Electronic Banking
Long-term hi-tech innovation and competition among existing banking organizations and new entrance in the industry have allowed for a much wider range of banking products and services to become easily reached and delivered to retail and wholesale customers through an electronic distribution channel collectively referred to as e-banking.
Electronic banking, also known as electronic fund transfer (EFT), uses computer and electronic technology as a substitute for checks and other paper transactions. Efts is initiated through devices such as cards or codes that you use to gain access to your account. Many financial institutions use an automated teller machine (ATM) card and a personal identification number (PIN) for this purpose. The federal Electronic Fund Transfer Act (EFT Act) covers some consumer transactions.
Electronic banking offers some services –
Personal Computer Banking allows you to conduct many banking transactions electronically via your personal computer. You can use your computer to view statements, balances; also can pay the bills electronically.
Automated Teller Machines or 24-hour Tellers are electronic terminals that let you bank almost any time. To withdraw cash, make deposits, or transfer funds between accounts, you generally insert an ATM card and enter your personal identification number (PIN). Some ATMs impose an extra, or usage fee, on consumers who are not members of their institution or on dealings at remote locations. ATMs must disclose the existence of a surcharge on the terminal screen or on a sign next to the screen.
Pay-by-Phone Systems let you telephone your financial institution with instructions to pay certain bills or to transfer funds between accounts. You must have an agreement in advance with the institution to make such transfers.
Direct Deposit lets you allow specific deposits, such as paychecks and social security checks, to your account on a usual basis. You also may pre-authorize direct withdrawals so that recurring bills, such as insurance premiums, mortgages, and utility bills, are paid automatically.
Internet banking makes good sense for financial institutions. Electronic commerce opportunities for small and medium sized enterprises require a reliable and low cost electronic payment system. However, many electronic payment issues are institutional rather than technical. The acceptance and legal status of electronic payment systems will have a major impact on confidence and trust in e-commerce.