The effect of ICT on the way we bank and shop (Part 2)

Chip & Pin
Chip and Pin was first trialled in Northampton, UK, in 2003. It was used to replace the "swipe" method, this was because "swipe" cards didn't need another security check, so any person could use the card (for example; criminals). The Chip and Pin method requires the user to enter their own personal four-digit PIN code, the user of the card must know the PIN card to carry out the transaction. The user has 3 attempts to enter the PIN correctly if it is entered incorrectly, if they fail all 3 attempts, then the card is blocked and the user must visit their local bank.

The whole concept of Chip and PIN reduces the need for cash when shopping, it is also much quicker as a transaction because the till operator doesn't need to count change. Another feature is the "CashBack" option that allows account holders to take money from their account with their transaction. The other benefit is that some cards can be used abroad, this reduces the need to change currencies for cash at a bureau de change or airport, however some banks charge customers when using this feature.

A Chip and PIN card reader.

Companies that use card transactions in purchases have to pay a transaction handler to ensure the transaction occurs, this can be costly in the long run. Most companies get around this by making sure that customers can only use card if they spend over a certain amount of money, for example £3.00


The cost (from Barclaycard) to take card transactions at a business


Advantages:

• It is much safer than the old "swipe method". This is because users need to type in their PIN code, a form of identification verification.
• It reduces the need to carry cash, this means that the customer and till operator doesn't need to physically count the amount of money that needs to be given for the transaction.
• It is more efficient than paying by cash, the transfer occurs quickly and no change needs to be given (unless the customer requires cashback).
• It can be used for online transactions (unlike cash). Users enter their bank details and can easily carry out a transaction from the comfort of their home. The user's reciept is sent via e-mail.

Disadvantages:

• It can be hard for the elderly to remember their pin number, this can cause many cards to break and hard for the elderly to access their money. Criminals could take advantage of this.
• Criminals will find ways around it, by cloning cards, or simply finding out the pin of the card. There is no completely safe method.
• If there is a power failure/telephone wire disconnection, then transactions won't be able to occur. This means that companies will lose out on sales and customers.
• If a user has a credit card and a debit card, then they must remember two different pins, this could increase the number of errors, unfortunately this could lead to cards getting blocked. This can then take time to replace/fix the card.

News Articles:
http://news.bbc.co.uk/1/hi/technology/3039619.stm
http://news.bbc.co.uk/1/hi/programmes/moneybox/3717331.stm

The effect of ICT on the way we bank and shop (Part 1)

EPOS
The EPOS system allows stock management, purchases and refunds to occur over one network in a shop. This improves efficiency, it all occurs over the same system. It will use data from a stock database to work out when stock needs to be re-ordered and when stock is full. This can connect to a company site to display when certain products are available. The EPOS can also be used to price check products to ensure all of the products are labled with the correct price. The EPOS runs on a server which is accessed by several work stations in the shop; the tills, warehouse management and usually an office computer. At the tills, the EPOS calculates whether there are offers on products, how much change to give to the customer and prints off the customer's reciept of purchase. This whole system has increased turnovers in shops across the world because more customers can be served in a shorter amount of time.

An EPOS Workstation

Advantages:

• Elimates staff errors when "counting"
• If an error is made, the system can track which member of staff made the error.
• It is cheaper in the long run - It is expensive to buy, however this money is soon payed off especially due to more customers being served.
• "Reports" can be made, showing increasing/decreasing trends in certain products.
• It allows stock control and purchases to run simultaneously over the same system.

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Disadvantages:

• The tills/workstations are expensive, costing roughly £700 each.
• If the phone line becomes disrupted, cards could be rejected, losing many customers.
• If a price is wrong on the system (e.g. too low) the products will get sold at that price and end up in the company losing money
• If a powercut occurs, it can be difficult to carry out manual transactions.

Bibliography
http://www.epos.co.uk/