If you decide to use internet banking, you will be able to access your accounts, make payments, transfer money between accounts, view account statements and check your transaction history at the touch of a button in the comfort of your home.
In fact, the only transactionsyou cannot do through internet banking are make a cash withdrawal and cash and cheque deposits.
Getting started
In order to use internet banking, you will need to be able to access the internet on your computer. There are several ways to do this (see the story below entitled: "There are several ways to bank in cyberspace").
The four major banks - Absa, Standard Bank, First National Bank (FNB) and Nedbank - each have their own registration system for internet banking. However, all the banks require you to present your identity document (ID) and your account numbers.
If you choose to register through a call centre or online, you will also need to answer certain security questions related to your banking profile to verify that you are the account holder.
For example, if you bank with Nedbank, you can register for internet banking by either completing a profile form at a Nedbank branch, completing a form on the Nedbank website or by calling the Nedbank contact centre on 0860 115 060. In each case, you will be issued with a digital banking profile number and a temporary personal identification number (PIN), which must be changed to a permanent PIN within six days of registering.
You will need to use your profile number and PIN each time you log on to the Nedbank website to do your internet banking. Some banks require you to enter a user name and password to access your bank account on the internet.
What are the costs?
Internet banking is the cheapest way to bank. If you are using a bundle, such as Absa's Silver package (this includes a cheque card, credit card and overdraft facility), or if you are paying a fixed monthly fee for a set number of transactions (such as FNB's offer of R66 a month on a personal cheque account for unlimited electronic transactions), your monthly internet banking subscription fee is usually included in your monthly banking fee.
If you are using a pay-as-you-transact option, you may have to pay a monthly internet banking subscription fee, depending on who you bank with.
FNB does not charge a monthly subscription for electronic banking. At other banks, the monthly internet banking subscription fees vary from R19.95 to R22.80.
Itumeleng Monale, a director of self-service banking at Standard Bank, says once you pay the monthly subscription fee, internet banking transactions are free, unless you are on a pay-as-you-transact option. All the banks have reduced charges for electronic banking to encourage you to transact electronically.
Internet transactions
Once you have registered, your accounts will be linked to your internet banking and most internet banking websites will list all your bank accounts, including your current account, credit card, petrol card and mortgage loan, with the relevant balances for each account. You will be able to view account statements showing a transaction history for each account.
You can also nominate beneficiaries on your account for regular payments. These accounts will then be listed under "beneficiaries" and can include your rates account, clothing accounts and even your telephone accounts.
If you bank with FNB or Standard Bank, the beneficiary screen will also show you when the last payment was made to each beneficiary and what the amount was. This ensures you do not unintentionally pay an account twice in one month.
However, each bank also has an electronic banking agreement, with terms and conditions you must agree to before you start using online or internet banking.
These terms and conditions apply to all electronic banking mediums, including telephone banking and cellphone banking.
You must familiarise yourself with these terms and conditions before you choose to use internet banking to avoid any nasty surprises down the line.
For example, Standard Bank's electronic banking agreement states "you will not hold us liable if you execute the same instruction more than once and neither instruction will be reversible".
A pensioner customer of Standard Bank did not thoroughly read the electronic banking agreement and thought that the same rules that applied to his cheque account would apply to his internet banking.
In March he bought two return airline tickets to the United Kingdom for R20 000 on Nationwide Airlines. The instruction went through twice and his account was debited for R40 000. Standard Bank referred him to its electronic banking agreement and would not reverse either transaction.
He was also unable to apply for a refund from Nationwide Airlines as the company has since gone into liquidation and he will now have to claim as a creditor.
There are several ways to bank in cyberspace
In order to do online banking, you will have to be able to access the internet through your personal computer. There are a number of ways in which you can do this.
Dial-up connection
The first is by using a dial-up connection using a modem. This is the original method that home computer users used to connect to the internet on a phone line.
Unless you have two telephone lines installed, you will not be able to connect to the internet and receive or make calls at the same time.
This is a very slow connection by today's standards because it handles only 56 kilobits per second (Kbps)- the rate of information you download from the internet on to your computer.
You also end up paying a fixed cost for every second you are connected to the internet, regardless of whether you are actually accessing any internet sites or downloading information.
