FIGURE 3-5 An on-line point-of-sale network for retailers.
which transmit and process the funds-related transactions of customers. EFT systems/networks differ from traditional banking systems in that the transfers of funds are handled electronically rather than by means of paper checks. Customers can not only make deposits and withdrawals electronically but can also have their paychecks transferred directly to the bank via direct deposits.
The transactions accommodated by EFT systems/networks can be made via terminals located at the teller windows of a bank. Alternatively, customers may use ATMs (automated teller machines) at bank locations or at supermarkets and convenience stores. Accessing the system via an ATM requires the depositor to insert a bank card and to key in a PIN (personal identification number); these precautions provide considerable security against access by unauthorized persons.
ELECTRONIC DATA INTERCHANGE SYSTEMS/NETWORKS
An electronic data Interchange (EDI) system/network facilitates the near in-
stantaneous interchange of business transaction information from the computer systerri-of one firm to the computer system of another. The parties involved in the exchanges are called trading partners and include distributors, factories, and sup-
pliers. One model of the EDI form Of e-commerce that has been used by thou-
sands of large companies for decades relies on private network providers, called value-added networks (VAN). VANs furnish communications services and act as clear-
inghouses for the trading partners by providing electronic mailboxes and transla-
tion software that enable participants to store and retrieve the EDI files or messages. VANs are complex and costly to develop but are still used by big firms because they provide a secure means of coding and translating one firm's paper documents into standardized electronic business forms that can be read by its