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Traditional banking has expanded its services to include access from homes and offices via the Internet.
Two major formats are the extension of local retail bank's services to
include a personal pc-based interface, and the online, or virtual bank.
Most
community banks and other consumer-oriented financial institutions now
allow their customers to log into the bank's website. Using their
unique user name and password, bank customers can access their accounts online,
move money between accounts, make deposits and withdrawals, and pay
bills. These banks also issue bankcards, or debit cards, that are used
in the same manner as credit cards but withdraw funds directly from
existing bank accounts just as checks do, while taking little or no
time to clear.
Software packages such as Microsoft's
Money,
Intuit's Quicken, and Kiplinger's Simply Money allow individuals to
maintain detailed budget spreadsheets, pay bills online, and interface
directly with their bank account for automatic updates. Add-on modules
or product upgrades extend abilities to online tax filing, stock
trading, and currency exchanges.
Some financial institutions are almost
entirely Internet based,
making them virtual banks. The advent of Internet sales and online
stores created a need for a web-based interface with financial
services. PayPal is an example of one such Internet banking solution.
While it is not technically a bank, PayPal adheres to banking
regulations and offers many of the same features as a traditional bank.
You can deposit and withdraw money, bill for goods and services, use
its debit card in stores, and it even issues its own credit card.
E-commerce,
short for electronic commerce, evolved from industrial web use.
Industries began using the speed and accuracy of email and more secure
encrypted data packets to place wholesale orders, send and receive
funds, and coordinate production and reorder schedules. As the Internet
became more consumer-oriented, these practices included online retail
shopping, credit card and electronic check, or e-check, processing, and
other forms of commerce such as small private trade as epitomized by
eBay.
Internet based stock trading has evolved to allow an individual to buy
and sell stocks instantly
from their personal computer. Companies that offer these services
online also maintain one or more holding accounts for funds, or link to
bank accounts that may pay interest or dividends on rolling balances.
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