The march toward a cash-free economy took a few steps backward with a decision by Maryland National Bank to discontinue a service that allowed customers to pay bills by telephone.
In letters to customers of the service, Maryland National said it did not have sufficient customer participation for the high-cost service. "As we tried to restore the company, we can't be in the business of offering unprofitable services," said Daniel Finney, a spokesman for the bank.
Maryland National, the state's largest bank, will discontinue the BankLine Money Manager service on Dec. 31 at 2 p.m. Finney said the service had only 6,500 customers, or only 2 percent of all of the bank's checking customers. This number remained stagnant despite various promotional efforts by the bank, he said.
Using the service, customers could pay bills by calling up a computer and then punching the buttons of a Touch-Tone phone. Money would be instantly transferred from the customer's account to that of the billing company.
Bill paying by phone was part of the overall trend toward the electronic transfer of funds, replacing the traditional use of paper. But while direct deposit of payroll checks and the use of automated teller machines are growing in acceptance, bill paying by phone has been a lackluster player.
A handful of large banks during the 1980s offered bill paying by phone. But one by one they dropped the service, leaving Maryland National, a subsidiary of MNC Financial Inc., the last bank in the state to offer it.
In fact, Maryland National in December 1986 had dropped its 6-year-old telephone bill-paying service. But it then inherited the system operated by Equitable Bank, which MNC acquired in early 1990.
The service generated very little revenue since the fee for the service was $2 or less a month.
"I think customers are conditioned to using checks," Finney said of consumer resistance to the service. He also said the service did not have any lag time between the moment a bill was paid and the moment that amount was deducted from a customer's account. That lag time, called the float, is sometimes used by a customer to add funds to an account to cover a check.