onto anATM.

Theytake a blank card and byinserting the card theyare able to encode all the information
when they swipe from anATM. skimmer catches the PIN.
Spoofing: The invader creates a misleading context which false you in making an unsuitable security-
appropriate decision. For example false ATM machines have been set up. If they will be having PIN
number theywill be having enough information to steal from the account.
Online Banking Security features: Security features available in the online banking are:
 Security token device for online banking
 Use of a secure website has become almost universally adopted
 Single password authentication
 PIN/ TAN (Transaction authentication number)
 system where the PIN represents a password, used for the login
 OTP (One time password) to user’s (GSM) mobile phone via SMS.
 Signature based online banking where all transactions are signed and encrypted digitally
Online Banking Security countermeasures: Security countermeasures implemented by almost all
the Banks include the following:
 Digital certificates are used against phishing and pharming
 Use of class-3 card readers is a measure to avoid manipulation of transactions by the software in
signature based online banking variants
 Users should use virus scanners and be careful with downloaded software or e-mail attachments
to protect Trojan attacks

2.4 Mobile Banking

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Mobile Banking: Mobile banking is a system that allows customers of a financial institution to conduct
a number of financial transactions through a mobile device such as a mobile phone or personal digital
assistant.
Mobile banking differs from mobile payments, which involve the use of a mobile device to pay for
goods or services either at the point of sale or remotely, analogously to the use of a debit or credit card
to effect an EFTPOS payment.
The earliest mobile banking services were offered over SMS, a service known as SMS banking. With
the introduction of smart phones with WAPsupport enabling the use of the mobile web in 1999, the first
European banks started to offer mobile banking on this platform to their customers.
Mobile banking has until recently (2010) most often been performed via SMS or the mobile web.
Apple’s initial success with iPhone and the rapid growth of phones based on Google’sAndroid (operating
system) have led to increasing use of special client programs, called apps, downloaded to the mobile
device. With that said advancements in web technologies such as HTML5, CSS3 and JavaScript have
seen more banks launching mobile web based services to complement native applications.
Importance of Mobile banking for the Banks: Mobile Banking is an important facility provided to
its customers because of the following reasons:
 Proactive and simple alerting services reduces branch/ call centre costs
 M-commerce is expected to account for an increasingly high proportion of transactions.
 Mobile device can be an ideal POS device allowing transactions to be authorized in many more
places than ever before
 Mobile services are expected to generate access to new business opportunities &new alliances
across business sectors
 High market penetration (up to 80% in some countries) and still growing
Advantages of Mobile Banking:
 Customers: Many of the benefits of doing your banking online are obvious:
l You don’t have to wait in line.
l You don’t have to plan your day around the bank’s hours.
l You can look at your balance whenever you want, not just when you get a statement.
 Banks:
l Control costs, removal of cost duplication
l Cater to increasing online channel customers
l Personalize customer interactions
l Unparalleled convenience and proactive customer service
l Cross selling

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 Mobile Banking services:
 Fast data services (GPRS)
 Low data transfer costs (e.g. flat rates)
 More functionality possible (new devices with better displays and browser functionality)
 Higher Securitymechanisms
 Applications capitalize on the mobile aspects and diversify from existing web-based solutions
Mobile Banking security issues:
 Devices are easy to lose/ steal and get misused
 Mobile communication being sent as clear text can be read or interrupted
 Location-aware applications are considered to be invasion of privacy
 Lack of standardizations in payment solutions
Mobile bankingApplications:

SMS Payments:
SMS payments are a means of paying for goods, services or products via a text message sent from a
mobile phone. They work like standard SMS or Short Messaging Service. With the SMS payment
system purchasers send a text message to pay for an item or service. This text message is sent to mobile
payment providers. The provider clears the transaction between the purchaser and the vendor. The
cost of the purchase is added to the monthly phone bill or deducted from a pre-paid balance by the
mobile phone operator. By using SMS payments, mobile phone users can securely, quickly and safely
pay merchants, buy goods or services, real or virtual, as well as make deposits or send remittances.

