HIGH TECH BANKING

EPAYMENT SYSTEMS & ELECTRONIC

BANKING
Benefits of Electronic Banking:
A.Price
B.Customer Base
C.Efficiency
D.Customer Service and Satisfaction
E.Image

Payment Systems
Paper Based
High Value Clearing
Cheques
Electronic
RTGS
ECS
NEFT

CREDIT CARDS
Parties to the transaction
Card issuers - banks
Card holders card users
Member Establishments merchants having POS
terminals
Member Affiliates a large organization that wishes to
issue cards in its name say a hotel chain, an airline or
even a bank that wishes to issue cards but without
incurring the expenses to set up the entire
infrastructure
Clearing agencies mastercard, visa
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How do the issuers make money

Fees paid by MEs
Interest on card holder balances
Fees charged to card holders

Benefits of credit cards

Customers:
Deferred payment of bills
Revolving credit
Rewards from card issuers
Merchants:
Immediate payment
Assured payment
Increased customer spending

Debit cards
Pay now vs Pay later
Some customers would prefer not to raise debt
These also require a POS terminal at the ME like a
credit card
Mainly used as ATM cards
Debit cards are primarily value added ATM cards
Number of debit cards in circulation are far higher than
credit cards
Number of transactions recorded using debit cards at
POS terminals (used for purchases) are very low

Other Electronic Payment

channels/products
Automated Teller Machines (ATMs)
Internet banking
Mobile banking
Prepaid payment instruments where value is stored in
advance to be used when required Videsh yatra card,
petro card, mobile wallet

Security Issues
Identity Thefts theft of username, password, etc.
Carding/Skimming carding sites might be selling stolen
information like card numbers - skimming is unnoticed
duplication of electronic data from a payment card
Chip card harder to duplicate than a credit card with
magnetic stripe
Additional safeguards introduced: PINs in credit cards,
OTP for internet transactions
Phishing fraudulent capturing of customers security
details e.g. email phishing: creation of email messages
and web pages that exactly resemble existing sites to
deceive users to part with financial, personal and
password data
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CASH MANAGEMENT &

DEMAND FORECASTING IN ATMs
Following factors are important for forecasting demand
for cash at branches as well as ATMs
There is no stock out at the branches as well as the
ATMs
There is not too much of cash lying around as the
opportunity cost of holding cash is high

TIME SERIES ANALYSIS OF CASH

WITHDRAWALS FROM ATMs
In most banks demand is forecasted for a period of one
month at a time

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Judgmental & other factors in demand

forecasting
Safety margin how long does it take for the bank to
get cash delivered to branches and ATMs
Cash inflows that are expected to take place including
those from RBI
ATMs are categorized depending on the volume of
transactions

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Salary accounts and other factors

Past trends are considered carefully
Think of salary accounts: From the date of credit of the
salary, within 4 to 5 days 50% to 70% of the salary may
get withdrawn

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