Online banking becoming a method of doing business locally

Online banking becoming a method of doing business locally

By MEGHANN COTTER

Date published: 4/17/2005

By MEGHANN COTTER

outhside Bank didn't even offer online banking services four years ago.

But the Tappahannock-based firm now offers a full-service system, including account access, bill payment and stock quote reports.

The rapid growth of online banking has some saying that the technology may be quickly replacing paper transactions.

About 44 percent of Internet users say they use online banking, according to the Pew Internet and American Life Project. The organization researches the impact of the Internet on society.

Reports show that online banking has increased from 15 million users in 2000 to 53 million in 2005.

Bankrate.com said larger, corporate banks, which introduced online banking, have the most advanced sites. But Tom Grant, area manager for Virginia Community Bank on Courthouse Road in Spotsylvania, said smaller firms are quickly adding features to keep up with the demand.

His firm, part of a small group that also serves Culpeper, Louisa and Orange counties, updated its service only three months ago. The upgrade makes their system more customer-friendly and includes bill-pay services.

Consumers, he said, like being able to conduct business 24 hours a day, seven days a week, without having to go to a bank.

"Transactions can be processed very rapidly and with less error than many previous processing methods," he said.

Jessica Gaines, Internet banking specialist for Southside Bank, said many customers don't even want to write checks anymore once they get online and figure out what to do.

Now that Check 21 legislation has reduced the float time for checks, people are looking for alternative ways to pay bills and manage their accounts, she said.

Online banking allows customers to have monthly payments deducted from their account and credited to the company they owe. Even businesses can use the system to manage accounts, Gaines said. And many larger companies--such as cell phone or credit card providers--are encouraging customers to use bill payment services.

Grant said online methods are more cost-efficient and less time-consuming for everyone.

"It takes a lot of checks out of the banking system," he said. "There is less paper to process on a daily basis, less need for encoding machines and persons to operate the machines."

But bankers say many consumers, leery of computer hackers and identity theft, are still hesitant to sign up for online bill-pay services.

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Date published: 4/17/2005