(Banks, including ATM (automatic teller machines), EFT (electronic funds transfer), hotels, supermarkets, travel agencies.)


Banks provides a safe place for their customers’ money and to lend money to business and customers. Today all types of banks make use of IT in various ways, to makes their business more successful. Banks has all the detail information of their customers stored in their computer, this allows banks to easily find their customers account information and make changes to their account balance quickly and easily. They offer their customers services such as Credit Cards, Personal Loans, Mutual Funds, Safe Deposit Boxes, Signature Guarantees and many other services. Nowadays Online banking allows customers to make financial transactions on a secure website that is run by their virtual bank. One of the unique features of online banking is that it allows customers to monitor all of their accounts in one place. Other common feature is Personal financial management support, such as importing data into personal accounting software. Banks make use of various IT systems which have facilitated and revolutionized the processes carried out in banking. Some of this systems and channels to access their banking and other services are:

· EFTPOS (Electronic Funds Transfer at Point Of Sale)
· EDI (Electronic Data Interchange)
· MICR (Magnetic Ink Character Recognition)
· EFT (Electronic Funds Transfer)
· Online banking
· Mobile/telephone/video banking

Common feature of online banking are;

Transactional; such as an account to account transfer, paying a bill etc.)
Payments to third parties.
Investment purchase or sale
Loan applications and transactions,

Non-transactional (e.g., online statements, cheque links, cobrowsing, chat)
Viewing recent transactions
Downloading bank statements
Viewing images of paid cheques

Financial Institution Administration

Management of multiple users having varying levels of authority

Transaction approval process


Banks also operates a network of ATMs. They use mainframe computers to maintain their customer accounts by dealing with transactions generated as a result of withdrawals and deposits.
ATMs are used to:

· Withdraw money from your account
· Find your account balance
· Change your pin
· Make deposits
· Order a cheque book etc..

The advantages of ATMs:

Banks can keep their operating costs down because fewer employees are needed to work behind the counter.
Customers have 24-hour access to their accounts.
There’s no need to carry large amounts of cash around as the large number of ATMs means that it is readily available.

MICR (Magnetic Ink Character Recognition)

Reads Magnetic Ink characters which are found on cheques. On a cheque, the account number branch code and cheque number are all printed in magnetic ink. The amount of money on the cheque is also added onto the magnetic ink when the cheque is cashed. Using a MICR, this data on the cheque can be read quickly, and can then be processed. The use of MICR speeds up the process of identifying cheques, decreases the chance of error in comparison with manual input of data, and helps to prevent fraud as the magnetic ink is difficult to forge and change.

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EFTPOS (Electronic Funds Transfer at Point Of Sale)/ EDI (Electronic Data Interchange) / EFT (Electronic Funds Transfer)

Electronic fun ds transfer is the electronic exchange or transfer of money from one account to another, through computer -based systems. EFT may also refers to any transfer of funds initiated through an electronic terminal, including credit card, ATM, Fedwire and point-of-sale transactions. It is used for both credit transfers, such as payroll payments, and for debit transfers, such as mortgage payments.



A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale.
Transaction steps
The cardholder pays for the purchase and the merchant submits the transaction to the acquirer (acquiring bank). Authorized transactions are stored in "batches", which are sent to the acquirer.
Clearing and Settlement: The acquirer sends the batch transactions through the credit card association, which debits the issuers for payment and credits the acquirer.
Funding: Once the acquirer has been paid, the acquirer pays the merchant.


A smart card has an embedded microchip that can be loaded with data, is used in electronic cash payments, and other applications. Smart cards can be designed to be inserted into a slot and read by a special reader or to be read at a distance, such as at a toll booth.

The most common smart card applications are:

· Credit cards
· Electronic cash
· Computer security systems
· Wireless communication
· Loyalty systems (like frequent flyer points)
· Banking
· Government identification


All cheques are as a rule go through clearing house for cheques. The money is not releaseD until the cheque is verified by the bank in all respect. Then first exchanged by banks after withdrawing from cheque issuer's account, the receiving bank pays the depositor in its account. This process is call cheque clearing process.

