Scott Hanselman

Are you Banking Online? Why not?

March 5, '07 Comments [60] Posted in Corillian | eFinance
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Banking analyst house Celent has published a new Retail Banking report called "Retail Internet Banking Vendors: Luring the Laggards."

I thought it was funny they didn't say "Luring the Luddites." I bet there was a meeting about that.

The company I work for, Corillian, is the big maroon dot in the upper right corner of the chart at right. Our arch nemesis (nemesi? Just kidding, they're lovely people), Digital Insight, is the smaller dot nipping at our dot. This is a multi-dimensional chart, with the size of the dot representing the size of our customer base, although I'm unclear if it's number of users, number of banks, or dollars the bank manages.

Across all four categories, Corillian stands out as the clear leader, followed by Digital Insight. Metavante, a low performer in Celent’s 2005 report, has significantly revamped its retail platform and has performed exceedingly well registering third overall. Online Resources, Fiserv, and S1 Personal Banking also received relatively strong grades.

As we often ask ourselves around here at Cori, who is not banking online and why?

Do you, Dear Reader, access your banking information online? If not, why not? (Especially considering that you're reading this blog!) Is it a hassle? Concerns about security? Where do you bank online and why? If you don't bank online, what would it take to get you banking and paying bills online? Do you want to pay bills from your phone? Discuss...

Follow up question: I personally haven't written a paper check in at least 5 years, possibly 10. If I could turn off checking all together (like ING Direct's Electric Checking) I'd do it. Who are these older ladies with their checkbooks slowing me down at the Grocery Store, and are you one of these ladies? ;) Seriously, do you write checks, and why?

About Scott

Scott Hanselman is a former professor, former Chief Architect in finance, now speaker, consultant, father, diabetic, and Microsoft employee. He is a failed stand-up comic, a cornrower, and a book author.

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Monday, 05 March 2007 19:08:56 UTC
I do access my account info online, but as far as using the BANK's online bill pay, I'll pass. If I need to pay my cell phone bill, I'll shoot over to verizon and pay it online. I still snail mail a few checks as I can use the generous float (I bank at an old credit union where the float is still at least 4 days) and my overdraft checking protection.
MArk
Monday, 05 March 2007 19:11:14 UTC
I do some online banking, in fact I have only interacted with my credit card account online (applied online, pay online, etc...). I have to say I am quite happy with it, my checking account I cannot access online for a variety of reasons. So I guess my answer is sort of.
Monday, 05 March 2007 19:17:45 UTC
I do online banking, but bill paying is mostly writing cheques, which I don't mind. Though I'm starting to rethink that.

Mike
Mike
Monday, 05 March 2007 19:30:54 UTC
the bank I use is 100% online only. Well, almost - they have phone banking too. And if you NEED to go into a branch, they have an agreement with another bank, but you get charged an arm and both legs to do that. I never need to do that.

If someone sends me a cheque, I usually return it and ask for direct payment. I think I've had one in the last 24 months and that was from the IRD (IRS).

If I need to talk to someone about a cardit card, loan etc, it's done over the phone or via email or their internal "mail" thing on the website.

It's fantastic. I'd not go back. I dont write cheques, everyting is done via electronic transfer etc. It's been this way for, um, 5+ years.

Welcome to New Zealand ;-) Even the banks WITH branches are like this, BTW.
Monday, 05 March 2007 19:30:59 UTC
I'm with you Scott! I rarely have cash on me and write only one check a month - to my daughter's preschool, and that's only because there's no other way to pay them!

Being able to manage my account online, and download that info into Quicken - I wouldn't want it any other way.
Monday, 05 March 2007 19:31:57 UTC
I try to do as much online as possible: bill pay, account transfers, checking my balance etc...

I developed quite a dislike for checks, although very fond of the money, the process of endorsing a check and then heading to the instant teller for a deposit is a pain, and something that I am likely to procrastinate on...

How about a person to person electronic transfer that doesn't include Pay Pal?
Michael
Monday, 05 March 2007 19:32:01 UTC
Oh, and it makes it really easy when I'm traveling - as I am at the moment, in the US - to pay bills etc :)
Monday, 05 March 2007 19:38:29 UTC
I monitor my account activity online but don't pay bills online. I make debit card payments directly to some businesses, but I don't do online bill payment. The last time I looked there weren't enough businesses I need that were setup for online bill payment through my bank.
Tim Costello
Monday, 05 March 2007 19:47:57 UTC
Scott,

Yes... been banking "remotely" actually longer than Online. I live "not in Texas" yet that's where my "primarty" bank is. Intially it was all bank by mail/phone but eventually everything was made available online.

