Electronic Banking

Form of banking where funds are transferred through an exchange of electronic signals between financial institutions, rather than an exchange of cash, checks, or other negotiable instruments. The ownership of funds and transfers of funds between financial institutions are recorded on computer systems connected by telephone lines. Customer identification is by access code, such as a password or Personal Identification Number instead of a signature on a check or other physical document. Electronic banking systems can be low-dollar retail payment systems, such as Automated Teller Machine networks and Point-Of-Sale systems; and large-dollar interbank payment systems, such as the Federal Reserve Fed Wire or the Clearing House Interbank Payments System operated by the New York Clearing House Association. See also Automated Clearing House; Book Entry Security; Electronic Funds Transfer; Wire Transfer.