Assignment: Name Noor Nihal Ahmad Class 3 Roll No 142

ASSIGNMENT
 NAME NOOR NIHAL AHMAD
 CLASS 3RD SEMSTER (S.S)
 ROLL NO 142
 SUBJECT MONEY,BANKING AND CREDIT

MANGEMENT
 TOPICS
 ATM
 DIFFERENCE BETWEEN DEBIT
CARD AND CREDIT CARD
Automated Teller Machines
Automated Teller Machines (ATMs) conduct many transactions that would otherwise
require staff attention: they furnish account information, accept deposits, draw down on
pre-approved loans, and transfer funds. The use of ATMs frees loan officers to focus on
personalized services, and the machines can potentially deliver a broader range of
services. ATMs are most effective for microfinance institutions (MFIs) that accept
savings and want to serve customers in multiple locations and/or during non-business
hours. But since a single machine can cost as much as US$ 35,000 and requires
reliable electric and communications connections, ATM technology may not be the first
choice for all MFIs.
How Do ATMs Work?

Typical ATMs have two input devices (a card reader and keypad) and four output
devices (display screen, cash dispenser, receipt printer, and speaker).Not visible to the
client is a communications mechanism that links the ATM directly to an ATM host
network. The ATM functions much like a PC; it comes with an operating system (usually
OS/2) and specific application software for the user interface and communications.
Whereas most ATMs use magnetic strip cards and personal identification numbers
(PINs) to identify account holders, other systems may use smart cards with fingerprint
validation. The ATM forwards information read from the client’s card and the client’s
request to a host processor, which routes the request to the client’s financial institution.
If the cardholder is requesting cash, the host processor signals for an electronic funds
transfer (EFT) from the customer’s bank account to the host processor’s account. Once
the funds have been transferred, the ATM receives an approval code authorizing it to
dispense the cash. This communication, verification, and authorization can be delivered
several ways. Leased line, dial-up, or wireless data links may be used to connect to the
host system, depending on the cost and reliability of infrastructure. The host systems
can reside at the client’s institution
Who Should Consider ATMs?

MFIs generally consider ATMs when high transaction volumes put pressure on staff,
traditional operating hours do not suit client needs, and regulations permit MFIs to offer
a range of financial services. The technology only becomes attractive if an institution
accepts savings, since the up-front investment in an ATM network is too high to justify
using it only for loan disbursements. Some MFIs may want to consider ATMs or other
simple card-reading and balance-reporting networks to reach rural customers or a
dispersed population. For these institutions, locating an ATM in a market center may be
more cost effective than opening a branch there.
Requirements for ATMs

 Reliable electrical power and communications infrastructure
 Affordable dial-up or leased line rates for the ATM to send and receive data.
 A central database where client data must be stored for balance verification.
 Reliable after-sales servicing and support from the vendor or third-party.
 Solid operational procedures and resources to distribute cards and control PINs.
 Supply of correctly denominated currency • Systems to securely transfer cash to

ATMs
 Adaptations for effective usage, such as building- in verbal instructions to guide

illiterate users.
Benefits and Costs of ATMs

Benefits
 Flexible account access allows clients to access their accounts at their

convenience.
 MFI personnel are not required to be present for transactions and have more
time to serve clients.
 Increased hours of operation fit client schedules.
 More clients can be reached beyond the branch network, such as in smaller
population centers.
 More low-cost funds are available because ATMs make it easier for clients to
deposit savings.
Costs
Costs differ depending on the technology provider and how the ATM network is
operated. If an MFI can partner with an existing ATM network and/or network
operating company, the MFI’s operating expenses will be less.
 Up-front equipment acquisition cost or network participation fee.
 Set-up fee to install and network the ATMs.
 Usage fee, either per transaction or on a monthly basis.
 Monthly or annual service fee for support.
 Communications charges for dial-up, leased lines, or wireless data links.

DIFFERENCE BETWEEN DEBIT CARD AND
CREDIT CARD
Improve this chart Credit Card Debit Card
Where money Borrowing money from a Funds taken from the money
comes from: bank or financial institution. that you have in your bank
(Spending "other's" money) account. (Spending your
"own" money)
Can be used Credit card only Debit or credit card i.e., a

as: debit card may be used
without a PIN for certain
types of transactions such as
e-commerce.
Line of Credit: Carries Line of Credit No Line of Credit
PIN Number: Usually not. However, some PIN number provided, but not
credit cards may provide always asked to punch in.
PINs to allow consumers to
withdraw money from ATMs
just like debit cards. Such
withdrawals are generally a
bad idea because they carry
high fees and interest rates.
Picture ID Yes No
required
before
issuance:
Interest: If a credit card bill is not paid No interest is charged

in full, interest is charged on because no money is
outstanding balance and the borrowed. Consumer's own
interest rate is very high. funds are used to make
purchases.
Credit History: Responsible credit card Does not affect credit history.
usage and payment can
improve one's credit rating.
Credit cards typically report
account activity to at least
one of the three major credit
bureaus on a monthly basis.
Legal Liability Strict. Consumer liability limit Lean. Consumer liability limit
laws: for credit card fraud is $50 if for debit card fraud is $50 if
the credit card company is the bank is notified within two
notified within 60 days in days of noticing the
written since the fraudulent fraudulent charges.
charges.
Risk involved: Low. Consumers are High, as they are attached to

protected against a bank account. A person
unauthorized purchases as does not need a PIN number
long as the fraud is reported to use a debit card and
in a timely manner. therefore can easily drain a
Consumers are not persons bank account,
responsible for charges causing extreme problems.
incurred in fraudulent
transactions.
Fraud: Only problem is proving that With a debit card the person
someone else has used the has to figure out how to get
card. their money back and if any
checks bounced they are
responsible for those as well.
Limit: Credit line, which can be Equals your account limit.

increased/decreased from
the time of applying.
Overdraw Low. Some credit card High "overdraft" fees.

Fees: companies allow to overdraw Possible to overdraw amount
amount over the maximum over the account limit
credit line with a fee.
Connected to: Need not be connected to Checking or Savings Account

any bank account.
Monthly bills: Yes No
Offers Often. For example,xtended Sometimes. For example,

protection and warranties on new products, extended warranties on new
other benefits: or insurance on a rental car. products, or insurance on a
rental car.

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ASSIGNMENT

 NAME NOOR NIHAL AHMAD

 CLASS 3RD SEMSTER (S.S)

 SUBJECT MONEY,BANKING AND CREDIT

How Do ATMs Work?

Who Should Consider ATMs?

Requirements for ATMs

 Reliable after-sales servicing and support from the vendor or third-party.

 Supply of correctly denominated currency • Systems to securely transfer cash to

 Adaptations for effective usage, such as building- in verbal instructions to guide

Benefits and Costs of ATMs

 Flexible account access allows clients to access their accounts at their

 Increased hours of operation fit client schedules.

 Set-up fee to install and network the ATMs.

 Usage fee, either per transaction or on a monthly basis.

 Monthly or annual service fee for support.

 Communications charges for dial-up, leased lines, or wireless data links.

Improve this chart Credit Card Debit Card

Can be used Credit card only Debit or credit card i.e., a

Line of Credit: Carries Line of Credit No Line of Credit

Interest: If a credit card bill is not paid No interest is charged

Risk involved: Low. Consumers are High, as they are attached to

Limit: Credit line, which can be Equals your account limit.

Overdraw Low. Some credit card High "overdraft" fees.

Connected to: Need not be connected to Checking or Savings Account

Monthly bills: Yes No

Offers Often. For example,xtended Sometimes. For example,

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