BACS (Banker's Automated Clearing Services)

BACS is Scheme for the electronic processing of financial transactions. BACS payments take three working days to clear: they are entered into the system on the first day, processed on the second day, and cleared on the third day.

ATM (Automated Teller Machine)

ATMs are used to withdraw money from your account, find your account balance, change your pin, make deposits..etc.

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Video about protection against ATM and EFTPOS skimming:


Hotels, much like travel agencies have introduced online booking to their websites, in an attempt to make it easier for customers to book hotel reservations. Hotel reservation systems use online processing when dealing with information being input and output. Online processing shares it similarities with real-time processing as the databases which contain information on what rooms have been booked and what rooms are available, have to be updated instantly, so as to prevent two different people from booking the same room. A feature that distinguishes online processing from real time is that, in online processing there exists a cooperation between processes in the way that, for example, the process which attempts to book room 1450 must wait for the process that checks if room 1450 is available.

Another system used by hotels to help management is the use of databases to store customer details such as: name, address, credit card nº, money spent at hotel, duration of stay. The information on the database is usually processed instantly (real time), for example when adding the price of the room services to the total the customer needs to pay when he checks out.

Example of a Customer Check In window used in a hotel database:



Supermarkets have implemented several IT systems into how they deal with things such as storing and organising their products and the methods of payment. Some of the systems include the use of databases to store data on the products and their availability. Bar code readers are another device that has been made due to the development in supermarket systems, this device allows for cashiers to scan the item and therefore automatically updating the database, without any manual work having to be done. There have also been developments in the method of payment, the system used in a supermarket when you purchase an item is called Electronic Fund Transfer at Point-of-Sale (EFTPOS)


1- The customer gives the cashier the bank card
2- The cashier runs card through scan reader and enters value of purchase
3- The store's system connects to the bank's and sends a message
4- The bank uses the account number to access the information and check the balance
5- The bank then sends either a confirmation or rejection message to the store
6- The cashier confirms the purchase and sends an EFT message to the bank
7- The bank then subtracts the purchase value from the person's account and adds it to the store's account
8- The cashier returns the card along with a reciept.


EFTPOS - Basic demonstration from Cashier's point of view


Travel agencies have been almost completely replaced by online reservation systems nowadays
which give customers the capability of booking their flight tickets online through the internet. This
facilitates the reservation procedure as the customer does not need to go to a travel agency in order
to reserve his ticket; this saves fuel, energy, prevents possible car accidents and saves the customer
some money. Reservation systems also allow customers to buy packages when traveling, a
common example of this is renting cars at the airport or also buying an hotel room along with the flight.

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This is good for the customer as it makes the reservation process much easier, although it is impossible for them to reserve without a computer and an internet connection. For the travel agencies on the other hand they will not receive many customers but it could also mean that companies no longer need travel agencies and this could save them money.

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These reservation systems are also used with hotels, restaurants and many other businesses.



Airline reservation systems are used to track and maintain records of flight schedules, passenger reservations and seat assignments, aircraft loading, flight inventory, ticket purchases and fare tariffs.


Travel agents in the 1970s pushed for access to the airlines' systems.
Today, air travel information is linked, stored, and retrieved by a network of computer reservations systems accessible by airlines and travel agents. The global distribution system makes for an even larger web of airline information, not only merging the buying and selling of tickets for airlines, but also making the systems accessible to consumers directly.
Portals on the Web allow consumers to purchase tickets directly, select seats, and even book hotels and rental cars.


Of the major types of airline reservation systems, most provide information directly to travel agents, employees of other airlines and passengers or potential customers. The major systems include:
  • Worldspan
  • Galileo
  • Patheo
  • Abacus


A news article on the latest trends in Reservation system:

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