Electronic Banking Bonanza Grade Level 7-9

Electronic Banking Bonanza Grade Level 7-9 Introductory Level Time to complete: 90 minutes National Content Standards Family and Consumer Science Standards: 2.4.1, 2.5.4, 2.6.1 National Council on Economic Education Teaching Standards: 10, 11 National Standards for Business Education Personal Finance: VI.1, VI.2, VI.3-4 Objectives Upon completion of this lesson, students will be able to: Define electronic banking. Describe the benefits of electronic banking Identify the different types of electronic banking Recognize the safety precautions for electronic banking Introduction There has been significant growth in electronic banking (e-banking) over the past few years but the topic is still relatively new to many consumers. Like the great gold rush when millions of people moved west, millions of banks, businesses and people are making the move to electronic banking. E-banking allows access to money electronically in a fast and paperless way. Electronic banking uses computer networks to transfer funds electronically (rather than by check or cash) among various bank accounts. E-banking allows a person to make withdrawals, deposits, and bill payments, check account balances, and transfer money between accounts using the phone, Internet, or store machines rather than in person. Benefits of e-banking include: 24-hour access Fast Paperless Convenient Worldwide access A debit card is a plastic card which looks like a credit card, but is electronically connected to the cardholder s bank account for purchases. When a purchase is made, money is automatically taken from the designated account. Some cards are dual function cards for ATMs and debit cards, meaning one card performs both functions. Debit cards require using a personal identification number (PIN) to access the account to perform transactions. A PIN confirms that the user of the debit card is authorized to access the account. The card is used by swiping it through the store machine or inserting it into the ATM machine. To authorize the purchase a PIN must be entered or a receipt must be signed. Automated teller machines (ATMs) or cash machines are electronic computer terminals which offer automated, computerized banking where you can withdraw cash or deposit funds into an account. ATMs can be found in a variety of places including supermarkets, financial institutions, and convenience stores. ATMs are accessed with an Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 1

1.2.2 ATM or debit card and a PIN. ATMs are usually free of charge for customers using his/her financial institution s ATM. Some ATMs charge a fee for use, and financial institutions may also assess a fee if a customer uses another banks ATM instead of theirs. If the ATM charges a fee, the amount will be posted on the ATM screen. To use an ATM, insert the card into the slot, type in the PIN and perform the desired transaction. Keep the printed receipt to compare with that month s bank statement. E-Banking safety As a safety precaution, when using debit cards in a store, a photo ID is often requested to verify the person making the payment is the person responsible for payment. However, e-banking does not usually involve exchanges between people. Therefore, procedures must be in place and products must be protected from theft and fraud. The following are tips to protect consumers who use debit cards and other e-banking products and services. To use ATM and debit cards safely, follow these tips: Sign the back of the card and write see ID Memorize the PIN and keep it hidden o Do not write it down where the card is kept o Do not tell others o Shield the PIN with your body when using ATMs o Do not give it out over the phone or e-mail o Change the PIN if it is suspected someone else knows it Report lost or stolen debit/atm cards immediately Write down the card number and financial institution contact information. Store the information in a safe place separate from the card in case the card becomes lost or stolen. Overdraft As a result of The Card Act (effective 2010), consumers have options regarding overdrafts for transactions made with their debit or ATM cards. An overdraft occurs when a consumer withdrawal from a bank account exceeds the available balance. Consumers must now choose to allow their depository institution to accept transactions which will exceed their available balance and be charged a $20-$30 transaction fee. Or, a consumer may choose to allow a transaction to be declined if there are not sufficient funds. However, debit card transactions may not clear the depository institution until the next business day depending upon how quickly a business processes its sales. For this reason it is important to know the account balance prior to making a debit card purchase. In this lesson electronic banking will be explored. Students will identify how e-banking works, the different types of electronic banking, terminology, advantages and drawbacks. Body *Before the lesson: Print and cut Banking Timeline game cards 1.2.2.H1. On the board draw a timeline beginning with the year 1750 and mark it every 50 years up until the year 2050 or use the Banking Timeline overhead 1.2.2.D1 to project an enlarged timeline onto the wall/board. *Before the lesson: Print and cut each piece of the Bulletin Board 1.2.2.N1, 1.2.2.N2, 1.2.2.N3 and 1.2.2.N4. Laminate the Bulletin Board Clouds 1.2.2.N3 and Bulletin Board Money Bags 1.2.2.N4 for students to write information on with overhead projector markers. After teaching the lesson, assemble the bulletin board as a class. 1. Have students read Electronic Banking Bonanza information sheet 1.2.2.F1 for homework. 2. Pair students in groups of two. a. Evenly distribute one or more of the Banking Timeline game cards 1.2.2.H1 to each pair of students so all cards have been passed out. Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 2

