Electronic Money
In the futuristic society that we now find ourselves in, electronic
money is becoming more prevalent. To better understand the concept
of electronic money we need to add some new terms to our vocabulary.
These terms are EFT, ATM, Debit Cards, POS, home banking systems,
direct deposit, stored value cards and smart cards.
EFT means electronic funds transfer or the method of moving
funds in and out of accounts by means of an electronic signal.
Telephone lines carry electronic tones that allow computer conversation
or information exchange. The two most common types of EFT today
are Internet banking and automated teller machines.
Internet Banking was introduced to Indianapolis in February
1999. It is not necessary to meet a bank staffer face-to-face.
An individual with Internet access can open, deposit to, or withdraw
from a bank account via cyberspace. Transactions can be done in
business attire or pajamas at anytime, seven days a week.
Automated teller machines (ATMs) are computer terminals
located at bank branches, airports, hotels and other businesses
that make it possible to do banking transactions 24 hours a day.
An individual can deposit and withdraw funds, do balance inquiries
or transfers, and make loan payments with minimal screen prompt
and keystrokes.
Debit cards are a secure way that an individual can access
their checking account without a paper check. The individual simply
inserts their card into an ATM or POS (point of sale)
terminal at a business and receives cash or applies the purchase
transaction as a debit (deduction) to their personal checking account.
Previously home banking systems had been limited to a bank
by touch-tone phone utilization. Now with the introduction of the
Internet, individuals can visually reinforce their bank by phone
transactions by logging on to their bank's web site. There is also
a virtual or Internet bank that has no physical offices.
Direct payments are found in two forms. The Federal Government
and many employers use the direct deposit system to electronically
deposit funds into an individual's checking or savings accounts.
Another form of direct payment is the pre-authorized check used
by many insurance companies, utilities and financial institutions
to deduct monthly payments from an individual's bank account. Some
creditors are now using this method as a convenient way for consumers
to pay on overdue accounts.
Stored value cards are now being marketed in the form of
telephone calling cards. The cards have minute values that are
accessed by means of a toll free number used in the placing of
long distance phone calls.
Smart Cards store personal, medical and financial information
within a computer chip implanted in the card. The financial information
may contain a section that will hold a certain dollar value that
can be reduced by use, like a debit or charge card, in POS or ATM
machines. The ATM can recharge the dollar amount available as the
account balance increases.
The above information should be understood to be a general
discussion of the subject matter and DOES NOT constitute
a legal opinion about the situation. For further information
please consult a qualified attorney.
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