We pay most of our bills electronically... some via

manual Pull - going to the vendors website and making a payment which actually auths them to do a ACH withdrawal. This is generally our mortagage payment and credit cards.

automatic Pull - auto auth payments. Most of our bills are paid this way. Utiltities, Insurance, subscriptions, etc.

POS - we do 99% with Credit Cards. Don't use debit cards since I'd rather have the merchant pay the fee. Plus with credit cards you get alot of protection such as fraud protection, theft protection, purchase protection, etc all for free.

CHECKS - However, we still do write a few checks here and there. The guy that cuts the lawn, small donations to school/PTA, etc.

Cash - We usually have a small amount on hand, but use it very infrequently espesially since even places like McD's, Burger King, Subway have started taking credit cards.

Bottom line, I don't know why anyone would not bank online. Look at a place like everbank.com which has free checking, savings, you can have accounts in US$, Euro, Gold, Silver, they also do loans and have a brokerage. What a deal.

I do know I haven't physically walked into a bank, probably in over 15 years.!!! Been nice.

My grandma though, won't do it. She doesn't even have a PC. Actually she has "two" bank accounts, incase one fails. The bulk of her money is in a brokerage account that has check writing priveledges. So, there is still a good amount of the population that won't or can't bank online.
Bob Archer
Monday, 05 March 2007 20:00:17 UTC
I do most (90%) of my banking online including check writing. The only physical check I write is our tithe and that is because the act of physically writing the check is part of the sacrafice instead of just being another line item on the bank statement.
Monday, 05 March 2007 20:02:43 UTC
I use online banking for all my accounts, and write checks as little as possible.
All my payments are made online.

One issue I've noticed (although it's getting better) is direct debit. In the UK it's common place. You buy a big item, you sign a couple of places and there's a direct debit set up from you to the supplier. Then you walk out the store. It seems much harder here in the US to do that.
From my UK bank account I can set up a direct deposit/debit online with a routing code and account number. That seems hard here also (although that may just be my banks).

As Michael mentioned (person to person/non paypal) - thats easy in the UK. Give your bank an account number and routing code and the money is moved. Trying to do that, at least with Wells Fargo is a pain in the butt. I can't do it online full stop.

Frankly banking in general in the US is pretty crap (personally). I've been told it's because historically Americans liked more control over their money (I guess a trust thing) so many people still walk into a branch to cash cheques, make payments etc. It just seems to be harder to do things electronically here. As Tim mentioned not everyone does online or direct debit payments and of those that do it's often complicated to set up.

This is turning into a rant.. Don't get me started about the differences in actual bank buildings (I often wonder why *every* bank in the US isn't robbed on a daily basis given the way they're set up).

Anyway, if you want some more coherent thoughts let me know and I'll sit and think so more.

One last thing though:

My main bank, Wells Fargo recently stopped the ability to see other accounts balances through their main page. That was a HUGE mistake in my opinion. It gave me a one stop shop for checking where I was at, and if they'd combined it with an easy ability to move funds around it would have been killer. I don't want an offline MS money type deal, I want one site where I can manage accounts, bills etc (stock/401 would be great but perhaps ott) in real time.
I don't know if they custom b-to-b'd each partner or if there are standard banking ws-* services around. If there are, and Corilian provided a consolidated view of all accounts supporting this I'd move to a bank running your platform in an instant.

Seriously. Banking isn't about checking 1 account with one branch of one bank anymore. The banks and financial institutions need to figure this out and make managing and moving money a whole lot easier.
Monday, 05 March 2007 20:07:47 UTC
I do most of my banking online. I have like 6 different accounts/services and well, while it's all online it's not exactly smooth sailing. I have one bank to have a local place to walk into here in Hawaii for banking services. I have a high interest account with ING (thanks to your pointer a long while back). I have another Internet bank I originally used for high interest banking but since is just another remote bank for my credit card transactions (easier to separate out). I use PayTrust for bill payment because bill paying at all the other bank sucks.

It'd be great to consolidate everything at one bank but none fit the bill <s>...

I'd say the biggest hassle easily is the login procedures. Several banks and services have really complicated log on routines that can't be automated with password tool, so you end up fishing for passwords out of some password store.

