Electronic banking systems and global payment services providers offer convenience and flexibility relative to traditional banking. Global payments providers are becoming more and more popular especially for corporate payments in e-commerce industry as there are many innovative and cost-effective payment solutions offered. For example, it is possible to send mass payments, batch payments, order debit cards or integrate API for processing payments on your website. According to McKinsey report dated November 2014, payment providers' share of total banking will reach 43% by 2018 as current growth is 8% annually. However, physical bank branches typically deliver more personalized and prompt service. Each system has pros and cons in the areas of customer security and privacy.
Convenience and Flexibility
For customers who emphasize efficiency and convenience in their banking experience, flexibility is a key driver of Internet banking and modern payment solutions that are currently available in the Internet. You can perform simple bank transactions and transfer funds from home or using a laptop out in public. Mobile applications add to the convenience. You can use mobile apps to transfer funds and pay your bills. Avoiding trips to the local bank and lines are also benefits.
Some customers prefer the interactive customer service and personalized experience that comes with a traditional bank. As customers get more comfortable with electronic banking or online payment system, this preference may subside, but the ability to look a banker in the eye when discussing products is advantageous. Personal rapport with a small-town bank may still lead to opportunities to sell yourself when seeking loan funds. Also, you get the chance to ask questions, listen and express concerns efficiently with an in-person service experience.
One of the reasons for rapid expansion of Internet banking and global payment services providers is that banks are closing physical locations to reduce costs. Branch facilities, equipment and workers are among the cost drivers. With online banking or payment service provider, companies are more able to offer customers no-cost or low-fee services. You can pay your bills online efficiently, while saving on checks and stamps. People who maintain higher balances in checking and savings accounts may prefer traditional banks, which often have higher costs, but also higher-yielding investment product options.
Hand-delivered deposits, transaction receipts, surveillance cameras and security guards are among the traditional banking security advantages. While hackers could breach the technological and computer security systems of a physical bank, hacking is most often associated with electronic banking as of 2015. Identity theft is a major crime in the United States. Electronic banking exposes you to potential theft of user identification and passwords, which may allow access to your private information and accounts.
For some customers, the personalization of traditional banking outweighs electronic innovation. Others prefer the convenience and cost-effectiveness offered by online banks and non-bank financial services providers. These payment solutions are easy and quick to set up. Some banks offer the best of both worlds by combining branch locations along with Internet banking services.