• EFTS - Electronic funds transfer system
• EFTPOS - Electronic funds transfers at the point of sale

EFT is an alternate way of paying for goods and services and making a range of financial transactions. It is a process whereby messages about financial transactions are sent from one computer to another.

EFTS provides the basis for less cash and cheques. Australia appears to be one of the leaders in the use of EFTS.

Use of cheques has been growing, trebling during 1965-77 and doubling over 1974-84. There are about 35 million bank accounts in Australia and about 1000 million cheques are drawn each year.

Cost of handling a credit card transaction or a cheque is between 50 cents to \$1.00. For EFTS, 10 - 30 cents.

Also, float of funds required to cover each day's cheque transactions is about \$1500 million a year. EFTS could reduce the float and therefore release funds for banks.

• Reducing cost of handling cash, credit cards and cheques.
• Better information to improve services
• Reduces the risk of robberies and thus increases staff safety

• Changes have overtaken consumer understanding
• The laws relating to payment systems
• Inadequate considerations of actual and possible considerations
• Impact on employment
• Impact on privacy given the extent of data and possibilities of surveillance.
• Security of EFTS
• Equity
• Rights and responsibilities unclear

It is expected that the present day cards will in future be replaced by smart cards that replace the magnetic strip with a microprocessor. The card can then store a variety of information including a person's bank balance.

Each transaction can then use this information to check the cards validity and spending limits and the transaction can debit the amount on the card.

Smart cards could be used off-line for small amounts and on-line for larger amounts.

• EFT makes it easier to collect, organise, store and access information.
• EFT data is collected electronically and requires less time to record and retrieve.
• EFT makes it easier to match some types of data.
• The number of points where data is retained may be larger.
• Given the extent of data, individual data can be organised and analysed from many perspectives.

Copyright © 1998 Curtis Dyreson. All rights reserved.