Net banking vs mobile banking: Which one is better?

Several mobile banking apps, such as SBI's YONO, ICICI Bank's iMobile and HDFC's MobileBanking, have made bank transactions easier today. However, mobile apps such as UPI-backed Google Pay and PhonePe are preferred for online transactions these days.

Even when such digital apps have made banking easy and convenient, customers should not overlook the hidden pitfalls. The widespread use of mobile apps has raised questions about whether internet banking is losing its importance.

Net banking vs mobile banking
Net banking refers to transactions carried out using a desktop or laptop by connecting to the bank's official website via the internet. This is also known as online banking, e-banking, and internet banking. A customer can avail banking services by registering for internet banking and using the customer ID and password provided. It offers additional security by sending an OTP to the registered mobile phone number.

Mobile banking, as the term implies, is carried out using a mobile phone. It uses the bank's own app or the apps provided by aggregators, such as Google Pay, to facilitate transactions. However, only certain transactions can be carried out through mobile banking, while net banking allows almost all banking services.

Charge for UPI
Reports indicate that a certain fee should be paid for UPI transactions, which are currently carried out free of cost. The National Payment Corporation of India, the custodian of the UPI network, already charges banks 0.02 per cent as a switch fee. However, the service is free for the public.

Deliberations are underway to charge the public for UPI transactions. The ICICI Bank is already charging 2 paise for every ₹100 transacted at the aggregator level. Additionally, the apps now display the recipient's name.

The app could be fake
Several people have been deceived after downloading fake apps from official platforms, such as the Google Play Store or Apple App Store. Recently, digital fraudsters scammed the users of a prominent bank's app, highlighting the risks associated with it. Phone security is limited compared to that provided by desktops or laptops. Hence, the user should ensure that the phone is secure and be alert against fraudulent apps.

Ideally, mobile apps should be used for transacting smaller amounts of money. Setting a limit for such transactions is highly recommended. Likewise, setting a limit to the balance in the bank account linked to the app is also advised. Such measures could help in limiting the loss, if it ever happens.

As mentioned earlier, net banking adheres to stringent measures and is generally considered safer than mobile banking apps.

Future portals
We are not far from when seamless banking services migrate to portals. We have already taken the first step towards adopting artificial intelligence, with virtual assistants and chatbots already answering customer queries. Soon, portals will offer real-time, advanced banking advice and solutions, leveraging the power of artificial intelligence. Internet banking is likely to become more relevant in the coming days, far more so than the excitement mobile banking apps are creating now.

Domain name for security
With the widespread use of online banking, cybercrimes have also increased in India. Fraudsters create clone websites of banking and financial institutions to con customers. The Reserve Bank of India has now recommended a new domain name to prevent phishing. The central bank has instructed all banks and net banking websites to add the domain names bank.in and fin.in, as well as those of non-banking financial institutions.

Although the domain name change has been in place since April, the RBI has extended the deadline until October 31 to implement the change. This will reassure the customer that they have reached the official website of an Indian bank or financial institution, where they can carry out transactions.
(The author is a columnist and consultant with the World Bank.)