1.2.2 b. Allow a couple of minutes for the students to work with their partner to determine when on the timeline they think the statement on their card occurred. c. Have the students from each group place their card on the timeline. d. Use the Answer Key 1.2.2.C1 to review the order of the events on the timeline. 3. Discuss changes in the banking industry. a. Did students know about all of the events described? b. Is it surprising when some of the advancements were developed? 4. Pass out the Electronic Banking Bonanza note taking guide 1.2.2.L1 and instruct students to complete during the PowerPoint presentation. 5. Pass out the Bulletin Board Clouds 1.2.2.N3 and Bulletin Board Money Bags 1.2.2.N4 pieces to students. a. As electronic banking examples are discussed, have students write descriptions of each on the clouds with overhead projector markers. b. When safety tips are discussed, have students write the tips on the bags of money with overhead projector markers. 6. Present the Electronic Banking Bonanza PowerPoint presentation 1.2.2.G1. a. Slides 1 2 : Title and Introduction b. Slide 3: E-Banking c. Slide 4: Why the Big Boom? d. Slide 5: Types of E-Banking e. Slide 6: Debit Cards i. Allow time for a student(s) to write the definition and additional information of a debit card on a cloud. f. Slide 7 8: ATMs i. Allow time for a student(s) to write the definition and additional information of an ATM on a cloud. g. Slide 9: How to use the ATM h. Slides 10-11: E-Banking Safety i. As each safety tip is discussed, allow time for a student(s) to write the tip on the money bags. i. Slide 12: Overdraft j. Slide 13: The Future of E-Banking k. Slide 14: Happy Trails 7. Have students brainstorm with their partner what banking advancement they think might be on the timeline in 2050. a. Allow each group to share. 8. Assemble the Bulletin Board pieces as a class. a. Bulletin Board 1.2.2.N1 b. Bulletin Board 1.2.2.N2 c. Bulletin Board 1.2.2.N3 d. Bulletin Board 1.2.2.N4 Conclusion Play Fly Swatter Facts to review electronic banking terminology and concepts. Refer to Fly Swatter Facts activity instructions 1.2.2.J1. Assessment E-Banking Basics worksheet 1.2.2.A1 Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 3

1.2.2 Materials E-Banking Basics worksheet 1.2.2.A1 Banking Timeline overhead 1.2.2.D1 Electronic Banking Bonanza information sheet 1.2.2.F1 Electronic Banking Bonanza PowerPoint presentation 1.2.2.G1 Electronic Banking Bonanza note taking guide 1.2.2.L1 Banking Timeline activity cards 1.2.2.H1 Fly Swatter Facts activity instructions 1.2.2.J1 Bulletin Board 1.2.2.N1 Bulletin Board 1.2.2.N2 Bulletin Board 1.2.2.N3 Bulletin Board 1.2.2.N4 2 Fly Swatters White Board/Markers Resources Introduction to Depository Institutions lesson plan 2.2.1 For more information about Check 21, visit: www.consumersunion.org/finance/ckclear1002.htm www.federalreserve.gov/paymentsystems/truncation/default.htm For more information on the timeline of electronic banking events visit: PBS: Electric Money http://www.pbs.org/opb/electricmoney Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 4

Total Points Earned 24 Total Points Possible Percentage Electronic Banking Bonanza 1.2.2.L1 Note Taking Guide Name Date Class Directions: Complete the following note taking guide during the PowerPoint presentation. Each blank is worth 1 point. *What is electronic banking? *With e-banking, people can,,,, and. *What are the benefits of e-banking?,,, and. Debit Card PIN ATM Looks like: Stands for: Stands for: When a purchase is made, money is: PIN is used to confirm: What can a customer do at an ATM: Requires a to use. After a customer swipes the card to make a purchase, a PIN must be entered or the receipt. When would a fee be charged at an ATM? Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 5

Electronic Banking Safety 1.2.2.L1 Note Taking Guide *Sign the back of the cards and write. *Memorize the and keep it hidden. - - - - - *Write down the and financial institution. *Report cards to the financial institution immediately. Current Trends *If a consumer chooses to allow transactions to occur when there is not enough money in their account a charge of $ may be applied. *If a consumer chooses to not allow transactions to occur when there is not enough money in their account the transaction will be. Future Trends *E-banking is a continually changing market. One card is being developed to function as a,, and. *There may be a change from PIN accessed accounts to:,, and. *What other future trends do you predict in the next thirty years? Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 6

1.2.2.A1 Worksheet E-Banking Basics Total Points Earned 24 Total Points Possible Percentage Name Date Class Directions: Circle a T if the statement is true and an F is the statement is false. If the statement is false change the statement so that it is correct (2 points each). 1. T F Memorize the PIN number and keep it in your wallet. 2. T F E-banking allows 24 hour access to bank accounts. 3. T F A PIN number is not needed for a debit card. 4. T F All ATM machines charge a fee to use them. 5. T F Sign the back of cards and write See ID. 6. T F Individuals can access their bank accounts worldwide using e-banking. 7. T F You may choose to have depository institutions cover your transaction if you don t have sufficient funds in your account. 8. T F A photo ID is always required to use a debit card. Directions: Match the following terms with their definitions (2 points each). 9. Money is automatically taken out of the account when a purchase is made. 10. A computer terminal that is used to make deposits or take cash out of a bank account. 11. Confirms the user of the card is authorized to access the account. 12. If a transaction is approved by a store and there was not enough money in the account to cover the purchase the consumer may be fined this amount of money. A. ATM B. PIN C. $20-30 D. Debit Card Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 7