Banking would hugely benefit for a common ID/logon system...
Monday, 05 March 2007 20:10:12 UTC
Online? Where is this "Online" place and how do I get there?
Monday, 05 March 2007 20:21:49 UTC
I live in the Bahamas where banking is the (very, very distant) second biggest industry. Yet the banking technology is at least ten years old. They don't use a debit card system and they actually charge you for using a bank machine, even if it's there own. They do have online banking but it downloads transactions only into Quicken (and guess who uses Money).

When I lived in Canada not five years ago, I didn't own a chequebook and I rarely even kept cash in my wallet. Now I have to write cheques for everything and I regularly carry $$ because I got tired of the exasperated sighs I'd get when I pulled out my credit card (assuming the place even took them).

If Corillian has any clout, I implore you to visit one or more banks down here and bring them, if not into the 21st century, at least into the late 90s.
Monday, 05 March 2007 20:26:45 UTC
Just as Joel and Bob mentioned above, once Z gets into school you're going to want to know where that checkbook is...unless card transaction processing costs decline considerably for small volume vendors.

You can't just tell the kid selling candles/wrapping paper/popcorn that you'll add them as a payee and they'll get your check in 5-7 days.

On the other side of it, processing fees are incredibly steep for one-time fund raisers. At our elementary school we try to provide it for the big-ticket events (auctions, write-a-check, etc) because the people want their mile bonuses, but find that we are paying the processor 10-20% of the proceeds!

Let's get those micropayment systems in place and universally accepted in the next five years or so, then you can drop-kick your checkbook into the shredder.
Rocco Martin
Monday, 05 March 2007 20:46:25 UTC
omg. i know what you mean about the old ladies thing. i've recently started going to einstein's bagels every morning for breakfast and i pretty much always zip through the line, but this one day i got stuck behind this person paying with cash (which isn't super terrible) AND exact change(OH MY GOSH KILL ME NOW).

at that point of time, i remember that visa check card commercial where the guy paying with cash brings everything to a screeching halt. at that point i realized that commercials are nothing but nuggets of truth.
Darren Kopp
Monday, 05 March 2007 20:51:03 UTC
i write checks to float them.

:o)

just kidding. I'm feeling comical.
Monday, 05 March 2007 21:09:13 UTC
Scott,
Z isn't in school yet is he... We write checks for preschool and elementary school stuff all the time. Field trips, supplies, fundraisers and script. Script is a fundraiser where grocers, home depot, starbucks and 100s more give out gift certs and cards for fundraisers for our schools. Basically we pay 100 for a 100 Fred Meyer card and Fred Meyer cuts a check for 1 - 7% to Portland Public or our preschool. Cash or check only and it is too provicial to send one through BofA or Onpointe. Plus our pizza place does cash or check and we never have cash so we write a check... Old school still is alive in NE Portland.

I was an early adopter of online banking and LOVE it. I would never have any idea of how much $$$ I had until I got online access. It gets better all the time.

Jack
jack
Monday, 05 March 2007 21:09:57 UTC
I write only one check per month, only because lendlord wants them placed in a special box (not a mailbox, mind you). I would much rather set up a bill pay for that.

One thing that pisses me off is the cost of wire transfers. Why do I still have to pay $10-$15 just to move my money from one pocket (er, account) to another? (Yes, I know that ING does it for free, but if I want a transfer between two accounts none of which is ING, I need to either do it through ING (twice as long), mail checks (yuck!) or pay up...
max
Monday, 05 March 2007 21:11:20 UTC
We pay all our bills online, however there are some cases where we've had to break out the checkbook:

- Yard workers/day laborers (in AZ this is very popular) who you don't hire consistently. Get some guys who are in the neighborhood anyway to trim your thorny bushes and drag them away for you.

- My wife likes unique jewelry made by individuals. Those folks usually do all their own jewelry creation, staff their own events and do their own selling. To them it's usually cash or check.

- Cash-type gifts sent thru the mail (birthdays for nieces, nephews or young kids of family friends).

anonymous
Monday, 05 March 2007 21:11:45 UTC
I use online banking, but think it really lags in the usability department. The online access of my local bank works for simple things like getting a balance, but looks like it was written in 1992 (the entire app being driven from some sort of cgi or ISAPI plugin called hb.exe). They offer transaction downloads, but the screwball who designed it got the fields incorrect, so that the date and the first 3 letters of the location are concatenated as the Payee. This totally breaks Quicken's auto-categorize features, since it doesn't know who "1/2/07 - DBT/CHKD Mor" is, and will never be able to, thanks to the date.

Sorry, had to vent there. But seriously, Scott, if you wrote hb.exe we need to talk.

