Electronic Fund Transfer System
2.13
THE HISTORY OF ELECTRONIC FUND TRANSFER
The history of electronic fund transfer and electronic banking are to a large extent ,closely interrelated with that of the automated banking systems and also the growth of the consumer financial service market now widely offered by banks.
The global advent of electronic fund transfer was first marked in the 1950s when there began a major shift in focus of commercial banks to provide services for smaller businesses and individual consumers rather mainly big businesses or organisations.This major shift marked the beginning of "retail" and "full-service" banking.It was the enhanced and growing attractiveness of consumer deposits at a period of rising loan rates and a desire to be part of the burgeoning and highly profitable small loan and retail financing business that spurred this shift.
Subsequently in the late 1950s,to accomodate this fundamental shift toward the expanding consumer banking,the industry developed magnetic inc character recognition (MICR) as a means of coping with the huge increase in the volume of checks flowing through the bank collection channels;hence commercial banks entered the third-party (bank) credit-card business.
Another later development which occured in the mid-1960s was the payment services and procedures which is now being refered to as the first-wave of electronic fund transfer.Banks had turned to computers to manage their machanised check-handling procedures and began to search-out ways to utilise their computing and electronic data processing capabilities.
Several new products and services constituted the next historical milepost; these were chains of Automated-Clearing-Houses (ACHs), an extensive system comprising shared Automated-Teller-Machine (ATM) terminals, and enhanced capability for online Point-Of-Sale (POS) transactions;sophisticated check authorisation procedured;preauthorised debit and credit systems,particularly their wide-spread use by governments to distribute
THE HISTORY OF ELECTRONIC FUND TRANSFER
The history of electronic fund transfer and electronic banking are to a large extent ,closely interrelated with that of the automated banking systems and also the growth of the consumer financial service market now widely offered by banks.
The global advent of electronic fund transfer was first marked in the 1950s when there began a major shift in focus of commercial banks to provide services for smaller businesses and individual consumers rather mainly big businesses or organisations.This major shift marked the beginning of "retail" and "full-service" banking.It was the enhanced and growing attractiveness of consumer deposits at a period of rising loan rates and a desire to be part of the burgeoning and highly profitable small loan and retail financing business that spurred this shift.
Subsequently in the late 1950s,to accomodate this fundamental shift toward the expanding consumer banking,the industry developed magnetic inc character recognition (MICR) as a means of coping with the huge increase in the volume of checks flowing through the bank collection channels;hence commercial banks entered the third-party (bank) credit-card business.
Another later development which occured in the mid-1960s was the payment services and procedures which is now being refered to as the first-wave of electronic fund transfer.Banks had turned to computers to manage their machanised check-handling procedures and began to search-out ways to utilise their computing and electronic data processing capabilities.
Several new products and services constituted the next historical milepost; these were chains of Automated-Clearing-Houses (ACHs), an extensive system comprising shared Automated-Teller-Machine (ATM) terminals, and enhanced capability for online Point-Of-Sale (POS) transactions;sophisticated check authorisation procedured;preauthorised debit and credit systems,particularly their wide-spread use by governments to distribute