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Many businesses are looking at harnessing the power of SMS payments to make life easier for their
customers.
Advantages of SMS Payment Systems
For the Customer
l It is quick and easy to use.
l The purchaser doesn’t have to enter in their credit card or bank details, or even have a bank
account.
l They don’t need to remember any passwords or user names as with payment sites like PayPal.
l It is more secure as no personal details or account details are released.
For the Business, Charity or Service Provider
l They have instant access to billions of mobile phones equipped with SMS facilities worldwide.
l They have access to millions of customers who don’t have a bank account or credit card and thus
were prevented from buying their goods or services before. They now have access to a whole
new set of customers.
l They can build upon customer loyalty via SMS marketing message, discounts and coupons.
l They don’t need to verify customers’ identities or worry about chasing payments or cards being
denied.
l All the billing is handled by the mobile phone operator.
l It is easy and quite often costs nothing to set up.
The main advantages of the SMS payment system for both customer and business users are that it is
quick, easy and safe and SMS payments or text payments are, for those reasons, becoming one of the
fastest growing payment methods in the world.
WAPPayments:
WAP Payments simply means using the WirelessApplication Protocol (WAP) facility on your Smart
phone to connect to the internet and then using an online payment method such as PayPal, Google
Wallet orYahoo Wallet or simply entering your credit card details into the payment box on a company’s
website.
Some mobile network operators allow users to pay for WAP Payments directly from their mobile
phone bill as with standard SMS payments. Companies wishing to accept WAP payments need to talk
to a SMS payment solutions company to ensure they get a WAP payment gateway installed on their
site.
DownableApps:
Apps are basicallylittle, self-contained programs, used to enhance existing functionality, hopefully in a
simple, more user-friendly way. Modern smart phones come with powerful web browsers, meaning

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 you can do pretty much anything you can do on a desktop computer in a phone’s browser. Online sites
and services now go down the standalone app route, giving them better control of the user experience
and, hopefully, making everything simpler and quicker to open and use.
In case of online banking, you need to sign in to your bank’s web site using the phone’s browser, but it’ll
be a painful doing text entry, resizing the display so you can see the little box for the PIN, having to sign
in every time and more minor modern frustrations.
A banking app simplifies the process, remembering your login information for next time and presenting
the critical data about how much moneyyou haven’t got in big, chunkyfonts, designed to make everything
vastly more readable on a smaller phone display and that’s the essence behind most apps. They aim to
make life easier and tasks better suited to mobile use.
Mobile Banking facilities: Services available through Mobile Banking are:
 Account information
 Mini-statements and checking of account history
 Alerts on account activity or passing of set thresholds
 Monitoring of term deposits
 Access to loan statements
 Access to card statements
 Mutual funds / equity statements
 Insurance policymanagement
Investments
 Portfolio management services
 Real-time stock quotes
 Personalized alerts and notifications on security prices
Support
 Status of requests for credit, including mortgage approval, and insurance coverage
 Check (cheque) book and card requests
 Exchange of data messages and email, including complaint submission and tracking
 ATM Location
Content services
 General information such as weather updates, news

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 Loyalty-related offers
 Location-based services
Security measures implemented for Mobile Banking:
 SMS channels can be used with encryption bymobile payment applications to protect data integrity
and security.
 Use of crypto-Java SIM cards & PKI (Public Key Infrastructure) for establishing hierarchy of
trust; non-repudiation.
 Debit/Credit cards linked to a specific phone number of consumer for added transaction security
 Implementation of secure PIN / One time password for transactions
 For a financial application, gateways should reside behind your firewall instead of the carrier
premises.

2.5 Internet Banking

Internet Banking allows you to conduct bank transactions online. In a broad sense, it is the use of
electronic means to transfer funds directly from one account to another, rather than by cheque or cash.
Systems of banking in which customers can view their account details, pay bills, and transfer money by
means of the internet. The remote deliveryof new and traditional banking products and services through
electronic delivery channels.
Uses of Internet Banking: Customers use a password for conducting a number of transactions like
NEFT funds transfers, pay taxes, etc. On line purchases of railway / bus / hotel bookings, are all
permitted in this channel. They can even fill up loan applications online. Uses of Internet Banking
include the following also:
 Bill Payment
 Credit Card
 Insurance
 Customer services
 Recharging your prepaid phone
 Shopping
How to use Internet Banking?
Step 1: Access Internet Banking - Obtain your User ID and Passwords.
Step 2: Create your Own Unique User ID.
Step 3: Link the Account Number to your User ID

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 What are the advantages of Internet Banking?
Advantages of Internet Banking are:
 Less Cost
 Transaction speed
 Efficiency
 Speed banking
 Vast coverage
 Available 24 X 7
Security risks in Internet Banking:
Security Risks faced are similar to one faced in the online banking:
 Increasing number of fraudulent websites
 Fake emails purporting to be sent from banks
 Use of Trojan Horse programs to capture user ids and password
Precautions to be taken while doing Internet Banking:
Use of technology in banking business has tremendously increased in India as in the west. Electronic
delivery channels - increased choices to customers to transact with ease and convenience. Wholesale
and retail payment and settlement systems have enabled faster movement of money to settle funds
among banks / customers. Precautions to be taken are:
 Ensuring security while banking online is to keep your password and pin number a secret.
 The security of your personal computer is very important for safe internet banking. Therefore,
always install antivirus software and software to remove spyware.

