When we hear the term “financial system”, we may think that we are not involved in it as ordinary citizens or small businessmen. We might consider that the financial system has to do only with large organisations and international businesses. This, however, is a common misconception. In fact, each one of us is a part of the financial system; whether a worker, a student, a pensioner, a businessman or a stay-at-home-parent. This article provides an explanation of the financial system and how we participate in it. Moreover, it is focused on financial institutions and specifically on banks and their activities in Cyprus. In addition, it makes a brief reference to the challenges faced by banks in Cyprus today. Furthermore, with respect to the new law regarding the acceptance of cards as a means of payment, it explains the types and use of POS systems.