Bill Pay with them is lame, and I would fully expect my power to be cut off if I started using it. I use PayTrust and love it, but again find download-to-quicken painful and not worth it.

ING is great, except I think the security is a bit overboard, especially since it breaks auto-download in Quicken (or any other tool). I'm hoping OpenID/CardSpace will help here eventually.

I use paper checks for payments to individuals- girl scout cookies, etc, but debit card and bill pay for everything else.

So, yes, I use online banking, but not without much pain due to usability and security.



Monday, 05 March 2007 21:15:55 UTC
I use a major bank's online service we pay everything we possibly can via either direct withdrawal or credit card (I don't care to name names in a public forum). So we rarely write checks, although, how you've managed to avoid that for years is beyond me. Doctors tend to be way behind the curve -- there are a couple of those who want checks. There are others. But it's more than enough to carry one check in my wallet for those rare instances where they're both needed and the need is unexpected.

On the other hand we have an interest-bearing checking account with ING and we positively hate the blasted thing. They seem to be struggling with their security model and they are always throwing up intrusive / annoying roadblocks to logging in. And they keep changing it. Unlike other financial institutions where you just have a username and PIN or password and it's easy to get in, ING can't seem to feel any confidence at all that you are who you claim to be. Ultimately that undermines my confidence in them, ironically.

That said ... some kind of biometric scanning would make me feel better about online banking / investing, while hopefully making it even easier to log in to various services. I don't know what the hold-up is on widespread use of fingerprint scanners -- standards I suppose.
Monday, 05 March 2007 21:25:40 UTC
We already knew Corillian rocked.

Yes, online, all online.
Matt
Monday, 05 March 2007 21:26:42 UTC
I absolutely do bank online, almost exclusively. I visit the branch only to cash rebates and I only write checks when giving to charities that don't accept plastic. For bill payments, I prefer autopay with a card if the biller supports it, otherwise I use BoA's bill pay service.

Speaking of BoA, their online banking site is very impressive. I'm not sure who the eFinance provider is, but the experience is excellent, definitely the best I've seen anywhere. The My Portfolio view which aggregates data from all my credit, banking, broker, mortgage, 401(k), rewards, miles, utility bills, (even news feeds!) is a huge time saver, it blew me away the first time I tried it. I'm amazed at how interoperable it is, seemingly regardless of which institution my external account is with.
Monday, 05 March 2007 21:39:00 UTC
So, I get all worked up every time I think about the hb.exe programmer who messed up my quicken (see previous comment). So I did some googling. "Hb.exe bank" reveals a number of text files containing demo login information on an ironically named "ibs.secure-banking.com" subdomain. You can log in to what I hope is just their demo using that info. Going to www.secure-banking.com doesn't work, so I googled, and guess who came up? "k2.secure-banking.com" - the main site of that little dot in the lower left, S1. They should be lower and more to the left.
Monday, 05 March 2007 22:02:42 UTC
We don't get our checks back any more so its tempting but, there is just to much work to do to set it all up. I do like to check accounts and do transfers online.
Monday, 05 March 2007 22:06:54 UTC
I bank online, manage money using M$ Money, and pay bills online. But I do write a few checks: my church doesn't take electronic donations, and my apartment complex charges a 2% fee for credit/debit (since that's my biggest single bill, it's worth writing the check). Other than that, all electronic, baby!
Peter
Monday, 05 March 2007 22:12:10 UTC
Those of you who write one check here or there, why aren't you just paying them online and letting your bank write the actual physical check?
Monday, 05 March 2007 22:24:52 UTC
Because it's faster to write one check by hand than anything electronic.

I only write a few checks - usually to laborers etc. and one for my cable bill (because it usually short term between moves). I could do that online but it'll take longer to do than write the single check and mail it. It's 2 minutes vs. 5 minutes to log on somewhere find enter or pick billing information etc. For a one off check it's faster to do manual. For more than one or two electronic makes sense.
Monday, 05 March 2007 22:36:42 UTC
I pretty much do all my banking online (even though my credit union, Star One, uses Digital Insight as their banking platform).

Only time I write actual checks is when I go to Original Pancake House on Barbur for brunch as they only take cash or checks and for me writing them a check is a whole lot more convenient than having to go to an ATM for cash. Oh, and I also write checks sometimes to Valley Lanes for my bowling league payments.