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 Checking your bank statements regularly will help you detect any transaction that has taken place
without your knowledge
 While banking through the internet, make sure that the banking session is secure.
 In addition, always remember to completely log off, after completing the banking session.
 Bank have implemented One Time password (OTP) for online payments for purchases
Phishing: “Phishing” is one of the most commonly used forms of cyber attack. Phishing is the criminal
attempt to acquire personal information such as usernames, passwords, and credit card details by
masquerading as a trustworthy individual or entity in all sorts of electronic communication such as e-
mail, websites and call to action notices.”
Different types of phishing: spear phishing, clone phishing, whaling phishing
One of the frequently used phishing method is as follows:
 Customers’ computers are infected by malware which the criminals control by faking questions
that are normally asked by the banks
 Unaware customers answer the questions, and the criminals use the information to transfer money
from the customers’ accounts
 The victims come to know only when they get an SMS message of the transfer or see the balance
in their accounts.
Banks try to prevent cyber attacks for its customers: A Big challenge banks facing is to educate
their customers. Banks use the communication channels: websites, e-mail, SMS or social media to get
the message out. Banks also warn customers to protect their computers with good quality effective
Anti-virus software.
But fixing a security problem and restoring trust can be a costly and time-consuming venture. Many
banks have their security systems audited and upgraded and can assure customers that they are future
proof. Criminals generally keep away from the banks which are proactive in customer education and
protect their systems with appropriate antivirus software.
Difference between Online Banking and Internet banking (iBanking) service: They are one &
the same. “Online Banking” is the new name given to our Internet Banking or iBanking service through
which customers can access their account or credit card details via internet and much more!

2.6 ATMs
ATMs are primarily machines to securely store and dispense bank notes. ATM is a preferred self-
service channel available to cardholders. The services available include payment of utilitybills, topping
up of mobile phones, reloading prepaid cards, etc. Other services such as payment of government
benefits, entitlements, or micro loans require the disbursement of cash.ATMs are open 24/7 – customers
do not have to visit their branch for withdrawing cash; ATM are Convenient to banks – since they
reduce their cost of branch-operation.

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 Purpose ofATM: ATM is a computerized machine that provides the customers of banks the facility of
accessing their account for dispensing cash and to carry out other financial & non-financial transactions
without the need to actually visit their bank branch.
Uses of ATMs:
 24-hour access to cash
 ViewAccount Balances & Mini-statements
 Order a Cheque Book / Account Statement
 Transfer Funds between accounts
 Refill your Prepaid card
 Pay your utilitybills like Electricitybills, post-paid mobile bills
 Deposit cash or cheques
 Change your PIN
 Learn about other products
Structure of ATMs:

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The cards issued by banks in India may be used at any bankATM within India. However the savings
bank account holders can transact a maximum of five transactions free at other banksATMs in a month -
financial and non-financial, beyond which the customer will be charged by his/her bank.
How to useATMs for cash withdrawal:
Customer is given an ATM (Automated Teller Machine) card with a PIN (Personal Identification
Number) by the Bank where the customer has an account. Customer needs to change the password
before using the card.
Customer inserts the card in the slot of theATM machine. Select the language in which the customer
wants the instruction to be given. Customer inputs the PIN using the key board.
Once the PIN is verified by theATM, customer selects the service from the various options available.
Customer selects the cash withdrawal option. Customer inputs the amount he wants to withdraw.
Confirm the amount is correct.ATM will dispense the cash which the customer takes. Customer presses
the exit option and the card is dispensed by theATM which the client keeps with him.Acustomer has
option to request for a paper transaction slip to be provided by the ATM.
If the customer has registered for SMSAlert, He will give a SMS alert on his mobile about the transaction
carried out.
If card is lost / stolen, the customer has to contact the card issuing bank immediately on noticing the loss
so as to enable the bank to block the card. Cash withdrawals have minimum and maximum limits per
day, set by the card issuing banks. In case a transaction fails at anATM and the account is also debited,
the customer should lodge a complaint with the card issuing bank at the earliest.
There is a time limit for the card issuing banks for re-crediting the customer’s account for a failedATM
transaction. As per the RBI instructions banks have been mandated to resolve customer complaints by
re-crediting the customer’s account within 7 working days from the date of complaint. Effective from
July 1, 2011, banks have to pay customers Rs. 100/- per day for delays beyond 7 working days. If the
complaint is not lodged within 30 days of transaction, the customer is not entitled for any compensation
for delayin resolving his / her complaint. If the bank does not redress the complaint within the stipulated
time, the customer can make a complaint to the local Banking Ombudsman.
Replenishment of cash in ATMs:
Some banks have their own arrangements to replenish the cash in theATMs. Cash in theATMs will be
accounted for in the Branches which are managing them.
Some banks have a system in which all theirATMs are taken care of by the third partyservice agencies.
The risks of maintenance of theATMs and the insurance cost will be met by the Service agencies.

2.7 Summary:
 AComputer is useful as it accept, stores and retrieves data speedily. It consists of input, CPU and
Output unit. CPU consists of 3 units’viz. Control unit, Memory Unit andArithmetic Logic Unit
(ALU).

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