what is online banking and disadvantage of ATM? what is EMT?

 ONLINE BANKING

The six main channels used for the delivery of banking services. The channels are: 

1. Branch Banking 2. Mobile Banking 3. ATM Channel of Banking 4. Mobile Banking or Phone Banking, Tele-Banking 5. PC Banking, y, Self Service Banking 6. Internet Banking, Online Banking, E-Banking.

 Branch Banking:

A branch of a bank is a place, office, unit where all banking operations are done under a single roof. People go to the branch for their banking requirements. This is the most popular and therefore most important channel of the Bank.

It is a place where customers can visit personally and can make use of different kinds of services and banking products in one place. In case of any difficulty, the customers are able to seek to advise of the bank staff, remove their all doubts, get their all clarifications about banking operations.

Mobile Banking:

In the era of stiff competition, every bank wants to reach to maximum number of people to enhance their customer base. In this process, some of the banks have started Mobile banking services. A mobile van is equipped with necessary equipment’s and a few staff members are assigned the duty on such vans.

These vans roam about the local area in order to provide door-to-door service to their customers. But in such a system very limited banking services are provided. The main services include receipt and payment of cash only. Some ancillary services like balance enquiry, cheque collection are also provided.

ATM Channel of Banking:

In simple words, The ATM is known as Automated Teller Machine. Before the introduction of ATMs in 80’s the people were familiar with one teller only. A human being sitting behind the cash counter and making cash payments or receiving cash from customers. For cash transactions, one was required to go to the teller physically and that too within the working hours of the bank. The invention of the ATM has changed the entire scenario

 

With the advancement of technology At the present time ATMs have been equipped with multitask technology and can perform the following services:

i) Cash withdrawal,

ii) Cash Depositsiii) Balance Enquiry,

iv) Providing mini statements,  

v) Deposit cheques, and 

vi) Fund Transfers.

Some more advance ATMs provides services like paying utility bills, Recharging Mobile services, Cheque Book requests. Etc.

The services from ATM can be availed only after one applies with the bank a request to issue him an ATM card. On receiving the request bank issues an ATM Card. This card carries a Personal Identification Number popularly known as (PIN). This number is generated by the computers of the bank at random. Only the customer and nobody else knows this number.

This number in inscribed on a magnetic strip along with the Account number of the customer from which the customer would like to transact his banking transactions. This magnetic strip is in fact data storage device about the particular customer and is a secret one. While using the ATM card with a magnetic strip fixed on its back works as a tool to access the account to be operated

Mobile Banking or Phone Banking, Tele-Banking:

and making cash payments or receiving cash from customers. For cash transactions, one was required to go to the teller physically and that too within the working hours of the bank. The invention of the ATM has changed the entire scenario

 

With the advancement of technology At the present time ATMs have been equipped with multitask technology and can perform the following services:

i) Cash withdrawal,

ii) Cash Depositsiii) Balance Enquiry,

iv) Providing mini statements,  

v) Deposit cheques, and 

vi) Fund Transfers.

Some more advance ATMs provides services like paying utility bills, Recharging Mobile services, Cheque Book requests. Etc.

The services from ATM can be availed only after one applies with the bank a request to issue him an ATM card. On receiving the request bank issues an ATM Card. This card carries a Personal Identification Number popularly known as (PIN). This number is generated by the computers of the bank at random. Only the customer and nobody else knows this number.

This number in inscribed on a magnetic strip along with the Account number of the customer from which the customer would like to transact his banking transactions. This magnetic the strip is in fact data storage devise about the particular customer and is secret one. While using the ATM card with a magnetic strip fixed on its back works as a tool to access the account to be operated

Services provided through Phone banking is limited like:

1. Asking for account balance,

2. Status of a cheque deposited for collection,

3. Request for a cheque book or statement of account,

4. Record stop payments, and 

5. Information on bank products.

Off course Enquiries relating to banking services are also attended.

In case of Mobile banking a set of text messages or SMS that can be used. Bank balance, cheque status, the status of loan applications can be obtained through this system. As already stated the banks send SMS on mobile to keep their customers informed about any type of transaction in their accounts.

PC Banking, y, Self Service Banking:

Internet banking as known today has gone through many phases of development. In each phase, it was known by different names. In its initial stage in the early 80s it was known as Home Banking means the banking transactions that can be done while sitting at home. During the contemporary period it was also known as Self Service banking.

Initially, the customers were able to perform some routine banking functions at home For availing of home banking services telephone or cable connections were required and transactions were performed with the help of a terminal, keyboard, and a monitor (TV or PC).

With the help of this facility, customers were able to access bank services like the inquiry of account balance, moving funds between accounts, payment of bills, and buy/sell investments or securities. All this was done by the customers themselves on their own system while sitting home, office, or work place.

