In: Economics
Explain the history of using electronic transactions (essay/paragraph form)
The usage of e banking by the enterprises came into existence in mid 90’s.e banking came into existence in greater numbers because of low operating costs. First it is in the form of ATM’s and phone transactions. Recently it transformed to internet a new channel between customers and banks which benefits both. The main aim of e- banking services is to provide the customers a much faster services with low cost. From the last twenty years, banking sector has chosen a new method of banking based on the progress of information technology. In addition to these customers, transaction and communication abilities are fastened based on information technology.
The progress of electronic banking started with use of automatic teller machines and afterwards it developed to online banking. In the future it will be done in mobile phones(wap-enabled).Anyway online banking continues to be the best for financial transactions.
IMPORTANCE OF E-BANKING:
E banking provides many advantages for banks and customer’s
.e-banking has made life much easier and banking much faster for
both customers and banks.
Main advantages are as follows.
It saves time spent in banks
It provides ways for international banking.
It provides banking throughout the year 24/7 days from any place
have internet access.
It provides well-organized cash management for internet
optimization
It provides convenience in terms of capital, labour, time all the
resources needed to make a transaction.
Taking advantage of integrated banking services, banks may compete
in new markets, can get new customers and grow their market
share.
It provides some security and privacy to customers, by using
state-of-the-art encryption and security technologies.
What is e-banking?
Electronic funds transfer means computer systems are used to
perform financial transactions electronically. The EFT is used for
electronic payments and customer initiated transactions where the
cardholder pays using credit or debit card.
The transaction types are, Withdrawal,deposit,interaccount transfer ,inquiry, administrative transactions that covers non financial transactions including PIN change. Electronic Fund Transfer transactions needs authorisation and a means to match the card and card holder.EFT transactions require the cardholder’s PIN to sent online in encrypted form for validation by the issuer of the card.Other information may include the card holders address or the CVV2 security value printed on the card.
Electronic funds transfer transactions are activated during e-banking procedures.The different methods of e-banking are
“Online banking
Short message service banking
Telephone banking
Mobile banking
Interactive -TV banking”
Of all the above procedures online banking plays an important role
and maximum used by the account holders.now,discussing the above
one by one.
Online banking:
Online banking also called as internet banking, allows the
customers to use all the banking services from a computer which has
internet acess.The customer can perform financial transactions on a
secure website operated by the bank. Online banking offers features
such as bank statements, loan applications, funds transfer, e-bill
payments and account aggregation allows customers to monitor all
their accounts in one place.
Telephone Banking:
Telephone banking is a service provided by the banks which provides
customers to perform transactions on phone.All the telephone
banking systems uses automated answering system with keypad
response or voice recognition capability.To prove their identity
coustomers must provide a numeric or verbal password or answering
the questions asked by the call center representative.In telephone
banking coustomer cann’t withdraws and deposits cash but can do all
the other transactions.
Mostly there will be a coustomer care representative to which the customers speak ,although this feature is not guaranteed.The coustomer care representatives are trained to do what are available at the branch like chequ