ICT 0417 – ICT Applications: EFT, Cards, Cheques, Internet Banking
6 ICT Applications
1. Electronic Funds Transfer (EFT)
Electronic Funds Transfer (EFT) is the electronic movement of money from one bank account to another without the use of physical checks.
Characteristics
Processed through secure banking networks.
Can be initiated via ATMs, online banking, point‑of‑sale terminals, or mobile apps.
Usually completed within minutes to a few days, depending on the type (e.g., real‑time vs. batch).
Uses
Salary payments.
Bill payments (utilities, telephone, etc.).
Online shopping and services.
Inter‑bank transfers and remittances.
Advantages
Speed – funds are transferred quickly.
Convenience – can be done 24/7 from any location with internet access.
Reduced paperwork and lower risk of loss or theft of physical documents.
Accurate record‑keeping – automatic transaction logs.
Disadvantages
Dependence on electronic infrastructure; outages can halt transfers.
Potential for fraud if authentication is weak.
Fees may be charged for certain types of transfers.
2. Credit and Debit Card Transactions
Credit cards allow users to borrow money up to a limit, while debit cards withdraw funds directly from the holder’s bank account.
Characteristics
Magnetic stripe or EM \cdot chip for data storage.
Secure PIN or signature verification.
Linked to a financial institution that authorises each transaction.
Uses
Purchasing goods and services in stores and online.
Cash withdrawals from ATMs (debit cards).
Recurring payments (subscriptions, utilities).
Advantages
Convenient – no need to carry cash.
Credit cards provide a short‑term loan and can build credit history.
Fraud protection – liability limits for unauthorised transactions.
Instant transaction records for budgeting.
Disadvantages
Risk of overspending and accumulating debt (credit cards).
Potential for card skimming and data breaches.
Transaction fees may apply for certain merchants or overseas use.
3. Cheques
A cheque is a paper document that orders a bank to pay a specific amount from the drawer’s account to the payee.
Characteristics
Printed form with fields for date, payee, amount (numbers and words), signature.
Requires manual handling and processing.
Clearing can take several days.
Uses
Payments where electronic methods are not accepted.
Business transactions and payroll.
Legal or formal payments requiring a paper trail.
Advantages
Widely recognised and accepted in many jurisdictions.
Provides a physical record that can be stored.
Useful for large or irregular payments where electronic limits exist.
Disadvantages
Slow processing time.
Risk of loss, theft, or alteration.
Requires manual reconciliation.
Bank charges for cheque clearing.
4. Internet Banking
Internet banking (online banking) allows customers to conduct financial transactions via a bank’s website or mobile app.
Characteristics
Secure login using usernames, passwords, and often two‑factor authentication.
Access to account balances, statements, transfers, bill payments, and more.
Available 24/7 from any internet‑connected device.
Uses
Transfer funds between own accounts or to other accounts.
Pay bills and set up standing orders.
Apply for loans, credit cards, or other services.
Monitor transactions for fraud detection.
Advantages
Convenient and time‑saving – no need to visit a branch.
Immediate access to up‑to‑date account information.
Lower transaction fees compared with some offline methods.
Enhanced security features (encryption, OTPs).
Disadvantages
Requires reliable internet access and compatible devices.
Potential vulnerability to phishing, malware, and hacking.
Some users may find the interface confusing.
Technical issues can temporarily block access.
Comparison of the Four Methods
Feature
EFT
Credit/Debit Card
Cheque
Internet Banking
Speed of transaction
Minutes to a few days
Instant (card present) / seconds (online)
2–5 business days
Instant to a few minutes
Physical medium required
No
No (card) / optional receipt
Yes – paper cheque
No
Typical fees
Low to moderate
Possible merchant fees, interest on credit
Clearing fees
Usually free, occasional service fees
Security level
High (encryption, authentication)
High (chip, PIN, fraud protection)
Low (risk of forgery, loss)
High (encryption, 2FA) but dependent on user practices
Accessibility
Requires bank account & network
Cardholder must have card & POS/online terminal
Requires a bank account and cheque book
Internet access & device
Suggested diagram: Flowchart showing the steps of an EFT transaction from initiation to settlement.
Key Points to Remember
All four methods facilitate the movement of money without cash.
Security measures differ: electronic methods rely on encryption and authentication, while cheques depend on physical control.
Speed and convenience are greatest with electronic methods (EFT, cards, internet banking).
Understanding fees and potential risks helps users choose the most appropriate method for a given situation.