Internet Banking, Online Banking, E-Banking:

 

In India now most of the banks have their own websites for the purpose of offering banking services on the internet. The Reserve Bank of India has also issued guidelines for internet banking which all the banks are required to follow. The multinational and private sector banks have been successful in setting up internet banking but some Public Sector banks had been lagging behind because of their inherent difficulties.

Most of the public sector banks have a very large network of their branches and a good number of them are located in far-flung remote areas and they face a lack of connectivity. These banks have a very large base of customers and include illiterate customers also. Some are still following old dated and traditional types of application methods and are not flexible for change.

ATM

What Is an Automated Teller Machine (ATM)?

An automated teller machine (ATM) is an electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller. Anyone with a credit card or debit card  can access cash at most ATMs.

ATMs are convenient, allowing consumers to perform quick self-service transactions such as deposits, cash withdrawals, bill payments, and transfers between accounts. Fees are commonly charged for cash withdrawals by the bank where the account is located, by the operator of ATM, or by both. Some or all of these fees can be avoided by using an ATM operated directly by the bank that holds the account.

ATMs are known in different parts of the world as automated bank machines (ABM) or cash machines.

Understanding Automated Teller Machines (ATMs)

The first ATM appeared at a branch of Barclay's Bank in London in 1967, although there are reports of a cash dispenser in use in Japan in the mid-1960s. The interbank communications networks that allowed a consumer to use one bank's card at another bank's ATM came later, in the 1970s.

Within a few years, ATMs had spread around the globe, securing a presence in every major country. They now can be found even in tiny island nations such as Kiribati and the Federated States of Micronesia.

Although the design of each ATM is different, they all contain the same basic parts:

• Card reader: This part reads the chip on the front of the card or the magnetic stripe on the back of the card.
• Keypad: The keypad is used by the customer to input information, including personal identification number (PIN), the type of transaction required, and the amount of the transaction.
• Cash dispenser: Bills are dispensed through a slot in the machine, which is connected to a safe at the bottom of the machine.
• Printer: If required, consumers can request receipts that are printed here. The receipt records the type of transaction, the amount, and the account balance.
• Screen: The ATM issues prompts that guide the consumer through the process of executing the transaction. Information is also transmitted on the screen, such as account information and balances.

Full-service machines now often have slots for depositing paper checks.

ADVANTAGES OF ATM

·       Always Provide Services

The first pros in the list of advantages of an ATM is that it is always available to use. We can use it 24/7 whenever we need the cash.

·       Reduce the workload

Second good point about the automated teller machine reduces the workload from workers and makes auto transactions.

·       Fast Transaction

Best thing about ATMs are the fastest way of a transaction between account holders and machines. No need to wait outside the bank or inside the bank.

·       Very Useful Machine to Traveler

You are the traveler and out of cash just bring out your debit or credit card and swipe it. Money is in your hand within a few seconds, it’s all just because of advantages of credit cards.

·       New Currency Notes

Use an ATM and withdraw the fresh and new currency notes. I think new notes are the best gift for little kids.

·       Privacy in Transaction

This is the privacy of your account and privacy from other people. Using an ATM only you know the actual amount of your bank statement. Because there is nobody inside with you in the cabin.

·       ATM is Convenience

In this age of modern technology, internet banking ATMs are available in all the convenience places such as Air Ports, Railway Stations, Bus Stops and many more places like that.

·       ATM is Time Saving Pros

One of the best benefits I found in this list of advantages of automated teller machines are time saving. It saves your time and other people’s time.

·       Low Transaction Cost Pros

The last advantage of ATMs I am going to share with you is the low transaction cost. If you are using the same machine of the bank where you have your bank the account then it will never deduct any extra amount. 

 

 DISADVANTAGES OF ATM

·       Not available in Rural Areas

The first drawback What I found about automated teller machines is that they are not available in rural areas and not available in the villages.

·       Charges Fee Cons

If you are using the machine of the other banks or in another country so it will deduct a little bit of a high fee for withdrawing money.

·       Capture ATM Card

This point is done with me in my real life, when I withdraw money and the machine captured my debit card and also deducted my money and never received the money. It is the long story of what happened to me after that. 

·       Cash Withdrawal Limitation

I have now three cards and all the cards have different limitations of withdrawing the money. 

·       Frauds and Hacking Cons

Another con of automated teller machines in the list of disadvantages of ATM. is the frauds and hacking. You must keep your card number and pin code secret and never tell anybody. There are a lot of cases on the internet of hackers and frauds using your card data.

·       Offline / System Down

Disadvantages of ATM are not end there another point is limitations of system buy or system down and sometimes show the machine is not for use now.