Broadband variations
An alternative is broadband, a term for high-speed data transmission. Broadband technology provides faster connection to the internet than traditional dial-up technology.
The Independent Communications Authority of South Africa has defined "broadband" as any connection capable of transferring data at a speed of 256 Kbps or faster.
If you use broadband, one option is to pay a set monthly fee in return for a fixed amount of bandwidth ranging from 200 megabytes (MB) to three gigabytes (GB) or more.
If you only want to check emails and do your banking online, you will not need a large bandwidth.
There are different types of broadband connections:
- You can opt for Asymmetric Digital Subscriber Line (ADSL). ADSL allows you to achieve a high-speed internet connection through a standard phone line.
ADSL splits your phone line in two, allowing you to receive data connections to the internet and phone calls at the same time. However, this is a stable connection fixed to one point, which does not allow you much flexibility.
To use ADSL, you will need a working telephone line and you must live in an area where the telephone exchange has been enabled for ADSL. Most urban areas are enabled for ADSL.
Your ADSL connection can also run permanently, which means you can be online 24 hours.
You will need an ADSL modem and you will need to have a monthly subscription to an internet service provider.
- Your other option is a 3G card or 3G USB modem. 3G, or third generation, is the term used for the next generation of mobile communications systems.
These new systems enhance the services available on the internet today, offering you multimedia and internet access as well as access to video footage.
The 3G card looks like a credit card that plugs into the side of your laptop or computer. The 3G USB modem is a small oval-shaped device that has its own cable, which plugs into the USB port on your laptop or home computer.
The advantage of both these options is that they are mobile and you can access the internet wherever you are, without being restricted to your home or office.
Tricks that fraudsters often use
The first rule of internet security is never to do your internet banking at an internet café or on any unsecured computer that you are not familiar with, says Rorgani Padayachy, the manager of internet banking at Nedbank. You should use a computer only at a trusted location, such as your personal computer at home.
Fraud syndicates use a number of methods to commit fraud online:
- Phishing
is the most common type of online fraud. The fraudsters send you an email that will look as though it is from your bank. In the email, they ask you to confirm your personal details, such as your identity number and your PIN. Ironically, the email usually uses the pretext of preventing fraud to get you to disclose your details.
None of the banks will ask you to confirm your details by email or telephone, so an email of this nature should immediately put you on the alert. Do not respond to the email. Contact your bank and ask for an email address to which you can forward the hoax email.
- Spear phishing
is when criminals send out "detail confirmation" emails to a random group of people, in the hope that they can sucker one of them into falling for their ruse.
- Spoofing
is when fraudsters create a website that looks like your bank's website. They then send you an email that directs you to their fraudulent website and once you enter your details on that website, they are able to record your personal information and gain access to your accounts.
- Pharming
is similar to spoofing in that you are redirected from a legitimate website to a bogus website without your knowledge. Criminals change the numerical strings to redirect you to their website, even though you may have entered the correct website address. One way to avoid pharming is to ensure that you shop online only on websites with security certificates. This is usually indicated on the website by a small icon of a lock.
- Key-logging
software is most often used at internet cafés or can be sent to you as an email attachment. You should never open emails from someone you do not know because if you open the email, the attached key-logging software installs itself on your computer and captures the information about the keys you press when you bank or transact on the internet. Criminals can then use this information to access your bank account.
Ways to improve your online security
Most of the major banks offer internet banking clients free anti-virus software to limit their exposure to fraud.
When you bank online, you are required to use security measures including access passwords and/or a PIN that is different from your ATM PIN.
First National Bank customers automatically receive a "one-time PIN" , either by email or on their cellphone, each time they log on to do internet banking.
This PIN is valid for only one internet banking session and the PIN is requested when you carry out certain transactions.
You should never save your password onto your computer desktop or ask your computer to "remember this password" because this allows anyone with access to your computer to gain access to your bank accounts.
When you create an online password, make sure that it includes random numbers and alphabets. Don't use predictable sequences, such as your name and birthday date.
Always log off after you have finished your online banking session - do not simply close your browser window.
Make sure that the security software on your computer is correctly licensed and is up-to-date. If you are shopping online, make sure the website you are on has a valid security certificate.