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Internet Savings Account
It used to be that when one thought about a bank, the first thing
that would pop into a person's head would be the building that
collects and later distributes money. This to most people of the
world is a bank. A solid structure where our money is kept. However,
as more and more people become inclined to study finance and
economics, we've come to perceive banks slightly different, as ideas
of The Federal Reserve and other such constructs emerge into our
conscience.
However, today even that paradigm is being challenged when we stop
to consider the internet savings account. This is a most unusual and
interesting concept. Yet what exactly is an internet savings
account? Basically it is nothing so esoteric or flamboyant, but
rather is simply a "go-between" for two real brick and mortar banks.
Nearly everyone has heard of Western Union and utilized its
services. A person simply goes to a store that has WU when one wants
to "send" money to someone, somewhere in the world (often on the
other side of the globe). Most places that service WU are grocery
stores or liquor stores or the relatively new "money lenders" that
wish that they were banks and act accordingly by making loans at
high interest rates.
What happens with Western Union is very similar to what happens with
an internet savings account. One end signals to the other end that
money has been paid into "the cache" or "the system" if you will.
This allows the WU on the other end of the world know that they can
safely give money to whoever is designated to receive it.
The one place where an internet savings account differs is that the
whole money system becomes even more abstract than with wiring and
receiving money. We say "abstract" as the operations seem to have
less and less to do with an actual physical bank. However, the truth
is that without actual banks the system of internet banking simply
would not stand in reality. When one has an account on an online
bank, this bank is in turn in communiqué with a bank on the sending
end and another on the receiving end. Simple, yes?
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