Online Banking, also known as net banking, e-banking or online banking, is the facility provided by banks and financial institutions which allows customers to use banking services via internet. There are scores of services like online money transfer, account opening, bill payment, tracking account activity, etc., which are made available to customers with the help of online banking. Online banking also allows banks to advertise their products and services in a manner that it reaches out millions of customers. However, in order to use online banking, an individual will require access to the internet, which is scarcely available in rural areas. Internet banking can also be accessed via mobile phones which have a data 3G/4G connection.
Scope of Online Banking Services
With the help of online banking, there are several indispensable services which are made available to customers, without them having to personally visit the bank. Customers can perform financial transactions like transfer funds online, pay bills, apply for loans and open a savings account among various other debit card transactions. Under non-financial transactions, customers can carry out several activities which may require going to the bank like applying for a new cheque book, getting account statements, update contact information, start/stop payment, etc.
E-wallets Vs Net banking
Digital payments have seen a surge ever since there has been demonetisation of high currency notes. More and more people have realised the convenience of making payments digitally. As a part of cashless economy, mobile wallets and internet banking have played an integral role.
What is an e-wallet?
A mobile wallet or an e-wallet is virtual digital wallet where you can save your funds to be used without the need for swiping any debit or credit card. It is one of the fastest modes of transaction and does not require a minimum deposit amount. E-wallets can be used to purchase anything from groceries to flight tickets. E-wallets can be downloaded on your smartphone through your app’s store.
How to use an e-wallet:
The most basic requirement for using an e-wallet is a smart phone and an active internet connection. You are required to fill in the basic details such as name and mobile number to sign up for the wallet. Once you are logged in, you can transfer money using net banking or through your debit/credit card into the wallet. According to RBI’s latest notification, up to Rs.20,000 can be added into the e-wallet.
Most online payments are done via internet banking option. It has become one of the most convenient payment methods for transferring money. Most banks have created their own apps that can be downloaded on the phone and used any time. Through mobile devices, users can make transactions through mobile apps, net banking facilities, or internet fund transfer services such as IMPS (Immediate Payment Services), NEFT (National Electronic Fund Transfer), and RTGS (Real-time Gross Settlement).
E-wallets Vs. Internet banking:
Although both are considered to be digital payment platforms, both differ in some ways. The difference has been explained through the following table:
|Features||E-wallets/Mobile wallets||Internet banking|
|Transaction limit||Rs.1 lakh||As much as balance in account|
||No usage charges except for specific fund transfers|
|Rewards or offers||Offers such as cashback and discount periodically introduced by specific partner merchants||None|
|Usability||Offline (POS) and online||Only online|
|Protection from fraud||Low to medium||Highly secure|
Advantages of Net Banking
In an era when all of us are heavily dependent on technology, internet banking is nothing short of a savior. There are several advantages which e-banking has over conventional banking, which requires one to visit the bank and stand in queues. Listed below are just some of the benefits of internet banking which make our life easier each day.
- Easy To Operate – Online banking is very simple and easy to understand, maybe easier than conventional banking in many cases. Operation of an online account is rather simple and easy to use.
- Convenience Of Making Payments – Internet banking makes it quite convenient to carry out transactional activities like transfer of funds, payment of bills, etc. this means, no longer having to wait in queues for bill payments or having to safely keep receipts of bill payments, which are also perishable. All record of payments and bills is stored online on your account.
- Round The Clock Availability – Another indisputable advantage about online banking is that it is available round the clock, throughout the year. You don’t have to schedule a time when you can carry out banking activities, regardless of it being a weekend, time of the day or even holidays.
- Time Saving and Efficient – E-banking in not only fast but also highly efficient in letting you carry out transactions within a few minutes. Transfer of funds, account opening, bill payments take no more than a few minutes to process, which helps save a lot of time.
- Account Activity Tracking – Another very important benefit provided by net banking is that it allows you to track your account activity at all times. You can keep an eye on your account transactions and balance at all times. Any unauthorized transaction or discrepancy can be immediately tracked and reported to the bank immediately, allowing you to keep your money safe at all times.
Disadvantages of Internet Banking
Online banking is accompanied by a fair set of advantages, but like everything else, it also comes with certain disadvantages. Some of the things to look out for in case of net banking are as follows:
- May Be Complicated For Beginners To Understand – For those who are new to the world of banking, online banking may pose as slight challenge in terms of usage. While some banks do provide demos on their websites regarding the use of online banking, there are many banks which don’t do that. In the latter case, an inexperienced user may be left to fend for him/herself.
- No Online Banking Without Internet Access – In order to use online banking, one needs to have a stable internet connectivity or access. Without one, the facility of online banking is of no use. Also, if the bank servers are down, you will be unable to access your account online to carry out transactions.
- Transaction Security – One of the main reasons which still keeps a lot of customers from using internet banking is the safety of transactions. While all major and recognized banks will have a powerful security encryption in place for ensuring the safety of customer’s transactions, there have been instances where transaction details have been compromised. Though it is uncommon, but still can pose as a major threat.
- Securing Your Password – When it comes to internet banking, account passwords are of crucial importance. For that reason, it is absolutely necessary that a user must never reveal their account password to anyone. The ideal thing to do would be to memorize the password and also keep changing the same frequently, to eliminate any chance of password theft.
GST of 18% is applicable on all banking products and services from July 1, 2017 onwards.
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