A Free Educational Resource Created by Carnegie Mellon University to Empower You to Secure Your Part of Cyberspace


Activities such as online banking, online money transfers and online trading

Under the category of e-money we include activities such as online banking, online money transfers and online trading. E-money differs from e-commerce in that it describes the online management of money, not just a way to make purchases. E-money includes banking, money transfers and online trading.

Banking: Nearly all banks now offer online services so you can access and manage your account online. These services are normally performed through a secure Web site protected by complex encryption algorithms, such as the HTTPS protocol. A bank might provide the following online services:

  • Account balance review: This service lets you log in and see how much money is in your account. The balance is usually updated as soon as the bank receives a deposit or payment request.
  • Account transfer: This service lets you transfer money between your accounts and third-party accounts. Some banks review all transactions before actually performing them, while others perform transfers immediately.
  • Online payments or online checks: This service lets you send a payment to someone by filling out an online check. This is particularly useful for paying regular bills, such as utilities and rent. In such cases, the bank often has an agreement with the payee (e.g., the cable company) so that the money is directly deposited to their account and they are notified of the transaction.
  • Simple investments: Some banks let you buy CDs (certificates of deposit) and make other simple financial investments online.
  • Payroll: Businesses use online banking for direct deposit of employee wages. Faxes no longer need to be sent to the bank with the entire payroll, and physical checks do not need to be sent to employees.

In addition to these services, you can buy financial software, such as Intuit's Quicken, Quickbooks, or Microsoft Money, that can be connected directly to your bank through the Internet. Some users find these applications helpful for managing your finances, but they require caution because they store all your financial information on your computer, which could then be accessed by intruders.

Money transfers: With the growth of eBay and online auctions, people have developed a need for a way to securely make payments to each other online. For that reason there are companies such as Paypal dedicated to performing online transfers of money between two or more parties. By opening a free account with Paypal, you can send money to anybody as long as you know his email address. The advantage of this service is that an online vendor does not need to have a complex credit card processing system; all he needs is an email address and a Paypal account. It also means that you don't have to give your credit card number to a stranger; instead, Paypal acts as a secure third party facilitating the transaction.

Online Trading: These days, anybody who wants to be active in the stock market can trade online by using an Internet broker or specialized software. You can even trade stocks using a mobile device, such as a handheld computer or cell phone. One of the biggest online brokers is E*TRADE.

E-money: security threats & prevention tips

  • Data Theft The unauthorized taking or interception of computer-based information
  • Intrusion Accessing a computer without permission
  • Spyware Software that sends information from your computer to a third party without your consent

E-money: common problems and solutions

Your browser froze during a money transfer.

This problem is likely due to either an error with your bank's Web site or problems with your network. Although tempting, avoid clicking the Refresh or Back buttons on your browser or the Submit Payment button again. This may cause the transaction to occur twice because sometimes the transaction goes through, but the network connectivity prevents you from getting confirmation.

To check your connection to the network, try opening a different Web site. If you can connect, the error lies with the bank's Web site. If on the other hand, you cannot connect, it indicates traffic congestion or errors on the network, and you should wait until the network comes back on. In either case, close the browser window, and then open the browser again and navigate to the Web site. If the Web site shows you an error, you know that the Web site is down or having difficulties.

Once you are able to connect to the bank's Web site again, login and check to see if your transaction has gone through. If the transaction has gone through, you may want to call the retailer to make sure the transaction has been processed. It may be a good idea to double check with the recepient in any case, just to make sure.

A rebate has not come in a reasonable timeframe.

Usually, you can call the company's customer service or rebate center on their toll free number. However, it is important to know that rebates are structured so that most shoppers are dissuaded from claiming them, with requirements such as instructions in small print, the use of many different labels, and needing certain receipts. Online, many retailers simply display the receipt in your browser window, which makes it easy for the shopper to close and forget about.

If you have a printer, print out multiple copies of the receipt. If not, save the webpage on your hard drive by clicking on Save As or Save in your browser menu. Keep in mind though, that some web pages contain images, and so when this page is saved, the images are not saved, and the formatting of the receipt/label required may be not accurate. If you have Adobe Acrobat  or Adobe Acrobat PDF Writer , try saving the page as a PDF to preserve the formatting and images.

For another option, save the page as an image by pressing the Print Screen (often "PrtScn") key on your keyboard. Then, open an image editor, such as Paint, and hit Edit > Paste to paste the "screenshot" into a new file. You can save this image for your records.

In the future, you may want to choose retailers that allow you to submit your rebates online. You fill out forms online, and the rebate company pulls all the required information from your receipt details, which avoids the trouble of mailing out paperwork. Usually, these online centers update you on your rebate status.

Connect Safely from Different Places


Handling your business' money is a sensitive task, since both your company's money and your job can be at risk. Intrusions, spyware and data theft are all risks for businesses.

When performing bank transactions from work, remember that your computer is usually controlled by a system administrator who filters all traffic. If you have any questions, you can turn to him or her for help.

Money laundering, illegal investments and online gambling are illegal and unethical and can put your company's reputation at risk, as well as your own.


Nearly all banks now offer online services so you can access and manage your account online. However, some banking Web sites may not have the proper format for you to log in from a mobile device, even if your mobile device has Internet connectivity.

There are special financial applications, such as Pocket Quicken or Microsoft Money for Pocket PC, that you can install on your mobile device to help you track your expenses. When you synchronize your PDA, your financial information is transferred to your home computer.

Now that you can use your PDA or mobile phone to access your bank online, hackers and thieves have a new target for their attacks. Password and data theft is a major threat when performing e-money activities on your mobile device.

On the road

With advances in wireless Internet connections, you can now get on the Internet from almost anywhere. You can check online bank statements, buy stock and send online payments via Paypal from a hotel room, a coffeehouse or even an airport. It is considerably more dangerous, however, to perform e-money transactions away from home.

For example, if you do online banking from a public machine, you might leave a record of your account information. Or, someone could track your activity using a keylogger. Likewise, if you use your laptop to connect to a public network at a coffee shop or bookstore, someone else connected to that same network can easily listen to that traffic. That means he or she can take note of your passwords, credit card numbers and any other information that you are sending. At home, you can control who is using your network; in a public place, you cannot.

Legal Issues

There are laws, including the Electronic Fund Transfer Act , that protect you from harm when managing your money online. Other laws govern such things as money laundering, illegal investments, and even online gambling.

Paypal  usually operates by linking your bank account with your Paypal account. You are therefore authorizing Paypal to perform bank withdrawals whenever you tell them to. This may sound dangerous, but you are protected by Paypal's User Agreement  as long as you use the money for non-fraudulent activities. If you use Paypal for illegal activity, such as money laundering or gambling, you can be fined by the service and have your account terminated.

Privacy Issues

E-money transactions require strong privacy agreements to protect your finances. These documents explicitly state how your financial information will be used and who it will be shared with. For an example of a good privacy agreement, see Paypal's Privacy Policy .

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