All my bills are done through online billpay.
Monday, 05 March 2007 22:55:58 UTC
99% of my checks are done online, however, there are times when I need to pay right then and their (a Church fundraiser or something along those lines). If I am not carrying cash (which I never do), I can use a check.
Monday, 05 March 2007 23:33:49 UTC
I only write a couple for quarterly, local city bills. Not worth doing those online -- besides, don't the banks charge a fee for that service?
steve
Tuesday, 06 March 2007 00:26:03 UTC
Almost everything online. The only time I have to go to the bank is to the ATM machine, to deposit checks sent by some clients that still prefer to do payments that way.
Most of the banks here in Portugal have very good online systems, and they see it has a big advantage. One example: my father, who is not very internet savvy, moved all his accounts to a new bank just because the web interface was easier to use.
Well, I have never seen the what Scott refers: "paying them (checks) online and letting your bank write the actual physical check", but it is so easy to transfer money to another bank account, you just need the number, and the banks only charge for it if is urgent (now).
Tuesday, 06 March 2007 01:36:27 UTC
I do pretty much all via electronic banking, including bills, however there are some problems.

#1. The laborers (e.g. the gardener, the guy who patched up holes in the wall, etc...) who have questionable status in US prefer to be under the radar and thus accept checks when you hand it to them, not mail it. If there was some Paypal-ish way (where the trust/privacy issues are addressed) to handle these payments that would be awesome.

#2. The integration in the electronic banking land is ok all there yet. For instance, I can't tell you how many times I got an email from the bank saying: The bill from Vendor (Verizon/Time Warner/Gas Company/whatever) was not received. Now WTF am I supposed to do with an email like this? The reason I am doing electronic banking, is that so that I don't have to deal with it. Maybe Scott can shed some light on why are these issues so common and what are possible solutions.

Regards
frizzo
Tuesday, 06 March 2007 02:27:10 UTC
Banking online:
- My mother doesn't. She has an old computer with Windows 98. She uses it for reading emails, and surfing a little.
- My mother-in-law doesn't. She does not have an Internet access, though her computer (my sister-in-law's previous machine) is good enough for XP.

Conclusion: For those I know who don't do banking online, it's because it would be too expensive for them!

Writing checks: I write checks all the time for a simple reason. Not everybody accept online payments or credit cards. And even if some of them would accept some kind of online transaction, it's much simpler to pay people I meet in person the very moment I meet them.
Tuesday, 06 March 2007 03:37:14 UTC
I do all of my banking online, and I do mean all. Direct deposit goes into my account and payments go out via credit/debit card or online bill pay. When I have rebate or gift checks, I used to mail them in, but my bank now supports scanning checks in via a scanner over the internet to deposit. Scan and shred - amazing!

I do also occasionally write checks: I'm buying a bed at Costco this week. Costco only takes cash, debit cards, American Express, and checks. Since I don't have an AmEx card, I'll have to dig out my checkbook and take it with me.
Brad C.
Tuesday, 06 March 2007 03:44:37 UTC
I didn't even realize that using online bill pay meant I could have my bank send a check to anyone, until I actually started using bill pay a month ago, thinking I would just use it pay utility bills. So, either I was really ignorant, or maybe the banks need to do a better job of advertising the fact that you can actually pay anyone. If I had known that I'm sure I would have started using it years ago.

To answer your question as to why I still write a random check here and there, I guess it's because those rare payments are not made on a regular interval and they're made in person, so it's easier than having to remember to do it when I get home. (Someone needs to integrate one of those cell-phone based payment systems with a major bank's bill pay service, *hint* *hint* ...)
Tuesday, 06 March 2007 05:22:35 UTC
Online banking? You expect me to give up my banking information to a bunch of schmos in Portland? Besides who needs online banking when you have a wife. Once a month you say "Honey, are the bills all paid?". No muss, no fuss. BTW: I don't ask her how she spends the money and she doesn't ask me about the code I wrote to earn it.
Tuesday, 06 March 2007 05:57:46 UTC
Because Onpoint (formerly PTCU) here in Portland is terrible. It doesn't work reliably with Quicken or Money. And their online billpay through their website is horrid. (They don't use Corrilian obviously).
I do agree about the wife thing too. Not so much for me, but she wants control and doesn't feel she has it online. So she pays the bills with paper. She doesn't trust "the internet" for banking because it isn't reliable. Of course, we have comcast so it is down frequently. And since Onpoint is so bad, its hard to differenciate.
Erik
Tuesday, 06 March 2007 06:22:33 UTC
I write a check here and there, for personal transactions -- rent, mostly.

