Electronic Banking, Online Banking and Internet Banking

by Bwalya Mwaba

Published on this site: July 11th, 2006 - See more articles from this month

Electronic banking or Electronic Fund Transfer or EFT) uses computer and electronic technology as a substitute for checks and other paper transactions. It involves many different types of transactions. You can access your money through an automated teller machine (ATMs), the internet (Internet and Online Banking), the telephone (Pay-By- Phone) or Direct Deposit of paychecks into checking or savings accounts.

With internet banking you can perform transactions over the internet through a secure bank website. Electronic banking is very useful for banking outside bank hours and for banking from anywhere where internet access is available.

Electronic Fund Transfers (ETF's) are usually initiated through devices like debit cards or codes that let you access your account in a secure way. Many financial institutions such as banks and credit unions use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose. Some financial institutions use other forms of debit cards such as those that require a signature or a scan.

Electronic Fund Transfers (ETF's) offer various services to consumers.

1. Online Banking (Internet Banking or Personal Computer Banking)
   
   Lets you handle many banking transactions using your personal computer. With internet access and a computer, you can view your account balance, request transfers between accounts, and pay bills electronically over the internet. Online banking also offers such features as electronic bill payment and access to downloadable bank statements which can be imported in a personal finance program.
   
   
2. ATM's or Automated Teller Machines (24-hour Tellers)
   
   These are electronic terminals that let you bank almost any time. You can use them to withdraw cash, make deposits, or transfer funds between accounts by inserting an ATM card and entering your PIN. Some financial institutions and ATM owners charge a fee for this service but they are required to tell you they charge a fee and its amount before you complete the transaction.
   
   
3. Direct Deposit Facility & Direct withdrawals
   
   Direct Deposit lets you authorize specific deposits, such as paychecks and Social Security checks, to your account on a regular basis. You can also pre-authorize direct withdrawals so that recurring bills, such as personal loans, insurance premiums, mortgages, and utility bills, rent, and so on are paid automatically.
   
   
4. Pay-By-Phone
   
   This allows you to call your bank or credit union with instructions to pay a bill or to transfer funds between different accounts. To make such transfers, you must have an agreement with the institution.
   
   
5. Point-of-Sale Transfers
   
   Lets you pay for purchases with a debit card or an ATM card. A debit
   card purchase transfers money from your bank account to the store's account.
   
   
6. Electronic Check Conversion
   This system converts a paper check into an electronic payment at the
   point of sale or elsewhere.

Electronic banking services differ between different banks, credit unions and other financial institutions. If you decide that you want to use electronic banking then you should shop around for the most suitable package that meets your needs.

Bwalya Mwaba writes for the Credit Unions Guide website at
http://www.creditunionsguide.org/ and also contributes articles and content at http://www.home-loans-guide.org.uk/ regularly for the Home Loans Guide Website.