Net Banking Is Here, But Has It Arrived?

Is there a task more tedious than paying bills and balancing a checkbook? I can't think of one, and I suspect I'm not alone. At home, the job somehow gets passed between my wife and me every year or two. That's why I've been eager to give Internet banking a try. If it saves time the way online investing does, then I'd chuck our credit union, whose office, come to think of it, I haven't entered in more than two years.

I set out to test two leading Internet banks, Net.B@nk of Alpharetta, Ga., and Telebank of Arlington, Va. While many big, traditional banks such as Wells Fargo and Citibank also offer Net service, I wanted to try out the new breed. One reason is that without the costly burden of branches, these banks can pay more interest. Net.B@nk pays at least 3% on no-fee checking accounts, for example, while Citi pays just 1%--same as my credit union.

Sadly, I'll have to tolerate that 1% a bit longer. I tested just two of the many Net banks now operating, but they both proved too confusing and unreliable for me to give up the foolproof status quo as yet. "Internet banking is still in its infancy," concedes Laurence Greenberg, Telebank's executive vice-president of marketing.

Just how true that is I learned only after my test began on May 19. I searched Yahoo! and first went to Telebank, whose hot stock had caught my eye. So had Net.B@nk's, but Telebank also had an offer to rebate some automated teller machine fees to members of affinity groups--Yahoo! users, for one. I applied online at each bank within 40 minutes, but then grew confused over what I should do next. Send money? Wait to be contacted?

I picked up the phone and got clear instructions from both on how to make initial deposits. That day, Net.B@nk sent an E-mail confirming my application. "Soon," it said, "you'll have everything you need to start NetBanking." Not so. Both banks were slow, but Net.B@nk especially (table). More than a month passed before I received my ATM/Visa check card. "We actually ran out of the stock of ATM cards," Net.B@nk CEO D.R. Grimes told me, blaming fast growth: Accounts, which numbered 17,000 in December, grew by 10,000 over March and April alone.

GOOD IDEA, BUT... More dismaying was that both banks expected me to know to apply separately by phone or fax to begin paying bills online. Eventually, I paid ten bills to a variety of vendors. All reached their destinations in a few days but one, an $86.93 payment to AT&T that I made via Net.B@nk on June 22. AT&T didn't post it until July 6. I'm still not sure who's to blame, the bank or AT&T. The usual Net delays and server failures eroded the banks' "always available" vows. Despite that, each paid bill made me think how cool this could be.

That feeling soon vanished. I discovered Telebank had twice debited my register--the online equivalent of my checkbook record--for several bills and ATM withdrawals. The $217.27 I paid Discover on June 25, for example, was debited a second time June 30. Telebank blamed a bug--since fixed, I'm told--in new software installed June 16. It assured me that only my register, not the actual funds in my account, had been debited twice. It gave me a nine-step set of instructions to correct each extra debit, making for lots of typing and toggling back and forth from my E-mail to Telebank's Web site. Talk about tedium.

With this and other problems, the customer-service people taking my calls at both banks proved courteous, informed, and anxious to help. And when--duh--I forgot to endorse a $3,000 deposit, Telebank paid to return the check by FedEx so I could fix my error fast. All in all, Internet banking struck me as so promising that I'd love to keep it up and suggest that you start, too. But with all the confusion, bugs, and delays, I can't recommend it, not yet.

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