The reason I'm not doing "checks" online is that A) I didn't really know you could do that, B) I assume I would need the receiver's account number (or address? or just the name, and my bank would then write the check and mail it to me?) C) I have 250 or so checks sitting here in my desk drawer, and it's just as easy to write a check as it is to type one, D) a check is "instant" to the receiver -- how long does it take for a bank to write the check and do what they do (what do they do? mail it? to whom?).

I know I can look up the answers to those questions, but I figure letting you know my thought process would be more helpful.

I do everything else online.
Tuesday, 06 March 2007 07:12:40 UTC
I'm online for more than 10 years. No need to go to a counter.

If there wouldn't be things like a fruit market, I would not even need cash any more. Supermarkets accept CC or debit cards with PIN or signature. The PIN payment is faster than using cash.

This 'writing checks' all the time seems to be an american habit which I always found a bit strange.
I pay most of the monthly things by direct debit (here in Germany). Telephone, electricity, kindergarten etc. all direct debit. Some people may feel it's risky to let them just collect the money from your account, but actually it's not. There is a 'no questions asked' return policy. The bank will return the money immediately if you complain to them that the payment was not OK.

Kai
Tuesday, 06 March 2007 08:59:00 UTC
I only write a cheque for the Milkman, he comes to the door of my house wanting cash and as I rarely carry cash any more a cheque has to suffice.

In fact some of the larger supermarkets have banned cheques and accept debit and cash only her in the UK.
Simon
Tuesday, 06 March 2007 14:31:10 UTC
Funny, I was in line at a store the other day and someone was writing a check. I remember watching this guy and thought "What is this? Writing a check?!! What's the matter with this guy?!!!! Some nerve holding up this line for a check!!" I was hoping at that moment a group of men in dark sunglasses, suits with two-way radios would jump out of somewhere, grab this guy and throw him in a black suburban and take him to a brain washing facility where he would learn to use his debit/credit card or other fast pay device and like it. The only reason that my wife and I write checks anymore is because the day care we take our kids to is an in-home lady and she doesn't have the processing abilities to handle cards. Other than that I totally agree; pay it online, pay it with debit/credit or at the very least use cash so there is no ID checking hassle.
Tim
Tuesday, 06 March 2007 14:52:08 UTC
I try to avoid writing checks as much as possible - but as others have said, there are certainly times (generally in person) when it's unavoidable unless you carry a large wad of cash.

Moving to the US from the UK 10 years ago was like stepping back in time. I'd been paying utility bills by direct debit since 1980 or earlier and phone banking (First Direct in the UK has been great!) since 1990. Moving to paying utility bills monthly (quarterly in the UK) by paper check and stamp was ... indescribable. I wondered why the bank wanted to ship us two boxes of checks when we opened accounts. Then we found out ...

Even now, as our children get older and I want to give them their allowances other than by cash, it's a joke. In the UK, I'd just set up a regular transfer to their accounts (which are at a different bank from mine because of ridiculous charges). Here in the US, sure I can set up a regular payment from my account ... and my bank cuts a check and mails it to them (at home!) and they then have to take it to their bank ATM. Crazy and must increase the cost of retail banking no end.

So ... is all that something that Corillian can hope to solve, or is the retail banking system in the US in need of fundamental overhaul? I'd hope for the former, but I'm not holding my breath - I think my children will be retired before it gets fixed!

Adrian
Tuesday, 06 March 2007 15:15:31 UTC
I write one check every month, to my 70-year-old landlord, because he's a life-long New Yorker and I'm not going to change his mind.

And I only use cash to buy drinks at bars and t-shirts at rock concerts. Everything else goes on the card.
Tuesday, 06 March 2007 16:23:43 UTC
I do transfers and most of my bill payments online (mortgage, car, etc.) but there a lot of places that still require you to send in the bill stub along with your payment so I can't do all of my payments online yet. Specifically, magazine subscriptions/renewals, certain medical bills, and certain insurance bills I have all require you to mail in the stub - something that I can't get to happen online. Granted, it's the fault of the companies that require this and don't provide an online option, otherwise I'd do everything online.

My parents do very little online banking. My mom is the lady in front of you at the store with the checkbook (though she's getting better about using the debit card). I don't think it's that they don't want to do it online, it just doesn't occur to them. "It's faster to just write the check and mail it." I think it's more a situation where they've always just paid their bills with checks so they have a certain comfort zone they aren't breaking out of. My dad uses TurboTax on the web every year to file his taxes... after he manually fills out the physical tax forms himself first.

