6. EFTPOS

EPOS tills allow their customers to pay for their shopping using a debit or credit card instead of cash. (EPOS = Electronic Point Of Sale)

The money has to be taken electronically from the customer's bank account and paid to the supermarket's account. This process of moving money is called Electronic Funds Transfer at the Point of Sale or EFTPOS.

On the back of a debit card, you will see a black magnetic stripe. This contains the electronic details needed to allow money to be transferred from your account. The card is swiped through the magnetic reader on the till, which allows it to pick up the information. At that point, an automated request for approval is sent to the bank computer via the telephone network.

The bank computer checks that there is enough money in the account to complete the purchase.

In order to improve security, the bank / credit card computer also checks to see if the card has been reported as stolen. It will also check for unusual spending behaviour when using that particular card to spot possible fraudsters. For example, if that card is used 100% of the time in Leeds and now it is being used heavily in London, it may ask the customer to prove their identity at the shop.

If everything is fine, a message is sent back to the EPOS unit to authorise the purchase and funds are transferred from your account to the merchant account.

The supermarket needs to be sure that the card does belong to the customer and the customer wants to be sure that no one else is using their card. So in order to authorise the money being taken from the card, the customer has to enter a four digit code. This system is called 'Chip and PIN'.