Electronic Funds Transfer Systems Research Articles

Liability implications in electronic fund transfers

The purpose of this paper is to present an overview of Electronic Funds Transfer Systems, the Electronic Fund Transfer Act (EFTA) of 1978 and liability implications for financial inititutions and customers. Models of payment transfer prior to EFT are presented followed by a review of the EFT Legislation. Various aspects of regulatory authority, disclosures, preauthorized transfers and error resolution procedures are examined. The paper ends with a discussion of three types of liability: consumer, financial institution, and civel and criminal. An extensive list of references is provided.

Some cryptographic principles of authentication in electronic funds transfer systems

One essential requirement of an Electronic Funds Transfer (EFT) system is that institutions must be able to join together in a common EFT network such that a member of one institution can initiate transactions at entry points in the domain of another institution. The use of such a network is defined as interchange . Cryptographic implementations are developed for such a network in such a way as to keep personal verification and message authentication processes at different institutions completely separate. This is accomplished through the combined use of user-remembered personal identification numbers (PINs), secret system keys, and intelligent secure (bank) cards on which are recorded secret personal cryptographic keys.

Value conflicts and social choice in electronic funds transfer system developments

During the last few years, computer-based systems which automate the transfer and recording of debits and credits have begun to be implemented on a large scale. These systems promise both financial benefits for the institutions that use them and potential conveniences to their customers. However, they also raise significant social, legal, and technical questions that must be resolved if full scale systems for Electronic Funds Transfer (EFT) are not to cause more problems for the larger public than they solve. This paper examines the incentives for EFT developments and the social problems they raise in the context of conflicts between five different value positions that are often implicit in analyses of proposed EFT arrangements. These conflicts reflect the relative importance of certain problems for specific groups. The value positions implicit in EFT proposals help to organize analyses of market arrangements, system reliability, and privacy of transactions. These topics are analyzed in this article and related to the value positions held by concerned parties. Last, the ways in which the public can learn about the social qualities of different EFT arrangements and the pace of EFT developments are both discussed in the context of social choice.

Electronic Funds Transfer: What are the security implications?

Electronic Funds Transfer systems will, in spite of delays, be introduced in this country before very long. When the banks and the retailers can resolve their differences over the form the system should take, the growth potential should be substantial. But there will be security problems for the retailer. It is these problems which Frank Pegg discusses in this special feature.

The Consumer and the Electronic Funds Transfer Systems

The Consumer and the Electronic Funds Transfer Systems

Transaction Network, Telephones, and Terminals: The Switched Network Transaction Telephone System

In June of 1972, an AT&T/BTL project team was formed to determine the evolving communication needs of the financial and retail industries as they moved to implement electronic funds transfer systems. The Bell System response occurred in three phases. The first phase introduced the Transaction I telephone, 407B data sets, and the Transaction Telephone Test Line Station in order to provide a simple means of evolving from the widespread manual-entry/audio-response systems into automatic-entry/audio-response systems. The second phase expanded our system offering to include Transaction II telephone, 407C data sets, and an upgraded Transaction Telephone Test Line Station. The third phase introduced the Transaction printer, which provided a simple means of generating receipts at the terminal location under control of the data center computer. This paper describes the resulting Switched Network Transaction Telephone System and the individual products of which it is built.

Data management in Electronic Funds Transfer Systems

Although Electronic Funds Transfer Systems (EFTS) encompass a large group of financial transaction systems including funds transfers between major banks and transfers among the Federal Reserve Banks over their private network (FEDWIRE), the scope of this paper will be limited to the major application of EFT systems which utilize mini and microcomputers: networks of automatic banking transaction terminals.

Value conflicts and social choice in electronic funds transfer system developments

During the last few years, computer-based systems which automate the transfer and recording of debits and credits have begun to be implemented on a large scale. These systems promise both financial benefits for the institutions that use them and potential conveniences to their customers. However, they also raise significant social, legal, and technical questions that must be resolved if full scale systems for Electronic Funds Transfer (EFT) are not to cause more problems for the larger public than they solve. This paper examines the incentives for EFT developments and the social problems they raise in the context of conflicts between five different value positions that are often implicit in analyses of proposed EFT arrangements. These conflicts reflect the relative importance of certain problems for specific groups. The value positions implicit in EFT proposals help to organize analyses of market arrangements, system reliability, and privacy of transactions. These topics are analyzed in this article and related to the value positions held by concerned parties. Last, the ways in which the public can learn about the social qualities of different EFT arrangements and the pace of EFT developments are both discussed in the context of social choice.