I also think there are some UI usability issues for them - putting up an E*Trade style UI where there's every possible option you could ever want right there on the page in front of you is great for the experienced user who knows exactly what they're doing and where they want to go, but newcomers and less technically literate folks need something a lot simpler than that. My parents don't need 15 different pivot tables and 150 "creative" ways in which to display their finances; they just need to learn how to pay a bill online first. Seeing the sheer quantity of information is confusing and intimidating to them (though they'll never admit it) so they just avoid the whole issue by paying with a check.
Tuesday, 06 March 2007 16:27:25 UTC
What really annoys me is when you go to pay with a credit card and they ask for your ID. Isn't that one of the main reasons to use a CC over a check?

Don't these retailers watch the CC comercials that tell you to use you CC rather than write a check cause you need 3 forms of ID to write a check?

Argh!

BOb
Bob Archer
Tuesday, 06 March 2007 17:14:19 UTC
In the UK, a lot of signs are springing up in major retailers to inform customers that over the next few months they will stop accepting personal cheques...

All I can say is, welcome to the 21st Century! I mean, really, what is the point? I still reckon that the main reason that people pay by cheque (<- note correct spelling.. ;-) is to flaunt the inefficiencies of the banks, in that they can pay by cheque about 5 days before they get paid, safe in the knowledge that by the time it clears the funds will be there.

Finally, I can stop being behind the only person in the entire supermarket that is paying using this out-dated mode of payment.

Hopefully, the demise of paper banking and the rise of electronic banking will also mean an end to the high-street bank, which of course will make way for many more trendy wine bars....

Also, barring Western Union, cheques are probably the least secure way to pay. In the UK, you can wait 5 days for the cheque to clear at the bank while they do all the necessary checks etc., but they can still yank the cash out of your account any time in the future that they find the transaction to be invalid.

Arggh! I hate banks, lol!
Tuesday, 06 March 2007 18:20:13 UTC
Travis:
magazine subscriptions/renewals, certain medical bills, and certain insurance bills I have all require you to mail in the stub


I usually just enter my credit card number for magazine subscriptions - they usually include a spot for that...medical bills and insurance bills, I've actually found as long as you include your account number, I've never lost an e-payment. They are mailed a check with the account number printed in the memo field and they'll apply it happily. They really do want our money...
Wednesday, 07 March 2007 17:49:10 UTC
I write paper checks when I need to send money to a PERSON and I do not know there bank details. Also sometimes people find it very hard to match up on-line payments with paper forms, so fixing a check to the form is a lot less trouble. (In the UK it also costs less for a small company to bank checks then to process card payments.)

Why can't I have an electronic check that I can print out, that the other person can pay into there bank account on line provided the name of the account matches?
Wednesday, 07 March 2007 19:24:40 UTC
Sounds like a lot of the resistance is lack of proper marketing from the banks.
A recurring theme in these comments seems to be "I can't pay someone online, because they aren't setup to receive online payments, etc".
Any decent online bill payment service will let you send a payment to anyone with an address. If they accept electronic payments, they will get one. If they don't, they will get a paper check in the mail.
Wednesday, 07 March 2007 21:57:44 UTC
I guess I'm in the minority (of one) here ... I do very little online banking. My concerns are about security. Shoot me an email if you're interested in more on that.

@ bob archer -- they ask for ID to prevent someone from using your CC fraudulently. My wife had her purse stolen, and within an hour they'd charged up hundreds of dollars' worth of merchandise. A simple ID check would have stopped that; now someone (CC company or merchant) gets to eat that cost. (Not us, thank goodness.) I'm happy when people ask for ID for CC transactions.
Wednesday, 07 March 2007 23:01:32 UTC
I've taken it a step further. Not only do I do all of my banking online, but I also get all of my BILLS online too. I use a service called PayTrust. All of my bills are mailed to a PO Box in South Dakota. They open the envelopes them, scan the bills and send me an email with a notification that I have a new bill. Now, where ever I am... if I have access to the Internet, I can get my bills paid.

Very useful when you have to spend a couple months out of the country. :-)
Wednesday, 07 March 2007 23:02:51 UTC
Jason - doesn't that PO Box now show up on your credit record as somewhere you've lived, even though you haven't?
Thursday, 08 March 2007 03:45:30 UTC
I do not bank online at all. Other than to check balances and transactions and download the register to MS Money.

My reasons are that I like the physical self documentation of a check. A number of times over the years I have had a vendor (like my Mortgage company) accept a cancelled check image as proof of payment but they would not accept an emailed transaction register.

Since I write software for a living, I know that at times "things" happen to data and to the best programs that were not intended. And since I have worked at 2 major banks as a programmer, I know exactly how unperfect they are.

