Improving The Response Time Of An Atm Based Electronic Payment System Using Recursive Algorithm

ABSTRACT

Systems that facilitate card-less financial transactions are provided. The innovation enables card-less ATM (automated teller machine) transactions such as cash withdrawals, transfers, balance inquiries, etc. In aspects, customers can set up an ‘electronic wallet’ account based upon a pre-set range or otherwise. Accordingly, access to the ‘electronic wallet’ is granted or denied based upon responses to challenges presented. However, often it is slow response is usually notice on the system when performing all these transaction. This work deals on how this slow response can be tackled using recursive algorithms.

TABLE OF CONTENTS

 TITLE PAGE

APPROVAL PAGE

DEDICATION

ACKNOWELDGEMENT

ABSTRCT

TABLE OF CONTENT

CHAPTER ONE

• INTRODUCTION
• BACKGROUND OF THE STUDY
• OBJECTIVE OF THE STUDY
• SCOPE OF THE STUDY
• ADVANTAGES OF THE STUDY
• LIMITATION OF THE STUDY

CHAPTER TWO

LITERATURE REVIEW

2.0      LITERATURE REVIEW
2.1      REVIEW OF THE STUDY
2.2     HISTORY OF AUTOMATED TELLER MACHINE IN NIGRIA
2.3    HISTORY OF AUTOMATED TELLER MACHINE IN NIGRIA

2.4 IMPACT OF AUTOMATED TELLER MACHINE ON BANKING PERFORMANCE

2.5      THEORETICAL FRAMEWORK

2.6      DESCRIPTION OF AN ATM CARD

2.6     DIMENSIONS OF AN ATM CARD

2.7     ATM USES AND NON-ATM USES

CHAPTER THREE

3.0      METHODOLOGY

3.1      RESPONSE-TIME ANALYSIS

3.2      RTA WHEN DEADLINE IS GREATER THAN PERIOD

3.3      CONVERGENCE OF THE FIX-POINT ITERATION

3.4      IMPROVING THE RUNTIME OF THE ANALYSIS

3.5    EVALUATION

3.6    ATM NETWORKING

3.7    RESPONSE TIME ANALYSIS (RTA) FOR ATM NETWORKS

CHAPTER FOUR

4.1      RESULT

CHAPTER FIVE

5.1      CONCLUSIONS

5.2      REFERENCES

CHAPTER ONE

• INTRODUCTION

The payment mechanism that consumers use to purchase goods and services has changed dramatically over the last 100 years. At the time, almost all consumer transactions were in cash while business payments were in cash or checks.  Proprietary charge cards appeared in the early 1900s, followed by “travel and entertainment” cards in 1950. It wasn’t until 1966, however, that the first general purpose credit card was introduced. Regarding the definition of Payment System as the mechanism to transfer fund from an account in bank A to another account in bank B, it can be illustrated as the money vessels whose function is to conduct the smooth financial transactions among businesses. In such position, Payment Systems have gained a considerable Central Banking attention around the globe to ensure safe and sound monetary transactions.

In Nigeria, the introduction of modern payment instruments can be traced back to early 1990s where central Bank Debit Card and ATM services. Since then almost all Nigerian banks have provided their customers with the card payment services focusing on cards with debit function and ATM services to tackle the problem of heavy branch traffics. The interbank card switch was introduced in 2002 and now all card issuing banks in nigeria are connected to the center; building up a uniform card payment network where all issued cards are accepted in all acquiring terminals. It is expected that a unified clearance system, will provide significantly greater efficiency, reduce crime and  money printing  costs  as  well as  improve  tax  collection  amongst other  benefits  .It  is  also expected to improve the quality of life of citizens who, once the system is fully operational, would no longer be required to spend considerable  time organizing things in person and would consequently be able to conduct activities immediately over the phone or over the internet.

1.1                                           BACKGROUND OF THE STUDY

Today, many users conduct their day-to-day cash withdrawals using automated teller machines or ATMs. Financial institutions issue customers ATM cards by which money can be accessed from customer’s accounts. Additionally, customers can conduct banking business, such as transfers, deposits, etc. by way of an ATM. In order to use their ATM card to withdraw cash or transact business, customers must enter their personal identification number (PIN) in addition to physically entering their card into the machine.

