What does your supermarket know that your banker doesn't?
That's a question many bankers are asking themselves these days,
as supermarkets go electronic and banks are still swamped in seas of
paper. For make no mistake, the Age of No Paper is coming fast,
faster than many expected, and it is good for each and every one of
Most folks have been in a supermarket that uses scanners, those
funny slots at the end of the moving belt. Inside the scanner is a
glowing red light that ``sees'' the unit pricing code (UPC) bars on
the box of cereal and rings it up on the cash register. That helps
the store keep better track of inventory and helps prevent errors in
ringing up sales.
And many folks now see automated teller machines (ATMs) in their
supermarket, which allows them to withdraw cash to pay for their
But the large majority of shoppers still write checks for their
groceries. That means, in most cases, you must have a check-cashing
card from the supermarket. You must go to the courtesy booth and
get the check pre-approved. Then you have to fill out the check and
go through the checkout hassle.
Now, suppose you could use your bank card - the same one you use
at the automated teller machine - to pay for your groceries? No
more getting the check approved. You just go through the checkout,
then present your card. The clerk passes it through a magnetic
strip reader and taps in the total amount of your bill. You type in
your personal identification number (PIN) on a keypad, and bingo!
What has happened here? Your checking account has been
automatically ``debited.'' That means the amount of the grocery
bill has been deducted from your checking account, just as if you'd
written a check but without the hassle. It's called Electronic funds
transfer, or EFT.
Electronic funds transfer is an outgrowth of a movement
nationwide in business to use computers to get things done more
quickly and efficiently. There's a big buzzword in business today:
Most see computers as the key business tool in improving
productivity. It started in business with automating to eliminate
paperwork. The more paper that has to be shuffled, the longer it
takes to get things done. Thus began what is called electronic data
interchange, or - if you can stand one more acronym in this column
today - EDI. Let's take a quick look at how this came to pass.
Electronic data interchange began 15 years ago in the
transportation industry as a better way to handle its immense amount
of paperwork. It was the brainchild of Edward Guilbert, president
of the Transportation Data Coordinating Committee in Washington,
D.C. Guilbert says the idea occurred to him while he was traffic
director for the Berlin airlift during World War II. …