The best argument I can give is the same one that I use for not having the laser eye surgery. When eye doctors start having it done in droves then I will. Both my opticians still wear glasses. And almost all the management I was involved with at both banks still write checks!

One manager in particular said that if checks ever go away, then currency won't be to far behind, and that would be very very bad in my mind. Considering it can take weeks of leg work to convince a bank they have made a mistake. It would be worse if you had only the banks data to rely on to make your case when money "evaporates" from your account for some reason.

I do make online purchases with a credit card, and I use very little cash, mostly my debit card, but I always ask for a receipt, and I always print the order page out when I order online.

Frankly I look at paper checks as a kind of check and balance, no pun intended. For the same reasons I am seriously upset at electronic voting machines. Anyone with sufficient resources could tamper with those systems and there would be no physical ballots to fall back on. Sure recounts are a mess, who could ever forget when we all learned what a "chad" was. But the outcry would have been worse had there been no ballots to count.

I am not afraid of technology, I am just familiar enough with it to know it can be much more easily manipulated, than actual hardcopy paper. With the paper you need physical access, with data any kid with a connection can potentially mess with your life!

Cheers,

Bob Porter

Friday, 09 March 2007 00:39:11 UTC
I recently fired First Tech Credit Union, where I've banked for 12+ years, because their "new and improved" online bill pay user interface is bad, bordering on cruel. They say bill pay is the best way to retain customers, but there's only so much I can take. Much happier now with WaMu.
Jeff Madison
Thursday, 15 March 2007 19:26:53 UTC
wells fargo bill pay doesn't make no sense you have to wait for 2 days before they processed and pay your bills.It is your money and you don't have a choice on how soon do you want to send it. You should have just send a check and mail it if that's the case. It is not as convenient, not quick and not as easy as the other companies. and because of that i have to call my mortgage company and they charge me $15 for my phone payment.
christine
Friday, 16 March 2007 19:17:02 UTC
Scott, do have any insight as to which of your company's customers utilize your full suite of software?
In other words, of the banks on your customer list: http://www.corillian.com/customers/, which are the best?
Jeremy
Tuesday, 20 March 2007 18:55:32 UTC
I started using personal money management software beginning with Bob Parsons' (www.bobparsons.com) Moneycounts and began using Checkfree for electronic banking back in the late '80s when it first became available. I do as much of my banking as possible online but there are still times when I need to write a check:

- School expenses. Most of my checkbook register entries are for all of the little things we're asked to pay for at our kids' school. Books, sports fees, field trips, etc.
- Family & friends balance of trade. Next to school expenses, there's a flow of reimbursements between family and friends for grocery runs and other items they pick up or order on our behalf.
- Miscellaneous donations, Girl Scout cookies, etc. While some forms allow me to provide a credit card number, I'm wary of doing so for privacy reasons.

I'm sure these all could go away with the right replacements. For example, I'd love to be able to do the exchanges by credit card or PayPal so I could automatically track them with the rest of the budget. I see two problems blocking that today: the recipients don't bother or don't know how to set themselves up for electronic payments, and while I could have Checkfree send a check, I'd rather not have to set up payees for each of them in online banking.

It would be great to have some frictionless form of payment that's secure, requires zero per-transaction/per-payee setup (I don't mind one-time setup) and can be done in person, online or by phone.
Rich
Tuesday, 01 May 2007 20:18:10 UTC
I agree with what Rich says.

One thing to keep in mind: Those people who have checking accounts earning high interest rates are better off paying some large bills by paper check instead of by using online bill pay. Here is the reason:

When you pay a bill online, whether the money is sent by ACH transfer or if the bank sends a check for you, the money gets deducted from your account the day you ask the payment to be sent. If the money is sent by ACH transfer, the payee will likely see the bill within two days and will credit you with the payment at that time. If the bank cuts the check for you, the payee will credit you with the payment only when the payee sees the check.

When you send a check to a payee, you receive the credit for the payment as soon as the payee sees the check. However, the money does not get deducted from your account until the payee deposits or cashes the check. Between the time the payee sees the check and the money is deposited, you are earning interest on the check amount! This interest won't be huge, but can outweigh the costs of writing a paper check (envelope, stamp, time, etc.).

The time between receiving a check and having it deposited varies from payee to payee. But I have established a rule of thumb for what types of payments I should send by paper check. If you have an interest earning checking account, you can establish your own ROT as well.
Devu
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Disclaimer: The opinions expressed herein are my own personal opinions and do not represent my employer's view in any way.