Page 239 - DCOM208_BANKING_THEORY_AND_PRACTICE

Banking Theory and Practice

Notes 2. Site Disruption: A technical fault could cause the banks website to go offline for a certain
period of time, which can result in problems for you and your business. Routine site
maintenance also occurs, although this normally takes place during off-peak hours.
3. User Apprehension: Some people may not feel comfortable with the idea of placing critical
financial information into an online account, or may be worried about using the Internet.

4. Accessibility: If the business is located in a rural or remote area, the internet options may
be limited. Depending on the type of business, conducting transactions may seem difficult.

Did u know? Stanford Federal Credit Union was the first who offered online internet
banking services to all of its members in 1994.

Self Assessment

Fill in the blanks:
14. E-banking is the ................... delivery of new and traditional banking products and services
directly to customers.

15. .......................... of your bank account is the most important factor in online banking.

14.8 E-Cheques

E-cheques or electronic cheques are designed to accommodate the many individuals and entities
that might prefer to pay on credit or through some mechanism other than cash. Once registered,
a buyer can then contact sellers of goods and services. To complete a transaction, the buyer sends
a cheque to the seller for a certain amount of money. These cheques may be sent using email or
other methods. The electronic cheques are modelled on paper checks, except that they are initiated
electronically.

Example: They use digital signatures for signing and require the use of digital certificates
to certify the payer, the payer’s bank and bank account.
They are delivered either by direct transmission using telephone lines or by public networks
such as internet.
Because the cheque is in an electronic format, it can be processed in fewer steps and has more
security features than a standard paper cheque. Security features provided by electronic cheques
include authentication, public key cryptography, digital signatures and encryption, etc.

Benefits of E-Cheques

Following are the various benefits of e-cheques:
1. Well suited for clearing micro payments.
2. They create float which is an important requirement of commerce.

3. They can serve corporate markets. Firms can use them in more cost-effective manner.

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