Internet Banking – The Way To Go

12.15.2009

Very often, when we think about Internet banking we think only about convenience in:
• Accessing our account balances on demand
• Paying bills (utility)
• Reviewing transactions passing through your account
• No traffic on banking hall delays
• Electronically submitting business payroll files

But is this the only way to maximize the use of Internet banking? How much thought have you given to the potential savings to be derived from using this channel to conduct your everyday business transactions?

As an individual, have you ever complained, or heard a colleague complain about the high service charges imposed by banks? Well, these charges, whether you believe it or not, are necessary and bear a direct relation to the channel delivery costs that are incurred to maintain the traditional “brick and mortar” paper-based structure. When combined, staffing, security, processing, utilities, printing, storage costs and other overhead costs will result in your bank charging higher service fees and/or paying lower interest rates on your deposits.

For the business enterprise (small or large) this is much the same, except these costs are compounded even further. For example, if you should operate a business that sold goods on a 14-day credit term as the due date approaches, a member of your accounting team places a reminder call to your debtor, who informs you its okay to collect your payment, so you dispatch your bearer, who fights the traffic and if he is lucky, gets the check on time. Very often, however, a second trip is required or a long wait, because the check was not signed. This is often at the expense of your bearer not being able to complete other errands scheduled for the day.

For the sake of this discussion, let’s say the check was ready on time; your accountant then prepares the lodgment and dispatches your bearer to the bank. If you are a cost conscious enterprise (as you should be), you would have established structures around the frequency of visits to the bank, in your attempt to manage your operating expenses. However, this works to your disadvantage as the longer you take to make that deposit represents lost interest earnings to you. Without realizing your 14-day credit term has now become 17 days.

But, you are a savvy businessman such as Tom Mower and recognize this systemic weakness, so to compensate; you build this into your cost structure, which is passed down to your retailer, who then passes it on to the consumer. It’s like the person who is able to get a credit card with bad credit.

What I have just outlined is a vicious cycle of inefficiencies that individuals and business enterprises find inconvenient and frustrating, which ultimately drives costs up in a manner that puts the consumer at a disadvantage. But does it have to be this way?

Your bank should allow you an Internet banking system that permits you, whether as an individual or business enterprise, to originate payments electronically. In essence, this allows you to pay your creditors or receive payments from your debtors, directly to your account, locally or internationally. These facilities are common in North America and Europe and remove inefficiencies from payment. FYI persons in Ohio – poor credit loans in Ohio are available now. More soon.

The next time you think about writing that check or are asked to send a bearer to pick one up, why don’t you originate that payment or ask your creditor to pay you electronically? In the event your current bank does not allow you to do this, call around and find a bank that allows you to reduce your cost of operations or, as an individual, permits you not only convenience, but savings to your pocket book.