Topic 190

Banking and finance: EFT, ATMs, Internet banking and brokerage, electronic cash, insurance by Su Chen

Electronic banking also known as electronic funds transfer EFT, is simply the use of electronic means to transfer funds directly from one account to another, rather than by check or cash. You can use electronic funds transfer to:

Have your paycheck deposited directly into your bank or credit union checking account.

Withdraw money from your checking account from an ATM machine with a personal identification number (PIN) at your convenience store, day or night.

Instruct your bank or credit union to automatically pay certain monthly bills from your account, such as your auto loan or your mortgage payment.

Use your computer and personal finance software to coordinate your total personal financial management process, integrating data and activities related to your income, spending, saving, investment, etc.

Other types or systems of electric banking include Automated Teller Machines known as ATM, Direct Deposit and Withdrawal Services, Pay by Phone Systems, Point-of-Sale Transfer Terminals.

Briefly description:

Automated Teller Machines also called 24-hour tellers that are electronic terminals which give consumers the opportunity to bank at almost any time. To withdraw cash, make deposits or transfer funds between accounts, a consumer needs an ATM card and a personal identification number.

Direct Deposit and Withdrawal Services allow consumers to authorize specific deposits, such as paychecks or social security checks, to their accounts on a regular basis.

Pay by Phone Systems let consumers phone their financial institutions with instructions to pay certain bills or to transfer funds between accounts.

Point-of-Sale Transfer Terminals allow consumers to pay for retail purchase with a check card.
These are different types of internet banking and finance. As internet is widespread over the world, the role of internet becomes more and more important in our daily activities. Internet becomes the basic requirement for every company, not only to show how smart they are but also with the internet, it is much easier for trade over the world. Especially in the modern society, cyber shopping and internet banking becomes poplar among people. More and more people choose to use the internet banking system rather then actually go to the bank for asking this particular service.

One reason may be that it waste time to line up in the bank especially during the weekend, and second use the internet is more convenient. Since internet banking can do everything for you, same as what real people will do for you. Your request will accept immediately. Of course, internet banking and finance not only limit in these services. Before, when people need to get the money, they will have to go to the bank and wait to get their money from their account or deposit book.

Usually it takes lots of time for waiting there plus sometimes it will be confuse with other people. But in the modern society, consumers can get the money whenever and wherever they want to. Since, ATM are in everywhere, and what matters more is that it is 24—hours. Think about that when you have a emergency, but at this time you do not have enough money to pay it, and it is already 4 o’clock am. What will you do? Waite for bank to open, no of course not, you will just go to use the ATM to get the money.

Of course this is not the only function for this, by using the ATM, you also can pay your monthly bill and other activities in the same time. Although you may think it is a little thing, in fact for old people rather than actually go to the office to pay the bill they can just go somewhere near their home to pay all these. It protects the old people from some potential dangerous.

One more thing is that, recently cyber shopping becomes extremely poplar among young people. Why? Because what they need to do is just sit in front of the computer and click some buttons to find out what they want to buy then use the electronic cash or internet banking to pay the money. Then waiting for the product to come, how smart it is. It encourages the economic activities over time, trade is no longer limited in the paper but instead it can happen in everywhere.

Like everything has two sides, there are also some disadvantage of internet banking and finance. When you pay the bills or transfer the money to other account, it is very easy to make a mistake during the process. You may have to really take care about what you have filled in the form or you will just lose your money, and it is pretty complicate to correct all these mistakes you have been made. Second, because it is for people to use, what you need is only your ATM, EFT or Credit card. So in other words, you may lose your card accidentally. Then you have to go back to the bank this time, and report to them, and make a new one. If you are unlucky, some one may even use your credit card to buy things for themselves, use your money.

Overall, the advantages of internet banking and finance are greater than its disadvantages. For the society point of view, this new service increases the social welfare in the long run. People get benefit from it and it makes life much easier.