Checks Likely To Be Phased Out As Online Banking Thrives

06.17.2011

Checks may soon be a thing of the past, as this medium of payment is steadily being phased out in favor of quicker and less labor-intensive online banking. Undoubtedly for example, paying bills with checks is not as popular as it used to be, and worldwide, the bodies that monitor and regulate banking systems have been giving customers the opportunity to not have checks at all.

The truth is, these days, very few persons actually use checks, especially in more developed countries such as the USA, UK, Canada and Australia, and although its sad to say, many of the demographic (older individuals over the age of 60) that still hang on to the use of checks are fading (passing away) slowly but surely every year, make it inevitable that electronic/digital will triumph eventually.

From all angles, the check and other manual/paper forms of financial transactions are being replaced because of Internet banking and Internet-based transactions. A classic example is in the area of billing. e-billing software are rapidly replacing those manual/printed invoices that a company would need in order to authorize a check for signing.

Surely the writing is on the wall. Online banking and Internet-based transactions are here to stay, and here to replace the manual/printed.

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.

Internet Banking Is Booming

06.17.2009

Once a niche market, internet banking has grown into a widely-used tool for the average consumer.

Among 3,988 adults surveyed in the U.S. by Gartner Group, 47% said they now use Internet banking. In the U.K, 30% said the same.

Results tended to vary according to income. Gartner found that over half of all consumers earning more than $30,000 in the U.S. and ?15,000  in the U.K., use Internet banking. Among lower-income households, 25% in America and 17% in the U.K. use internet banking. Via internet banking, you can get a credit card with bad credit.

Over the past several years, online banking has been seen as a way of appealing to more affluent and younger clients,” said David Schehr, Gartner research director. “However, what is becoming clear is that the overall level of consumer Internet use and the increasingly narrow segment of nonusers–particularly in the U.S.–are shifting the dynamics of who is using online banking and what they seek from it.

Among people who don’t utilize Internet banking, no one single reason was cited above all others, noted Gartner. Around 61% of U.S. households and 58% of those in the U.K. said they simply prefer to use other methods. However, 41% of U.S. consumers and 38% in the U.K. blamed security as the most important reason for not banking over the Internet.

Gartner conducted its survey in December 2008 and January 2009 and questioned people 18 years and older.

According to another report from research firm Forrester, the effect of bill consolidation sites, such as Yodlee and Corillian, was noted. With these sites, consumers can manage and pay all their bills directly online and independent of banks. according to Forrester, such sites are starting to woo more people from the banks’ own bill payment sites, and will own a greater share of the market by 2012. Thus, banks will need to do a better job spreading the word about their own online services.

eBusiness executives at banks need to work to establish earlier and stronger bill payment relationships with young affluents and other young adults,” said Forrester senior analyst Edward Kountz. “To strengthen their position and better support these customers, banks need to add more payment options, deploy online and mobile alerts with greater visibility, and continue to hammer home the message that online bill payment is free.

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Asia-Pacific Banks To Converge Their Mobile & Internet Banking Channels

04.23.2009

A new report by Financial Insights has revealed that banks in the Asia-Pacific region will increasingly converge their mobile and Internet banking channels over the next 12 months. In the process, this will impact how banks and other financial institutions craft their channel strategies and engage with customers.

Convergence is reportedly being driven by banks that are aiming to make financial services available to customers anywhere and at any time. They have to grapple with various issues as they converge the two channels including: (1) the level of mobile technology capable of commonly supporting financial transactions over mobile devices; (2) getting the various parties on board and in agreement; and (3) a user-friendly interface.

Improved mobile technology has allowed financial institutions to provide applications that can work on a large number of mobile phones. Thus, the availability of innovative mobile devices across the region will undoubtedly help it to become the common banking channel in the Asia-Pacific region in 2009 and beyond.