What is Online Banking? The best Online Banking App in Nigeria
Here’s All You Need To Know about Online Banking in Nigeria and how it can benefit you as a Nigerian.
The term banking isn’t new to us. Many of us have known what banking means long before we even had our first bank account. But what is relatively new to some Nigerians is the concept of online banking and how it works. Which is why today we would be talking about Online Banking and all you need to know about online banks in Nigeria.
While many Nigerians have already begun embracing online banking in their day-to-day living, making convenient banking services and payment option for their business, some Nigerians are still skeptical about using online payment solutions due to inadequate knowledge of how online banking works and the fear of interned fraud which is one of the reasons some Nigerians prefer to walk into a brick and mortar institution.
This post will help you understand what online banking is and how it can be beneficial to you.
How internet banking began
Before the 2000s, the use of raw cash was said to have bred corruption through the “cash and carry syndrome” usually linked with the swift movement of “Ghana-must go” bags by some politicians. This led to the adoption of the online system of banking. As you read this post, millions of Nigerians are making online banking transactions in seconds.
As of 2020, CBN reports that over “249,076,105 billion mobile app transactions valued at over N19.3 trillion are transacted by Nigerians”.
What is Online banking?
Online banking means managing your bank accounts with an electronic device or smartphone. This includes transferring funds, monitoring transaction history, and paying bills electronically with the use of an internet-enabled device.
Today you can make purchases of goods and services worth millions from the comfort of your home. Some stores even place a barcode on some products or display a barcode at the checkout point. All you need to do is scan the barcode with your smartphone and transactions are made in less than two minutes.
The concept of online banking gives users full control of his account while minimising the need for human interaction from bank representatives. For example, go to the google play store or app store and download the Hometown app and sign up for an account, and instantly, you will start making online banking transactions immediately.
Hometown lets customers have access to their accounts via the Hometown mobile app. You won’t meet a banker face to face, but with a mobile device or computer, make transactions anytime.
Advantages of online banks
Here are some advantages of online banks that can be beneficial to you as a Nigerian
Because online banks don’t have to spend money on branch maintenance, they tend to have low or no fees. Online accounts don’t charge monthly service fees.
To compare, accounts at large brick-and-mortar banks often are charged various monthly service fees from account maintenance to SMS notification to card maintenance. The list can be endless.
Better interest rates on savings
Online banks tend to have higher annual percentage interest yields on savings, unlike traditional banks. Hometown offers the best interest rates on savings accounts of up to 12% per annum. Compare that with the savings rate of 4.2% for Nigerian banking institutions.
Standard bank services
Though online banks typically offer higher rates and lower fees, many still have basic banking features you can expect to find at traditional banks, including:
ATM Card Access
A good online bank will be part of an ATM network like Kuda.
24 Hours Customer service
You don’t need to worry about your complaint not being resolved. Online banks like Hometown have a responsive customer support team that responds and resolves complaints instantly without you having to worry about leaving your home to visit the bank.
Online banks operating in Nigeria must follow the best practices outlined by the banking industry.
High Level of Security
Online banks with standard security measures are just as safe as traditional banks. Look for features such as encryption and fraud monitoring. There are also measures you can take to ensure secure online banking, including avoiding public Wi-Fi networks and keeping anti-virus software up to date.
You can access your bank accounts and banking services wherever there’s internet — on your computer or mobile device — around the clock. You can also reach customer service by phone — in some cases, 24 hours a day, seven days a week.
Disadvantages of online banks
While there are some great benefits of using online banks, there are also a few disadvantage. Below are the cons of online banking you should also be aware of
No physical branches
With an online bank, prepare to have limited access to in-person help. Instead of face-to-face meetings, many banks offer phone-based customer service. Some banks offer assistance via social media and online chat, as well. This is a challenge to customers that are not tech savvy at all.
They do not accept cash deposits
Online banks often have cumbersome cash deposit processes. You might have to find a deposit-accepting ATM. Or you may need to put money into a traditional bank account and transfer it to your online account.
Fewer Account options options
Some online banks have outstanding savings account options but don’t offer much; for example, fixed deposit accounts, Joint accounts, and Corporate accounts are often not offered to customers. So you might have to open one type of account at one institution and a separate type of account at another.
Should you open an online bank account?
If you want higher interest rates and lower fees and hate to visit the banking hall like most of us, then an online bank like Hometown is what you need. However, if you still wish to retain your traditional account so you can access various account options, it’s ok. Either way, you can open a new online account in minutes with Hometown app, and have access to your accounts 24/7.