1.2.2.D1 Overhead Banking Timeline 1750 1800 1850 1900 1950 2000 2050 Take Charge Today May 2010 Electronic Banking Bonanza Page 8

1.2.2.H1 Activity Cards Able to carry your credit cards electronically on your cell phone. The first bank was established in the United States. Bank of America issues the first credit card. Debit cards are introduced. The first successful ATM installed in the USA. You can scan your fingerprint at the checkout stand to pay for items. Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 9

The Card Act passed which provided consumers with a choice regarding overdraft protection. Ability to electronically pay your bills on line. The first mint in the United States opened in Philadelphia. 1.2.2.H1 Activity Cards Contactless payment cards and fobs are developed. Money can now be transferred electronically across computer terminals. Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 10

1.2.2.C2 Answer Key Fly Swatter Facts Directions: Write terms from the list below randomly on the board. Divide the class as follows: each fly swatter fact board should have no more than 15 students. One student will be the facilitator for the board, and 7 students will be on the relay team for each board. The facilitator will read a definition/description from the list below. After the definition/description has been read, a student from each team can then walk to the board and swat the correct answer with his or her fly swatter. The student who swats the correct term first receives one point and erases the correct answer. The team with the most points wins. Materials: 2 fly swatters White board and markers Question/Statement 1. An electronic computer terminal used to make deposits or take cash out of a bank account. Answer 1. ATM 2. Personal Identification Number 2. PIN 3. Connected to the cardholder s bank account and used for purchases. 3. debit card 4. Provides consumers with a choice in regards to overdraft protection. 4. The Card Act 5. Authorizes bills to be paid automatically each month by a specified bank account. 5. direct payment 6. To whom should you report lost or stolen cards immediately? 6. your financial institution 7. Electronic access to bank accounts and cash, 24 hour access, moves money without paper. 8. Electronic banking allows access to money electronically in a fast and way. 9. Electronic banking uses to transfer funds electronically. 10. To use a debit card or ATM safely, sign the card and write. 11. Write down and store it in a safe location separate from the card in case the card becomes lost or stolen. 7. e-banking 8. paperless 9. computer terminals 10. see ID 11. card number and financial institution contact information Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 11

1.2.2.F1 TAKE CHARGE TODAY Electronic Banking Bonanza What is E-Banking? Electronic banking or e-banking gives people access to bank accounts and cash in a fast and paperless way. Computer networks are used to transfer money electronically among bank accounts. E-banking allows a person to make withdrawals, deposits, and bill payments, check account balances, and transfer money over the phone, Internet, or at a store or automated teller machines (ATMs), rather than in person or through the mail.. Why can e-banking be more convenient than banking in person or through the mail? Benefits of E-Banking: 24 hour access Fast No paper Variety of methods Convenient Worldwide access Debit Card A debit card is a plastic card which looks like a credit card, but it is connected to the cardholder s bank account. When a purchase is made, money is automatically taken from the designated account. Some cards are dual function cards, meaning one card performs both ATM and debit card functions. Debit cards require using a personal identification number (PIN) to access an account to perform transactions. A PIN confirms that the user of the debit card is authorized to access the account. Debit cards can be used: At a store for purchases: These machines are located at a store and allows the customer to use a debit card to make purchases. At an automated teller machines (ATMs) or cash machines. ATMs Automated teller machines or cash machines are electronic computer terminals which offer automated, computerized banking. ATMs can be found in a variety of places including financial institutions, supermarkets, and convenience stores. ATMs offer simple and fast 24 hour access to bank accounts. ATMs can be accessed with an ATM or debit card and a PIN. Why is a PIN required when using an ATM? Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 1

ELECTRONIC BANKING BONANZA 1.2.2.F1 E-Banking Safety and Precautions Sign the back of the debit card and write See ID. Memorize the PIN and keep hidden. Do not write it down where the card is kept. Do not tell others the PIN. Shield the PIN with body when using ATMs. Do not give it out over the phone or through email. Change the PIN if it is suspected someone else knows it. Report a lost or stolen card immediately! Write down the card number and financial institution contact information. Store financial institution and contact information in a safe place separate from the card in case the card is lost or stolen. Why is it important to sign the back of a debit card with See ID? Where is a safe place to store financial institution and card contact information? Overdraft An overdraft occurs when a consumer withdrawal from a bank account exceeds the available balance. As a result of The Card Act (effective 2010), Consumers must now choose to allow their depository institution to accept transactions which will exceed their available balance and be charged a $20-$30 transaction fee. Or, a consumer may choose to allow a transaction to be declined if there are not sufficient funds. However, debit card transactions may not clear the depository institution until the next business day depending upon how quickly a business processes its sales. For this reason it is important to know the account balance prior to making a debit card purchase. Future Trends Electronic banking is always changing. It is important to keep yourself informed of new advancements in technology to keep up with the banking industry! In the future we may see a change from PIN accessed accounts to fingerprint, hand or voice scans. Some companies may move towards one card that acts as a smart card, debit card, credit, and ATM card all in one! Take Charge Today Revised May 2010 Electronic Banking Bonanza Page 2