Most often, a PIN number is a four digit numerical number. This number, or secret pass-code, is often randomly generated by the financial institution that issues the card. Oftentimes, customers are able to modify or personalize this code either by contacting customer service or alternative via a Web or Internet interface. Many users select numbers such as birthdays, telephone numbers, anniversaries, social security numbers or the like as their PIN numbers.

As will be understood, the selection of logical and meaningful numbers can greatly decrease security of the ATM card/PIN combination. In other words, if a physical card ends up in the hands of an unscrupulous or malicious offender, it may be possible for the PIN code to discovered, if logical codes are selected.

As described above, an ATM is a computerized device that provides financial institution customers with access to funds and the ability to trigger transactions in a public space without the need for a human (e.g., bank teller) interaction. With regard to most conventional ATMs, the customer is identified by inserting a bank-issued plastic card (e.g., ‘ATM card’). This ATM card is similar to a conventional credit card in that it is usually equipped with a magnetic strip (or chip) that includes a unique card number together with security and identification information. As described above, to eliminate the possibility of unauthorized use, the customer enters a PIN number to validate identity or authorization.

Similar to physical visits to a bank branch, an ATM enables customers to access their bank accounts in order to make cash withdrawals or advances (e.g., credit card cash advances). Unfortunately, the conventional mechanisms that require a plastic card are inconvenient in that they require a user to carry the plastic card in order to be able access funds via an ATM.

1.2                                               OBJECTIVE OF THE STUDY

The objective of this work is to highlight how the efficiency and the response time of an ATM based electronic payment system can be improved using recursive algorithm.

1.3                                                  SCOPE OF THE STUDY

In this work  evaluate  the  relationship  between  bank  efficiency  and  electronic  payment systems  in  Nigeria.  In  this  study  we  used  the  recursive algorithm  method  as  an  instrument  for complicated non- linear trends especially with the limited observations. We employed the model in a bid to delineate relationship between bank efficiency which was proxied by output of banks (net profit- average of inter-banks transactions ratio) and electronic payment system- Automated Teller Machines (ATM)

1.4                                            ADVANTAGES OF THE STUDY

it is clear, electronic payment systems have a range of pros in comparison to traditional banking services:

1. Time savings. Money transfer between virtual accounts usually takes a few minutes, while a wire transfer or a postal one may take several days. Also, you will not waste your time waiting in lines at a bank or post office.
2. Expenses control. Even if someone is eager to bring his disbursements under control, it is necessary to be patient enough to write down all the petty expenses, which often takes a large part of the total amount of disbursements. The virtual account contains the history of all transactions indicating the store and the amount you spent. And you can check it anytime you want. This advantage of electronic payment system is pretty important in this case.
3. Reduced risk of loss and theft. You cannot forget your virtual wallet somewhere and it can not be taken away by robbers.
4. Low commissions. If you pay for internet service provider or a mobile account replenishment through the UPT (unattended payment terminal), you will encounter high fees. As for the electronic payment system: a fee of this kind of operations consists of 1% of the total amount, and this is a considerable advantage.

   5. User-friendly. Usually every service is designed to reach the widest possible audience, so it has the intuitively understandable user interface. In addition, there is always the opportunity to submit a question to a support team, which often works 24/7. Anyway you can always get an answer using the forums on the subject.

5. Convenience. All the transfers can be performed at anytime, anywhere. It’s enough to have an access to the Internet.

1.5                                           LIMITATION OF THE PROJECT

Having specified the well-known advantages of an ATM based electronic payment system, it is necessary to mention its limitation, the limitation is as below:

1. Restrictions. Each payment system has its limits regarding the maximum amount in the account, the number of transactions per day and the amount of output.
2. The risk of being hacked. If you follow the security rules the threat is minimal, it can be compared to the risk of something like a robbery. The worse situation when the system of processing company has been broken, because it leads to the leak of personal data on cards and its owners. Even if the electronic payment system does not launch plastic cards, it can be involved in scandals regarding the Identity theft.
3. The problem of transferring money between different payment systems. Usually the majority of electronic payment systems do not cooperate with each other. In this case, you have to use the services of e-currency exchange, and it can be time-consuming if you still do not have a trusted service for this purpose.

   4. The lack of anonymity. The information about all the transactions, including the amount, time and recipient are stored in the database of the payment system. And it means the intelligence agency has an access to this information. You should decide whether it’s bad or good.

4. The necessity of Internet access. If Internet connection fails, you cannot get to your online account.