Traditionally, banking was not really easy as you will have to get to the particular spot where your money is before you can get your money. But now, banking has become so much easier because you can do a lot of things and make a lot of transactions from anywhere and at any time. In this article, you’ll be getting to know what online banking is and you’ll also be getting a comprehensive answer to the question “how does online banking work“.
Everything tends to make more sense now via e-banking, what a good time to know the principle of online banking and how it works.
Online banking is a way of making transactions without necessarily engaging in any physical contact; it is 100% safer than what banking was 300 years back.
Online banking is mostly referred to as E-banking, which means electronic banking. It is a means of sending or receiving money through the internet, using your smartphone, desktop, and other technologically equipped devices.
Unlike the olden phase of banking, online banking is way faster, you can also make several numbers of transactions within minutes.
Here’s everything you need to know about online banking. This article will also feature a comprehensive answer to the question ‘How does online banking work’.
What is Online banking?
Online banking, also known as web banking or internet banking, is an electronic payment system that allows customers of a bank or other financial institution to conduct a range of financial transactions via the financial institution’s website.
The online banking system will basically connect to or be part of the core banking system managed by a bank and is in contrast to branch banking which was the conventional way customers accessed banking services.
Some banks function as a “direct bank” (or “virtual bank”), where they rely completely on internet banking.
Internet banking software provides personal and corporate banking services offering features such as viewing account balances, checking recent transactions, obtaining statements, making payments, and transferring money between accounts.
Benefits of Online Banking
The following are some of the many benefits of Online banking:
- It helps to prevent fraudulent acts.
- It reduces the case of robbery.
- Some of these online banking apps have an automatic savings plan, this will help cultivate the habit of saving by locking your money.
- It is very fast.
- It is not always reliable, but can still be reliable to a large extent.
- They offer 24 hours support.
- Your security is assured.
- You can monitor your account closely.
How Online Banking Works
This section of the post will be answering the question ‘how does online banking work”.
1. Initial Set–Up
This is the first thing you have to do in other to gain access to the easiest way of banking; you will have to set-up your banking account with trusted banking companies.
Once the set-up has been made, then you now have the access key!
How to Set–Up Online Banking
Most times you have to visit the bank to set this up in other to register in person, physical registration is not always necessary. But if your country is a developing one, then you may have to go to the bank to register physically.
For instance, I got my bank account set up 3 years ago, I had to visit the bank in other to fill the necessary form and bio-data.
Once you visit the bank, everything needed will be done for you, no stress!
After that, some receptionist will give you their online banking App and all the necessary online banking links, if they do not give it out, you should ask them.
By doing this, you are saving yourself a bunch of stress; you don’t have to visit the bank to withdraw money or even queue at the ATM gallery before getting your money.
So to set up a safe and secure online banking account, visit any bank near you then ask for their mobile banking App all the necessary online banking links after you’ve completed the registration.
2. Login Set-Up
Once you have gotten the mobile banking app installed or once you’ve opened the online banking link in your browser, you will have to set up your login information.
This is the information you will need whenever you want to make any transactions; as regards the cryptocurrency world, the blockchain wallet also does this.
The login details will help confirm the person behind the transaction; this is the reason you have to make this information very confidential.
Without logging in, you cannot perform any transaction here.
3. Work with the Available Menus
These menus vary, depending on your bank, you have to read the FAQ (Frequently Asked Questions) in other to know the basic operation of the online banking App.
Some menus I know banks offer include, transferring money from your account to a recipient account, buying airtime, paying bills, and a lot more.
This section should have answered the question ‘How does Online Banking work’ all the resourceful information it provided.
Banking Without the Internet
Sometimes you don’t always have data on your electronic device, no worries; there are also ways to bank without the use of the internet.
The first method is the bank USSD code; this is the banking code you can use with any device, even if it is not a browsing type.
The bank USSD code varies, two banks can never share the same code.
Using the USSD code, you have to follow the procedure and select which action you will love to perform.
I don’t stress myself any longer, I use my bank USSD code to buy airtime on my phone, and you can also start doing this in other to save stress.
This USSD code method of banking is limited; you cannot withdraw your money, all you can do is to send money and buy airtime.
Though USSD banking isn’t available in all countries, it’s a great banking method.
Conclusion
I hope this article has taken you through everything you need to know about online banking and also comprehensively answered the question “How does Online Banking Work“.
Sometimes, online banking may be frustrating; this is why we have several online banking software. Before you register your information with specific online banking, you need to get useful information.
What I do most is to first get reviews from past and present users of different online banking software I know. With this, I can select the online banking platform that’ll be the best for me.
You should also check out our blog post on How to Transfer Money from One Bank Account to Another Bank Account Online
