Technology affects every aspect of peoples lives from the way they shop to the way they entertain themselves. It is not surprising that increasing technology has also changed the way people bank. Gone are the days when customers had to hop in their cars and drive down to the bank to handle a financial transaction. Ebanking has served to make banking services easy and accessible to everyone. There are several distinct advantages and some disadvantages to using ebanking services.
The beginnings
Chase and Citibank were two of the first big financial institutions in the United States to offer ebanking to their customers. The early system consisted of a terminal and keyboard attached to a TV that was first tried in the 80s. However, this, and early videotex system, never had the convenience to become popular, unlike the e-banking of today and its possibilities.
Ease of use
Almost any transaction (and sometimes more) that can be handled for a customer in a brick and mortar banking institution can also be handled by the customer by using ebanking services and accessing his account online. Customers who bank online do not have to wait in lines to be serviced by a bank teller. Ebanking customers can pay bills online and save on transportation and postage costs. With some banks, customers can even open an account online, although some forms may need to be mailed.
The advantages of ebanking are numerous. Account inquiries, transfers, stop payments, and many other services can all be handling online. ATMs are conveniently located and accessible to customers to make withdrawals or deposits to their accounts twenty-four hours a day. Customers can also use online banking services to schedule pre-authorized payments to take care of their bills. This is a convenient and way to make sure bills are paid on time and perhaps the single most popular feature of ebanking. Once the payee is set up, future payments can be made automatically or with a few clicks
With paycheck deposited electronically and the ability to do virtually everything to include transferring money between accounts online, there is no reason to have to visit a bank for normal transactions. In addition, there is less likelihood of error since the customers are doing things directly. Finally, account information can be downloaded error free into financial and tax software when needed.
One aspect of ebanking that makes it even more convenient for customers is the ability to gain access to account information and make transactions using their cell phones. Customers set their own schedules with ebanking and do not have to worry about making transactions during banking hours. These services are only likely to grow as the technology advances.
Buying power
By using a debit or ATM card at point of sale or POS terminals, customers can make purchases without having to write a check. The amount is automatically deducted from the customer’s checking account. Some transactions require that the customer input a PIN number while others do not. It depends on whether the purchase is made as a debit or credit transaction. Either way, the purchase amount will be deducted from the customer’s checking account in the end. Many banks offer rewards programs for using debit cards to make purchases where customers accumulate points. These points can be used to purchase items offered through the program, for discounts at many hotels and restaurants, or refunded to the customer at a specific point in time, usually once yearly.
Fees
Many ebanking services are free at most banks but there is a fee to gain access to and use some services. Each bank has their own schedule of fees for ebanking services. Some banks charge a fee for funds transfers and stop payment requests. In addition, using an ATM from another bank may require additional fees to use the service. There may also be limits to the number of free ATM transactions that can be conducted during the statement period. After the free limit of transactions is reached, customers will be charged for any additional ATM transactions. While most retail stores allow customers to use ATM or debit cards for no additional fees, there are still some stores that charge a fee for making a purchase with a banking card. These fees can run anywhere from a few cents to as much as $2 per transaction.
Security issues
Ebanking is for the most part, secure, but there are some security issues customers should be aware of before deciding to conduct their banking online. Most ebanking sites have encrypted and secure connections, and banks are required to refund stolen funds if they are reported within 60 days. However, there are scams to include phishing schemes in which fake sites that pretend to be the bank are set up to steal people’s login information. Be careful to use the bank’s site only and never login from possible spam emails or from a public computer. Only open accounts with reputable banks that have good security features. Finally, monitor the account and report any suspected fraud immediately.
Customer service
There are some customer service issues with ebanking. If there is a question about a transaction or another issue with an account, customers may have to resort to using an automated telephone banking system or submit an emailed question about their account. The personal face-to-face customer service aspect is missing and is one disadvantage to using ebanking services. However, even customers who use ebanking can still go to their local bank and speak to a representative about any issues or concerns they may be having with their account.
