Application of this technology to consumer transactions includes Automated Teller Machines (ATMs) found in banks and other convenient locations, Point of Sale Terminals (POS) used in retail establishments, preauthorized payments
of mortgages and other recurring bills, automatic deposits of employee paychecks, telephone transfer systems, and internet banking services using personal computers.
This article examines changes over time in consumers' access to, adoption of, and attitudes toward various forms of electronic banking (e-banking), including the use of automated teller machines (ATMs), debit cards, direct deposit, preauthorized payments, phone banking, online banking, smart cards, and prepaid cards.
And the use of direct deposit and preauthorized payments, together with the availability of financial services via telephone and computer, means that consumers can initiate most transactions 24 hours a day, from remote locations.
Or they may use preauthorized payments and phone or online banking as complementary means of paying bills.
Preauthorized payments allow consumers to have many types of bills paid automatically from their bank account--rent or mortgage, car payments, utility bills, or gym memberships, for example.
For example, the proportion of low- and moderate-income households using preauthorized payments more than doubled between 1999 and 2006.
Does their increased use of online banking, phone banking, and preauthorized payments mean that low-and moderate-income consumers are better off?
A notable exception is the use of phone banking and preauthorized payments: a substantially smaller proportion of "other" consumers (predominantly Asians, Pacific Islanders, and Native Americans) reported banking by phone in 2006 compared with previous surveys, and a substantially larger proportion of this group reported using preauthorized payments.
For example, they might point out that using preauthorized payments ensures that bills are paid on time, thus eliminating late fees.
For example, the proportion of older consumers using ATMs and preauthorized payment doubled from 1999 to 2006, the proportion using phone banking tripled, and the proportion using online banking increased tenfold.
Once consumers have signed up for direct deposit, online banking, or preauthorized payment, they may perceive the transition costs involved in switching banks--in terms of both time and mental energy--as quite high.