·       Forgot the PIN

Forgot your PIN of your card, you can’t use an ATM. Must reset your PIN and then you are able to use it.

·       Run out of Cash Cons

In the government vacations the bank staff is not on duty. Using too many ATMs by the people runs it out of cash.

·       Risk of Robbery

Using the automated teller machine at night time you must be careful. Because there are no police and other security staff at that time to protect you. Thieves can rob you and take your money. 

EFT

Electronic Funds Transfer (EFT) is a system of transferring money from one bank account directly to another without any paper money changing hands. One of the most widely-used EFT programs are direct deposit, through which payroll is deposited straight into an employee's bank account. However, EFT refers to any transfer of funds initiated through an electronic terminal, including credit card, ATM, Fedwire , and point-of-sale (POS) transactions. It is used for both credit transfers, such as payroll payments, and for debit transfers, such as mortgage payments.

How EFT works

Transactions are processed by the bank through the Automated Clearing House (ACH) network, the secure transfer a system that connects all U.S. financial institutions. For payments, funds are transferred electronically from one bank account to the billing company's bank, usually less than a day after the scheduled payment date.

The ACH Network operates as a batch processing system. Financial institutions accumulate ACH transactions throughout the day, which are handled via batch processing later on. According to NACHA, which creates payment and financial messaging rules and standards, the ACH Network handles 24 billion EFTs each year, accounting for more than $41 trillion transferred. The ACH Network is one of the largest and most reliable payment systems in the world, according to the association.

To complete an EFT, the receiving party must provide the following information:

·        The name of the bank receiving funds

·        The type of account receiving funds (e.g., checking or savings)

·        The bank’s ABA routing number

·        The recipient’s account number

The growing popularity of EFT for online bill payment is paving the way for paperless transactions where checks, stamps, envelopes and paper bills are obsolete. The benefits of EFT include reduced administrative costs, increased efficiency, simplified bookkeeping, and greater security. However, the number of companies who send and receive bills through the Internet is still relatively small.

Types of EFTs

The most common types of EFTs include:

·        Direct deposit: Enables businesses to pay employees. During the employee onboarding process, new employees typically specify the financial institution to receive the direct deposit payments.

·        Wire transfers: Used for non-regular payments, such as the down payment on a house.

·        Automated Teller Machines (ATMs): Allows cash withdrawals and deposits, fund transfers, and checking of account balances at multiple locations, such as branch locations, retail stores, shopping malls and airports.

·        Debit cards: Allows users to pay for transactions and have those funds were deducted from the account linked to the card.

·        Pay-by-phone systems: Allows users to pay bills or transfer money over the phone.

·        Online banking: Available via a personal computer, tablet, or smartphone. Using online banking, users can access accounts to make payments, transfer funds and check balances.

TELE BANKING

Telebanking is the process of handling bank accounts over the phone. It is also referred to as telephone banking. This service is commonly offered by banks, credit unions and credit card companies. There are often fees associated with using this service.

Telephone banking is a service provided by a bank or other financial institution, that enables customers to perform a range of financial transactions over the telephone, without the need to visit a bank branch or automated teller machine. Telephone banking times are usually longer than branch opening times, and some financial institutions offer the service on a 24-hour basis. Most financial institutions have restrictions on which accounts may be accessed through telephone banking, as well as a limit on the amount that can be transacted.

Features of Telebanking

v Check account balance .

v Enquire on the status of cheques.

v Transfer funds between accounts including third party fund transfer.

v Open time deposit accounts .

v Request for cheque book or statement

wELECTRONIC MONEY TRANSFER

What Is Electronic Money?

·        Electronic money refers to money that exists in banking computer systems that may be used to facilitate electronic transactions. Although its value is backed by fiat currency and may, therefore, be exchanged into a physical, tangible form, electronic money is primarily used for electronic transactions due to the sheer convenience of this methodology.

·        Online money transfer is where the old-fashioned concept of wiring money converges with the modern technology of electronic funds transfer, or EFT. You probably use EFT all the time -- it's simply a completely electronic way of transferring money from one bank account to another bank account. Data is exchanged; paper money is not. Using debit card at a store transfers money from your checking account into the store's banking account. Direct deposit payroll moves money from your employer's bank account into yours. Both of these transactions are examples of EFT, and so is online money transfer.

But online money transfer is distinctly different from EFT -- this is not about a way to pay your bills over the Internet. Online money transfer is the modern-day equivalent of wiring money: You can send someone money instantaneously simply by transferring money (or the data that represents that money) from you to another person. Usually involving little more than contact information -- such as cell phone number or e mail address -- for the sending and receiving parties tied to a bank account, online money transfer can be done for a small fee from a secure, Web-based service via any computer with Internet access. There's no need to go to a money wiring office, telegraph station or e