What Are Online Banking Services? A Beginner’s Guide To Definition And Its Types
What Are Online Banking Services?
Also known as internet banking, virtual banking or e-banking, online banking is a great way to take control of our financial activities anytime from anywhere. In short, it is an easy way that allows us to conduct our financial transactions through the internet by comfortably sitting at home. All you need to do is visit the website of the financial institution and you can execute almost all the banking tasks for which you had to go to the bank’s branch earlier. For example, deposits, transfers, payment, and online bill payments, etc. Most customers who hold an account with a bank now avoid personally showing up to the branches and access their accounts directly from their computers, tablets, or smartphones. This is known as online banking services. Today every banking institution is providing its services both on desktop and mobile apps.
Definition of Online Banking
Online banking means accessing your legal bank account and executing all your financial transactions through the internet on your computer or mobile phone without visiting the branch. It is a quicker, easier, and usually free way to carry out several tasks without visiting or calling your bank.
Types Of Online Banking Services
There are several tasks you can execute through having a fast internet connection on your system or mobile phone. It mainly includes:
Deposits and Payments — Direct deposit is a type of online banking services offered by many banks and financial institutions under which we receive a routing number so that the banks can transfer money directly into our account automatically. Many employers are using this service to pay direct paychecks to their employees. The whole process takes place online. Similarly, automatic payments can also be done to pay bills, installments if any, insurance, or many more.
Online Fund Transfer — Many banks and financial institutions like Axios Credit Bank Ltd are offering transfer of funds directly to your account. The customers of a bank use these services to deposit funds directly in their accounts. It includes:
Real-Time Gross Settlement (RTGS) — Whenever you are required to transfer large amounts of money, this fund transfer system is being used by central banks of countries to transfer funds to the central banks of another country. Here, the transaction takes place in real-time and on a gross basis without any credit or debit transaction between the accounts. It means the transactions are settled just after they are processed.
Electronic Clearing System (ECS) — This is one of those types of online banking services which is used for paying the utility bills such as electricity bill, telephone bill or credit card or any type of loan payment, etc.
SWIFT Codes — It is a unique combination of 8–11 digits or characters which play a very important role in any international bank transactions. The account holder uses this number to identify the country, bank, and branch of another account holder to whom he needs to make payment. After verifying, the sender’s bank sends the money into the bank account of the receiver in another country.
Immediate Payment Service (IMPS) — This is the type of electronic fund transfer that takes place through mobile.
Account Management — This is the foremost benefit of online banking services that any account holder is capable of managing his or her account activities anytime from anywhere. For example, you can see your bank details, as well as check the balance and download statement and many more. Just log-in through your bank’s website and access your account. You must not share your online bank account password with anyone. After logging in, you can check the balance history, execute transfer between accounts, and many more.
Recommended read: https://medium.com/@axioscreditbank/using-an-online-bank-is-good-for-business-db5be4b7e5c5
Automatic Bill Payment — Automatic bill payment is the facility where you can instruct your respective bank to deduct money from your account on a specific date to pay your bills automatically. It eliminates your struggles from late payment. But you need to make sure that your bank or financial institution as these services may not be free.
Debit Cards — Also known as ATM cards, they work like credit cards except for the fact that you can only withdraw money deposited into your bank account, not more than that. They are the most common type of online banking transactions.
Mobile Banking — As many banks are offering their online services through their apps, now the customers are capable of performing their banking transactions through smartphones from anywhere in the world. You will receive a text alert when there is any deposit or payment in your account or when your account balance reaches a certain level.
Convenience, round the clock assistance, and safety are the major advantages of online banking services. Now you can pay bills or transfer funds in just a few minutes between accounts anytime from anywhere. It is a fast and efficient method to transfer funds as well as monitoring our financial activities whenever we want.
