Business 20.6

Solution to Expensive Banks

Solution to Expensive Banks

Providing credit cards to reduce reliance on checks and make banking operations more cost-effective.

Electronic Funds Transfer (EFT) System

Sending transaction messages between computers, facilitating quick and cost-effective fund transfers for organizations.

ETC Types

debit card

smart card

direct deposit

direct payments

Debit Cards

Functioning like checks, withdrawing funds from a checking account immediately upon transaction; recorded online instantly.

payroll debit cards

offer an efficient payment method for firms to pay workers.

Smart Cards

Cards combining many tools like credit, debit, and driver's license into one card.

Automatic Transactions

• Direct Deposit

• Direct Payment

Direct Deposit

put money into someones account

Direct Payment

paying using card or online

Advantages of Online Banks

offer higher interest rates and lower fees compared to traditional banks.

Disadvantages of Online Banks

pose security risks as they store sensitive information online, potentially compromising data safety.

debit card adv

• No interest charged.

• Can receive cash from ATMs.

• Transactions declined if insufficient funds.

• Money directly deducted from checking or savings account.

debit card dis

• No borrowing ability.

• if lost you are responsible for anything.

• Limited in usage for large purchases.

• No perks like rewards or cashback.

• Can't build credit history.

credit card

Involves borrowing money from the credit card company, has limit.

credit card adv

• Allows borrowing and repayment at a later date.

• Useful for emergencies.

• Provides extra perks like rewards and cashback.

• Offers theft protection.

credit card dis

• May incur interest if balance not paid in full.

• Potential for late fees if payments are missed.

• Impacts credit score.

• Can lead to unnecessary debt accumulation.