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.
Only 10 percent of customers who use online banking at Virginia Heartland Bank have signed up for bill pay, said Rick Frank, executive vice president. Still, customers signing up for bill pay increased by 40 percent last year.
"You have to convince people it is a safe way to do business," he said. "We go to great lengths to provide the firewalls to make it a safe product."
Grant said any information exchanged on the site is sent directly through a bank server, not into cyberspace.
"Security experts say that very rarely do any intrusions get into the system because of firewalls and internal system protection features," he said.
Computer-savvy customers are the most likely to be trusting of online bank systems, Frank said.
The Pew Internet and American Life Project reports that 60 percent of those ages 28 to 39 have tried online banking.
But younger and older users aren't as eager to use online banking.
Just 38 percent of users age 18 to 27 utilize online banking, and only 25 percent of those over age 60 do.
As for the future of online banking, bankers say consumers may even start to see applications for loans and other financial products online.
"There are endless possibilities of where this could go," Gaines said.
To reach MEGHANN COTTER: 540/374-5434 mcotter@freelancestar.com