. Tripartite credit card

 Three parties and three agreements
1. An agreement between the issuing bank and card holder
2. An agreement between bank and the merchant
3. Between card holder and merchant evidencing the seller or transfer of value

 A transaction Involving a sale of merchandise, the card holder first selects an item from the
merchant and then pays for it by usinf a bank credit card
 Merchant places the credit card onto a sale slip
 After the cardholder signs the sales slip
 Merchant is free to deposit the recipt with the bank
 Merchants account is credited ommeditly wth the amount, less any discount
 The issuer will bill the cardholder fpr payment of this purchase and other transactions
conducted with credit card on a monthly basis

Nature of cheque guarantee cards

 It was essentially an abbreviated portable letter of credit granted by a bank to a qualified

depositor in the form of a plastic card that was used in conjunction with a cheque
 The scheme provided retailers accepting cheque with greater security
 They are no longer being used nowadays
Liability of the banker\customer where cheque is issued by a thief

Liability of a Banker

 Where it was informed but did not take reasonable action to stop transaction its will be liable
 Should close the account
 Bank held liable for fogged or stolen checks if it issues it
 Duty of care

Liability of a customer

 Where he did knew that the cheque has been stolen but did not inform the bank, he is liable
 Contributory negligence makes the customer liable
Topic 8

Exchange control

Regulations under the Exchange control regulations

Exchange control are government imposed limitations on the purchase or sale of currencies.

These controls allows countries to better stabilize their economies by limiting inflows and outflows of
currency, which can create exchange rate vitality.

Common foreign exchange controls

1. Banning the use of foreign currency within the country

2. Banning locals from possessing foreign currency
3. Restricting currency exchange to government- approved exchangers
4. Fixed exchange rates
5. Restricting the amount of currency that may be imported or exported

Buying selling and retaining of foreign currency

A Bureau de Exchange is a business licensed under the Bank of Botswana Act to carry out business of
buying and selling foreign currency

It is illegal for anybody to trade in foreign currency without a license

Receiving money from outside Botswana

One can receive money through different ways

1. Cross-boarder transfers
2. PayPal
3. online payment Gateway
4. a Borderless account g visa card