I don’t bank online. And until recently, I didn’t know a lot of people whodid. But lately, people who bank online are everywhere and they’re notafraid to admit it.
Not only that, they are, to a person, happy customers.
When someone gives you, completely unsolicited, a glowingreview of online banking, you know those bankers must be doing something right.
And that’s good news for an industry that everyone thought would have taken off long before now.
Trust Me
Recently, I heard two testimonials about Web banking in as many days. Notexactly a landslide, it’s true, but they came from people in completely different walks of life and regions of the country.
For a moment during each conversation, I felt each was trying to convert me. Like they could nudge me toward the light and I would be saved.
“I haven’t bought stamps in six months,” one person told me.
I didn’t tell him that I kind of like stamps, especially now that you don’t have to lickthem any more.
Into the Unknown
The other person had a more practical approach: “Paper bills get lost in my apartment.”
I believed these testimonials because they came with reservations.
“The first time you do it,” one person said, “you don’t know if it (the payment) got there. You half expect a guy to show up at your door with a wrench and shut offyour gas service.”
But of course, that doesn’t happen. Or at least my friends didn’t tell me aboutthose kinds of incidents.
Bricks of Gold
Both of my Web banking friends also use brick-and-mortar banks that havebuilt up significant online services. In other words, they are shunningpure-play Internet banks, just like almost everyone else in every other industry.
What’s interesting is that neither person is particularly adventurous whenit comes to technology. Neither owns a PDA. Neither uses a cell phone to surf the Web. But they broke through the worry barrier on onlinebanking, and they seem to be glad they did.
This, of course, is pleasant to hear for online banking, which has been waiting for its time to come for a long while now. As the old saying goes, word of mouth is the best form of advertising there is.
One by Each
It’s not the fastest, however. And people seem to be adopting Web banking one at a time, not in big bunches. If Web-only banks needed more bad news, there it is: Banks that can hold on the longest will emerge victorious.
If you don’t have a stream of customers from your brick-and-mortar and ATM machines keeping you in the green in the short term, you might not be around long enough to collect a sizeable share of the online customer base.
By now, we’re used to seeing pure plays get waylaid by the bullies from the real world. But in the banking world, how surprising a development is that, really?
Bad Timing
If Web banks had another two or three years of deep-pocketed investors andno worries about profits, maybe they could have wooed enough customers tomake their existence more than a blip on the radar screen.
But when you’re talking about taking someone’s money, holding on tosomeone’s money, doling it out when they say to, you’re talking about anawesome responsibility. It’s no surprise that people weren’t willing tohand that responsibility over to a faceless, nameless person on the otherend of an Internet connection.
Before long, Web-only banks will be extinct, another symbol of what the Netwas supposed to be capable of eliminated.
Brick-and-click Web banking will continue to pick up steam, however, one customer at a time. And that’s not a bad consolation prize.
What do you think? Let’s talk about it.
Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.
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I would take exception to online bill paying. A number of merchants have bill paying on their site, which is mainly credit card companies and Allstate. You put in check routing and account into their database. You then click on the AM ount you want to pay and they cause an ACH transaction to be posted on your check account. They give you a confirmation you can print out.
There is a lot of merchants I call up and give my debit card number and the bill is paid. My mortgage with GMAC mortgage allows for payment over the Internet on their website. This allows people not to worry about their payment being recorded on their account and no late charges. The services I have mentioned is free and not worry about the merchant getting the payment. I AM down to about 7 stamps a month on bills to be paid.
Why should I use the service when I could get it for free and can bring closer to the due date? I don’t putting five days before it is due. It will die a natural death. In the case of GMAC the service is so popular that they are thinking of closing some of their payment centers and some of the credit card companies are thinking about reduction of the payment center as people are paying their bills on their web site.
I advise you think what the people will do. More companies will put bill paying for their customers on their web site as they see the saving accomplished by their competitors.
I have been banking online for quite some time now, and I love every bit of it! I have interest-bearing checking, free online bill-pay, one-stop account consolidation (so I can see my brick-and-mortar accounts, along with my credit card accounts) all in one place. And the nice thing about this is the time it saves me every month.
I know there are a lot of places out there where you can set up automatic payments to be pulled directly from your account, or where you can call and have them deduct it from a credit/debit card, but that takes time to make the call or go online to various sites to make the payment. I know with most credit card sites that allow online payment, they still say to process it 5 days in advance of the due date, which saves you nothing.
And, once you’ve been paying online for a while, you find out exactly how long things take to get to their destination, and can work the system, much like you would with checks.
I would suggest to anyone to check out NetBank.Com as a model for what an online bank should be.
Good luck!
-Tom
One big misconception about bill pay is the due dates. There are two types of online bill pay. One is the crappy one that most banks have (NetBank, AmericanExpress, SFNB, FirstBank and most Brick and Mortars). These banks make you say the date you want them to send the bill and then they deduct the money from your account. This is crap! They make a ton of money doing this because they carry the float on your money. If a bank does this, switch!
In the other type of bill pay, you specify when you want the bill to arrive. The money doesn’t come out of your account until the bill is paid. Wingspan did this, but they have been rolled back into their parent (I AM still upset about this). The only other bank I’ve been able to find that does this is E*Trade bank. I just moved all my money over to them, and I’ll let you know how it goes. Until banks start implementing this policy, screw em! Don’t use bill pay. I AM a big fan of online banking though – high interest rates, good service, low/no fees.
Yeah, that’s the one thing I don’t like about Netbank, but I’m willing to live with it for now. And, for the most part, my payments are arriving within 2 days of the day I select to send the payment. If the float keeps it free to me, I’m fine with that. I don’t keep a major balance in this account, so it wouldn’t make that much of a difference.