Financial transactions

Combating fraudulent financial transactions will be of interest to all business of all kinds. In the many different ways we purchased goods all financial transactions pose a risk. Premiercallcentre.co.uk can help you with any questions you may have regarding how to protect your company and it can benefit your business or call centre.

Here is a list of different financial transactions

A financial transaction is an event or condition under the contract between a buyer and a seller to exchange an asset for payment. In accounting, it is recognized by an entry in the books of account. It involves a change in the status of the finances of two or more businesses or individuals.

Purchase

This is the most common type of financial transaction. An item or good is exchanged for money. This transaction results in a decrease in the finances of the purchaser and an increase in the benefits of the sellers. An example is a real estate transaction.

The Loan

This is a slightly more complicated transaction in which the lender gives a single large amount of money to the borrower now in return for many smaller repayments of the borrower to the lender over time, usually on a fixed schedule. The smaller delayed repayments usually add up to more than the first large amount. The difference in payments is called interest. Here, money is given for not any specific reason.

Mortgage

This is a combined loan and purchase in which a lender gives a large amount of money to a borrower for the specific purpose of purchasing a very expensive item (most often a house). As part of the transaction, the borrower usually agrees to give the item (or some other high value item) to the lender if the loan is not paid back on time. This guarantee of repayment is known as collateral.

Bank account

A bank is a business that is based almost entirely on financial transactions. In addition to acting as a lender for loans and mortgages, banks act as a borrower in a special type of loan called an account. The lender is known as a customer and gives unspecified amounts of money to the bank for unspecified amounts of time. The bank agrees to repay any amount in the account at any time and will pay small amounts of interest on the amount of money that the customer leaves in the account for a certain period of time. In addition, the bank guarantees that the money will not be stolen while it is in the account and will reimburse the customer if it is. In return, the bank gets to use the money for other financial transactions as long as they hold it.

Credit-card purchase

This is a special combination of a purchase and a loan. The seller gives the buyer the good or item as normal, but the buyer pays the seller using a credit card. In this way, the buyer is paying with a loan from the credit card company, usually a bank. The bank or other financial institution issues credit cards to buyers that allow any number of loans up to a certain cumulative amount. Repayment terms for credit card loans, or debts vary, but the interest is often extremely high. An example of common repayment terms would be a minimum payment of the greater of $10 or 3% every month and a 15-20% interest charge for any unpaid loan amount. In addition to interest, buyers are sometimes charged a yearly fee to use the credit card.

In order to collect the money for their item, the seller must apply to the credit card company with a signed receipt. Sellers usually apply for many payments at regular intervals. The seller is also charged a fee of normally 1-3% of the purchase price by the credit card company for the privilege of accepting that brand of credit card for purchases.

Thus, in a credit card purchase, the transfer of the item is immediate, but all payments are delayed.

Debit-card purchase

This is a special type of purchase. The item or good is transferred as normal, but the purchaser uses a debit card instead of money to pay. A debit card contains an electronic record of the purchaser's account with a bank. Using this card, the seller is able to send an electronic signal to the buyer's bank for the amount of the purchase,and that amount of money is simultaneously debited from the customer's account and credited to the account of the seller. This is possible even if the buyer or seller use different financial institutions. Currently, fees to both the buyer and seller for the use of debit cards are fairly low because the banks want to encourage the use of debit cards. The seller must have a card reader set up in order for such purchases to be made. Debit cards allow a buyer to have access to all the funds in his account without having to carry the money around. It is more difficult to steal such funds than cash, but it is still done via Shoulder surfing or skimming.

Shoulder surfing (computer security)

In computer security, shoulder surfing refers to using direct observation techniques, such as looking over someone's shoulder, to get information. Shoulder surfing is particularly effective in crowded places because it's relatively easy to observe someone as they:

• fill out a form.
• enter their PIN at an automated teller machine or a POS Terminal.
• use a calling card at a public pay phone.
• enter passwords at a cyber cafe, public and university libraries, or airport kiosks.
• enter a digit code for a rented locker in a public place such as a swimming pool or airport.

Shoulder surfing can also be done at a distance using binoculars or other vision-enhancing devices. Inexpensive, miniature closed-circuit television cameras can be concealed in ceilings, walls or fixtures to observe data entry. To prevent shoulder surfing, it is advised to shield paperwork or the keypad from view by using one's body or cupping one's hand.

Recent automated teller machines now have a sophisticated display which discourages shoulder surfers. It grows darker beyond a certain viewing angle, and the only way to tell what is displayed on the screen is to stand directly in front of it.

Certain models of credit card readers have the keypad recessed, and employ a rubber shield that surrounds a significant part of the opening towards the keypad. This makes shoulder-surfing significantly harder, as seeing the keypad is limited to a much more direct angle than previous models. Taken further, some keypads alter the physical location of the keys after each key press. For example the digit 1 may be the upper left on the first press, then moves to the bottom right for the second. Also, security cameras are not allowed to be placed directly above an ATM.

POS Terminals often available in shops, supermarkets, and fuel outlets are more difficult to use in a way that prevents shoulder surfing as they are often located in plain view on counters. It is good practice to shield the keypad with one hand while entering digits with your other hand.

Call premiercallcentre.co.uk and get a free advice on financial transactions and start making smarter business decisions today. See how we can help facilitate you.