Q. State settlement procedure for online transaction in EFT and briefly discuss on electronic fund transfer system and also discuss about BEFTN.
Q. Settlement procedure for online transaction in EFT
For net banking: Funds are transferred to merchant’s bank account on T+2 days (Where T is the transaction date)
T+0: Customer’s bank A/C is debited and fund are credited to Techprocess account
T+1 day: Bank submits the reconciliation file and techprocess updates the status. Funds are transmitted to techprocess’ pool account.
T+2 days: Funds are transferred to merchant’s bank account
For Visa/ Master card: Funds are transferred to merchant’s bank account on T+1 day (Where T is the transaction date)
T+0: Customer’s bank A/C is debited and fund are transferred to the VISA/Master Card account with the transaction processing bank
T+1 day: Funds are transferred to merchant’s bank account
For Cash Card: Funds are transferred to merchant’s bank account on T+2 days (Where T is the transaction date)
T+0: Customer’s Cash Card A/C is debited
T+1 day: Respective cash Card Company transfers the funds to techprocess’ ‘pool account’.
T+2 days: Funds are transferred to merchant’s bank account
Q. Discuss with advantages and disadvantages about electronic fund transfer system. What do you know about BEFTN.
Electronic funds transfer (EFT): Electronic funds transfer (EFT) is the electronic exchange, transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems. The term covers a number of different concepts:
** Wire transfer via an international banking network
**Cardholder-initiated transactions, using a payment card such as a credit or debit card
**Direct deposit payment initiated by the payer
** Direct debit payments, sometimes called electronic checks, for which a business debits the consumer's bank accounts for payment for goods or services
** Electronic bill payment in online banking, which may be delivered by EFT or paper check
** Transactions involving stored value of electronic money, possibly in a private currency ** Electronic Benefit Transfer
Advantages of using the Electronic Fund Transfer:
** It is easy and convenient
** It is fast and secure.
**It is efficient and less expensive than paper cheque payments and collections.
Disadvantages of using the Electronic Fund Transfer:
** If you enter the target account number incorrectly, there is no way to reverse the transaction since the bank would process the transaction under the belief that the information you provided is accurate.
** Once an amount is transferred, the bank cannot reverse a transaction.
BEFTN: The Bangladesh Electronic Funds Transfer Network (BEFTN) will operate as a processing and delivery centre providing for the distribution and settlement of electronic credit and debit instruments among all participating banks. This Network will operate in a real ‐ time batch processing mode. Transaction Files received from the banks during the day will be processed as they are received to ensure that if there are conditions that would Result in A file or batch reject the banking company will have Sufficient Time To Fix The errors and resubmit the file. All payment transactions will be calculated into a single multilateral netting figure for each individual bank. Final settlement will take place using accounts that are maintained with Bangladesh Bank.
Q. Settlement procedure for online transaction in EFT
For net banking: Funds are transferred to merchant’s bank account on T+2 days (Where T is the transaction date)
T+0: Customer’s bank A/C is debited and fund are credited to Techprocess account
T+1 day: Bank submits the reconciliation file and techprocess updates the status. Funds are transmitted to techprocess’ pool account.
T+2 days: Funds are transferred to merchant’s bank account
For Visa/ Master card: Funds are transferred to merchant’s bank account on T+1 day (Where T is the transaction date)
T+0: Customer’s bank A/C is debited and fund are transferred to the VISA/Master Card account with the transaction processing bank
T+1 day: Funds are transferred to merchant’s bank account
For Cash Card: Funds are transferred to merchant’s bank account on T+2 days (Where T is the transaction date)
T+0: Customer’s Cash Card A/C is debited
T+1 day: Respective cash Card Company transfers the funds to techprocess’ ‘pool account’.
T+2 days: Funds are transferred to merchant’s bank account
Q. Discuss with advantages and disadvantages about electronic fund transfer system. What do you know about BEFTN.
Electronic funds transfer (EFT): Electronic funds transfer (EFT) is the electronic exchange, transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems. The term covers a number of different concepts:
** Wire transfer via an international banking network
**Cardholder-initiated transactions, using a payment card such as a credit or debit card
**Direct deposit payment initiated by the payer
** Direct debit payments, sometimes called electronic checks, for which a business debits the consumer's bank accounts for payment for goods or services
** Electronic bill payment in online banking, which may be delivered by EFT or paper check
** Transactions involving stored value of electronic money, possibly in a private currency ** Electronic Benefit Transfer
Advantages of using the Electronic Fund Transfer:
** It is easy and convenient
** It is fast and secure.
**It is efficient and less expensive than paper cheque payments and collections.
Disadvantages of using the Electronic Fund Transfer:
** If you enter the target account number incorrectly, there is no way to reverse the transaction since the bank would process the transaction under the belief that the information you provided is accurate.
** Once an amount is transferred, the bank cannot reverse a transaction.
BEFTN: The Bangladesh Electronic Funds Transfer Network (BEFTN) will operate as a processing and delivery centre providing for the distribution and settlement of electronic credit and debit instruments among all participating banks. This Network will operate in a real ‐ time batch processing mode. Transaction Files received from the banks during the day will be processed as they are received to ensure that if there are conditions that would Result in A file or batch reject the banking company will have Sufficient Time To Fix The errors and resubmit the file. All payment transactions will be calculated into a single multilateral netting figure for each individual bank. Final settlement will take place using accounts that are maintained with Bangladesh Bank.
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