Making trips to the bank with kids in tow ranks pretty low on most moms’ list of “fun things to do,” and banks that considered Dum-Dums in the drive-through as the only loyalty program they needed have received a wake-up call. Now that more moms manage the money, bankers are trying to connect through convenience, making bill paying and financial management as easy as text messaging on a cell phone. It’s the latest thing in money management and just one more step banks are taking to make your financial life a snap.
Online banking and bill pay have been around for a few years, but if you haven’t looked into these conveniences lately you may be surprised to learn how much is out there, free (or nearly free) and at your fingertips.
One example is Bank of America, with 21 million active online banking users, and 11 million users who actively pay their bills online. The company led the way in 2002 to make online banking free, and they are at the forefront of security technology, which addresses two of the main obstacles to online banking that customers have stated in the past, according to Betty Riess, senior vice president of national media relations for Bank of America.
Bank of America recently added money management tools to their site, so that users can do things like categorize expenses, create cash flow analysis graphs and see how their spending compares to their budgets. Banks like Bank of America want to centralize their customers’ financial actions because they believe it builds customer relationships and loyalty to the bank.
Benefits of online banking and bill pay include better financial management, cutting down on paper pushing, increased security and fraud protection. But the one benefit that gets most moms on board? Convenience.
For moms, the around-the-clock access, from their home or work computer, is a big feature of online banking. CheckFree Corp., whose products are behind most banks’ online services, says it sees appreciable spikes in usage during the mid-morning and after 8 p.m., also known as naptime and bedtime for little ones.
“Those spikes are moms paying bills,” says Judy DeRango Wicks, vice president of corporate communications for CheckFree. “Your online bank is open 24/7, which is a big benefit.”
And if you are a mom who travels for business, gone are the days of carrying a wad of unpaid bills around in your purse with you on trips, hoping to find a few minutes to pay them and shoot them in the mail. Now mom can log on using her laptop or even her phone or PDA, and pay bills instantly. Both spouses, wherever they are physically, have continuous access to account balances and transactions, and Wicks says studies show that online bill payers spend just minutes every month paying bills, while those who do it longhand spend two to four hours.
Bonnie Laurence1, a married mother of two in the Midwest and author of The Family CEO, says she is an extensive user of online resources. She uses online banking and online bill pay, and tracks her credit card and investment accounts online. She also tracks the family’s spending habits, using Quicken, and their charitable donations using Turbo Tax ItsDeductible.
The benefits? “Convenience is the obvious one,” says Laurence. “But more than that, using online resources allows me to track our accounts more closely. Some accounts, like our checking account and main credit card account, I check daily. This allows me to stay on top of spending and notice any unauthorized use (as in identity theft) quickly as well.”
Wicks confirms that the most common thing people do when they begin to bank online is check their balances, which she says is a great anti-fraud strategy. And the most common thing they say? According to Wicks, “Why didn’t I do this sooner?”
It seems that more and more people are doing it. CheckFree research segments bill payers into six personality types (see E. Bill Place). Maximizers, the strategic, money-minded and financially organized group that embraces paying bills online, have grown by more than 85 percent since 2004. Paranoid Paper Pushers, careful planners who prefer familiar, paper-based financial management, have decreased by 58 percent, which dropped them from 22 percent of online consumers in the U.S. in 2004 to just 9 percent in 2006.
So if you’re still clinging to your ledger pads and wobbly, overstuffed file cabinets, you should know that they may be going the way of pop stars wearing underwear. You don’t have to snap to make sure your financial life is a snap – it’s all there at your fingertips.
To Get Started
Visit your bank’s Web site to find out if they offer online banking, bill pay or other money management services. Most do, and they will have a demonstration video or test drive to familiarize you with all the features.
For Bank of America, you need the following to get started:
- Internet access using a supported Internet browser
- An internet banking account
- Your social security number
- Your ATM or Check Card PIN
- Your email address
- An anti-fraud site key, set up by you, which features an image, an image title and three challenge questions
Consumers who visit E. Bill Place can also take the Bill Payment Personality Quiz and determine which of the six bill payment personalities aligns with their own preferences.
By the Numbers
- Number of online banking users at BoA: 21 million
- Number of BoA online bill payers: 11 million
- Most popular times to pay bills online: mid-morning and after 8 p.m.
- Time spent monthly paying bills longhand: 2-4 hours
- Time spent monthly paying bills online: minutes
- Percentage of US online households that pay at least one bill online: 69
- On average, it costs banks at least 11 cents to process a check, versus
as little as 3 cents to process an electronic payment
- Nearly 80 percent of the payments CheckFree processes today can be
received by the biller either on the same day or the next dayM
- Annually, more than 405,000 trees must be felled to let consumers know
how much they owe their local phone company. If Americans viewed and paid bills online it would save 18.5 million trees per year
- In 2004, 31 percent of online households paid bills online. By 2010, 52
percent of online households will pay bills online