Banking through PCs soon may be profitable

November 04, 1994|By Andrew Leckey

You can bank on it.

Banking at home -- rather than the availability of hundreds of movies, interactive games or reference volumes -- could be the first profitable breakthrough on the information superhighway.

It all adds up: Americans pay 400 million bills daily because they have no choice. There are more than 30 million home computers in this country and, thus far, only about 300,000 are used to

accomplish basic banking chores.

Using technology to complete required tasks should take precedence in the long run over purely discretionary entertainment and information. Most importantly, a raft of providers -- either banks operating alone or in conjunction with computer businesses -- are convinced that bank customers are willing to pay for the convenience.

As of now, home-computer banking includes the widespread use of the touch-tone telephone. There's also the screen phone, which has a built-in small computer display and keyboard. Then there's the personal computer and modem, expected to gain popularity as sales of computers continue to rise. Fees charged for PC banking average $10 a month. The cost of required software varies among institutions and in some cases is free.

That's not all. Through alliances, organizations are gearing up for other possibilities such as interactive television and personal digital assistants.

With competition heating up for your bank-at-home dollars, compare rival services to see which meet your individual needs and are cost-effective. Many banks offer several bank-at-home options. No one's certain what the outcome of current competition will be, but everyone believes the time for home-computer banking has at last arrived.

"The fear of errors and security problems in home banking has been overplayed and isn't really any worse than you'd find in traditional transactions," said Gene DeRose, president of the New York-based Jupiter Communications Co. media and technology consulting firm. "I don't see anything available in home banking that isn't at least worth a try, since there isn't much expense, and you'd be amazed at how you can improve some efficiencies."

New offerings in home banking are growing rapidly:

* Chase Manhattan Bank, Chemical Bank, Citibank, Bank of America and other large institutions now offer true electronic home banking. Chase, whose Spectrum personal computer-based service didn't gain much of a following a decade ago, recently adopted Microsoft Corp.'s Money software permit access to its new service.

"When you sign up with us, you get our welcome kit that includes the user manual, legal information and a package of software in one really nice package," said Mark Burns, vice president of on-line services for Chase Manhattan.

Pam Cantleberry, a Prodigy Services Co. executive, points out that customers of 17 banks such as Chemical Bank and Wells Fargo for a monthly fee can "use their Prodigy to click on the bank icon and enter a code in order to transfer money, pay bills and send e-mail to customer service."

The consumer is also subject to regular Prodigy on-line fees. These banks permit home banking without Prodigy as well.

* Software giant Microsoft, which already had agreements with First Chicago, U.S. Bancorp and Michigan National to use its Microsoft Money to pay bills, announced it will spend $1.5 billion for Intuit, maker of the popular Quicken personal financial software. National Payment Clearinghouse, which charges banks fees to handle the electronic link with personal finance software, is an Intuit subsidiary. Microsoft intends to sell its Money software program to Novell Inc. to ease antitrust concerns.

* Block Financial Corp., a subsidiary of H&R Block, bought the software company MECA, publisher of the Managing Your Money software, and is writing specialized electronic versions of it for Citibank, NationsBank and Visa.

* MasterCard has aligned itself with the Checkfree Corp. bill payment firm to provide software that permits ATM functions and bill paying. Twelve banks are already operational. It is developing other services to allow members to use credit or ATM cards to access accounts through PCs or screen phones.

* Visa, which already offers touch-tone and screen phone services through its recently acquired U.S. Order subsidiary, will feature Managing Your Money software in its new PC product available to member banks.

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