Economies of scale in electronic funds transfer systems

Virtually all of the technology that is necessary for a nationwide electronic funds transfer system (EFTS) has already been developed. An EFTS will probably consist of cash dispensers (CD's), automated tellers (AT's), point of sale (POS) switches and terminals, automated clearinghouses (ACH's), regional processing centers, and nationwide communication lines. 1 Retail banking machines (CD's, AT's, and POS terminals) are already linked to ACH's by telephone lines in several cities. The ACH's process batch transactions within a region. Separate POS switches may process 'on-line' transactions among consumers, financial institutions, and retailers within one market. Interregional transfers can be effected through regional switching and processing centers, which may be similar to the Federal Reserve System's regional check processing centers. The regional centers will be large data processing facilities connected by telecommunication networks. Nationwide transfers can be completed through telecommunication lines linking regional centers; the nationwide transfer process may operate like the Bank and Fed Wire services already do. Eventually it should become less expensive to transfer funds and settle most accounts electronically than by nonelectronic methods for two reasons. First, the costs of nonelectronic transactions are increasing rapidly. Among these costs are employee wages and salaries, postage, paper, and other expenses associated with processing paper checks. A 1974 Atlanta Payments Project Study (1974) suggested that a mature ACH System would process an electronic payroll deposit

Impact of electronic funds transfer systems on networks

Networks for electronic funds transfer systems have very high volumes of transactions to be processed. This means that changes must be made in EFT message-switching computer hardware. High volumes also mean that a transaction-oriented executive must be used. Terminal requirements will vary, depending on whether the transactions are paper-based or paperless transfers of funds. Integrating financial transactions with retail transactions with an electronic point-of-sale subsystem is a real systems challenge. Such a system must provide total control for the financial institution and improved point-of-sale productivity for the supermarket.

Towards an agenda for EFT research

During the past decade the foundation has been laid for a major change in the payment and fund transfer system in American society. As technological advances are achieved, their application could eventually mean that the payments system will be based on digital impulses rather than on cash or paper checks. Preauthorization techniques, automated banking, and point of sale devices are already part of rapidly expanding new technology---electronic fund transfer (EFT) systems.

I The state of the technology

Electronic funds-transfer (EFT) systems apply electronics technology to common financial transactions, those typically handled by cash or checks. In the process, these systems may also transfer associated information. The principal EFT systems in operation today are: online teller terminals, automated teller machines, point-of-sale devices or terminals, automated clearing-houses, and facilities for paying bills by telephone. All of the technology for these services is here now. Most of the technology necessary to develop additional EFT services is also here now. What the future may bring is improvements in the types of equipment involved, leading to EFT systems providing a wider range of consumer services, and the development of large-scale switching and processing centers to communicate transaction messages from many merchant locations to many different financial institutions.

Diffusion of EFTS among National Banks: Note

The purpose of this paper is to examine and seek to explain the use of electronic funds transfer system (EFTS) devices by a relatively small proportion of national banks. A focus upon the leaders in the use of these innovations is helpful in establishing the parameters that may affect more widespread use among banks. Data for the study are from a detailed survey of national banks carried out by the Comptroller of the Currency.

Public policy issues and the application of computer technology

Continuous developments in the areas of computer componentry, data-base technology, and computer networking have significantly increased the ability to store and manipulate vast quantities of information. The challenge to the public sector is to keep pace with these technology developments in protecting individual liberties and societal interests. The long-standing concern with databanks and privacy is just one area on which to focus attention. Electronic Funds Transfer Systems, approaching readiness by commercial interests, could have a most fundamental effect on the way we transact business. Information utilities could dramatically affect our access to goods and services. The purpose of this paper is to heighten awareness of ways in which applications of computer technology will affect our lives, and to highlight the areas that need public debate and government policy-making.

EFTS For Automatic Payment of Water Bills

An automatic billing and payment system utilizing an Electronic Funds Transfer system has lightened the workload and improved the cash flow of this utility.

Development of Electronic Funds Transfer Systems

Development of Electronic Funds Transfer Systems