BEC - Banking and E-Commerce Module Overview

Banking and E-Commerce

Introduction

Money...we work all our lives for it, to put it in the bank, to save for retirement. Between the times that we begin to save money and retirement we hope that our money is working for us. In this module, we will begin to learn some of the basics of managing our money. Primarily, we must begin by understanding how negotiable instruments work. By learning the elements of negotiability, we come to an understanding of what it takes to make an instrument transferable. But, banking is changing. Could the day be coming when we do all of our banking virtually? Could your bank be as close as the cell phone in your hand? As the capability of doing business online grows, banks are positioning themselves to be a part of this virtual world. They are finding new ways to offer traditional banking services as well as exploring entirely new business possibilities. With these possibilities come new responsibilities for protecting customer privacy and information. What will the bank of the future look like? What services will it provide? How will banks protect consumer information? How do banks balance the need for customer privacy with the need to monitor transactions for illegal activity? All these questions will be explored in this module.

Essential Questions

What makes a document negotiable?
What are the differences and similarities between the types of deposit accounts provided by banks?
How does e-commerce affect banking practices?
How do banks address the legal aspects of e-commerce?
What new ethical issues are brought about through e-commerce?

Key Terms

Bearer Instrument text annotation indicator : a security that does not indicate the owner payable to whoever presents it

Bill of Exchange text annotation indicator : An unconditional order in writing to pay a certain sum of money to a named person

Cash Card text annotation indicator : a card issued by a bank, credit union or building society that can be used at an ATM

Credit Card text annotation indicator : card that may be used repeatedly to borrow money or buy products and services on a credit

Debit Card text annotation indicator : bank card that draws funds from a deposit account

Draft text annotation indicator : document ordering the payment of money drawn by one person or bank on another

Negotiability: Able to be transferred or assigned, in place of money, in the ordinary course of conducting business

Negotiable Instrument text annotation indicator : a specialized type of "contract" for the payment of money that is unconditional and capable of transfer by negotiation

Promissory Note text annotation indicator : a binding legal document that a borrower signs to obtain a loan

Smart Card text annotation indicator : credit card equipped with a small microprocessor which stores information about the card owner

Fraud text annotation indicator : intentional deception resulting in injury to another person

Endorsement text annotation indicator : a signature that validates something'

EFT text annotation indicator : Electronic Funds Transfer- Funds transferred electronically rather than by check or cash

Check 21 text annotation indicator : Check Clearing for the 21st Century Act legislation that allows faster processing of checks by financial institutions by allowing them to process images rather than physical pieces of paper. The law also allows the creation of substitute checks that are processed immediately.

Direct Deposit text annotation indicator : A method of payment which electronically credits your checking or savings account

Automatic Payments text annotation indicator : A standing order to pay a creditor

Automated Clearinghouses text annotation indicator : electronic network for financial transactions in the United States

CHIPS text annotation indicator : Clearing House Interbank Payment System

ECP text annotation indicator : An electronic record governed by check law

Commercial Paper text annotation indicator : An unsecured obligation issued by a corporation or bank to finance its short-term credit needs

UCC text annotation indicator : Uniform Commercial Code - A uniform law, adopted by some states, designed to simplify and modernize the consumer credit and usury laws, to further consumer understanding of the terms of credit

E-Commerce text annotation indicator : Sales, transactions, refunds, or any other business performed online

Browser text annotation indicator : software application for retrieving, presenting, and traversing information resources on the World Wide Web

Brick and Mortar text annotation indicator : retail shops with permanent physical locations

Click and Mortar text annotation indicator : a company integrates both offline (mortar) and online (clicks) presences

Cookies text annotation indicator : a small piece of text stored on a user\'s computer by a web browser

CRM text annotation indicator : Customer Relationship Management - e-business technologies to help companies to identify, select, acquire, develop, and retain profitable customers

Digital Cash text annotation indicator : receiver of the funds

Domain Name text annotation indicator : the one who signs the check

EDI text annotation indicator : the bank on which the check is written'

E-Mall text annotation indicator : payable on sight or demand

Hit text annotation indicator : payable at a specific time

Hub text annotation indicator : a sight draft that arises when credit is extended with the sale of goods

Issuing Bank text annotation indicator : The financial institution and member of Visa or MasterCard that holds contractual agreements with, and issues cards to, cardholders.

Merchant Account text annotation indicator : type of bank account that allows businesses to accept payments by debit or credit cards

XML text annotation indicator : Extensible Markup Language is a set of rules for encoding documents electronically

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