Online banking, also known as 

internet banking, web banking or home

banking, is an electronic payment system that enables customers of
a bank or other financial institution to conduct a range of financial
transactions through the financial institution's website. The online banking
system will typically connect to or be part of the core banking system operated
by a bank to provide customers access to banking services in addition to or in
place of traditional branch banking. Online banking significantly reduces the
banks' operating cost by reducing reliance on a branch network and offers
greater convenience to some customers by lessening the need to visit a
branch bank as well as the convenience of being able to perform banking
transactions even when branches are closed. Internet banking provides
personal and corporate banking services offering features such as viewing
account balances, obtaining statements, checking recent transactions,
transferring money between accounts, and making payments.
Some banks operate as a "direct bank", where they operate entirely via the
internet or internet and telephone. They are different from "neobanks", which
don't have depositary insurance.

History[edit]
Precursors[edit]
The precursor to the modern online banking services was distance banking
electronically and by telephone since the early 1980s. The term 'online'
became popular in the late 1980s and referred to the use of a terminal,
keyboard, and TV or monitor to access the banking system using a phone
line. 'Home banking' can also refer to the use of a numeric keypad to send
tones down a phone line with instructions to the bank.
Emergence of computer banking[edit]

A 1985 AT&T Home Banking console.

The first home banking service was offered to consumers in December 1980
by United American Bank, a community bank with headquarters in Knoxville,
Tennessee. United American partnered with Radio Shack to produce a secure
custom modem for its TRS-80 computer that allowed bank customers to
access their account information securely. Services available in its first years
included bill pay, account balance checks, and loan applications, as well as
game access, budget and tax calculators and daily newspapers. Thousands of
customers paid $25–30 per month for the service.[1]
Large banks, many working on parallel tracks to United American, followed in
1981 when four of New York's major banks (Citibank, Chase
Manhattan, Chemical Bank, and Manufacturers Hanover) offered home
banking services,[2][3] using the videotex system. Because of the commercial
failure of videotex, these banking services never became popular except in
France (where millions of videotex terminals (Minitel) where given out by the
telecom provider) and the UK, where the Prestel system was used.
The first videotext banking service in France was launched on December 20,
1983, by CCF Bank (now part of HSBC). Videotext online Banking services
eventually reached 19% market share by 1991[4]
The developers of United American Bank's first-to-market computer banking
system aimed to license it nationally, but they were overtaken by competitors
when United American failed in 1983 as a result of loan fraud on the part of
bank owner Jake Butcher, the 1978 Tennessee Democratic nominee for
governor and promoter of the 1982 Knoxville World's Fair. First Tennessee
Bank, which purchased the failed bank, did not attempt to develop or
commercialize the computer banking platform.[1]
Internet and customer reluctance and banking[edit]
When the clicks-and-bricks euphoria hit in the late 1990s, many banks began
to view web-based banking as a strategic imperative.[5] In 1996 OP Financial
Group, a cooperative bank, became the second online bank in the world and
the first in Europe.[6] The attraction of online banking is fairly obvious:
diminished transaction costs, easier integration of services, interactive
marketing capabilities, and other benefits that boost customer lists and profit
margins. Additionally, online banking services allow institutions to bundle more
services into single packages, thereby luring customers and minimizing
overhead.
In 1995, Wells Fargo was the first U.S. bank to add account services to its
website, with other banks quickly following suit. That same year, Presidential
became the first U.S. bank to open bank accounts over the internet. According
to research by Online Banking Report, at the end of 1999 less than 0.4% of
households in the U.S. were using online banking. At the beginning of 2004,
some 33 million U.S. households (31%) were using some form of online
banking. Five years later, 47% of Americans used online banking, according
to a survey by Gartner Group. Meanwhile, in the UK online banking grew from
63% to 70% of internet users between 2011 and 2012.[7]
By 2018, the number of digital banking users in the U.S. reached
approximately 61 percent.[8] The penetration of online banking in Europe has
been increased as well. In 2019, 93 percent of the Norwegian population
access online banking sites, which is the highest in Europe, followed by
Denmark and Netherlands.[9] Across Asia, more than 700 million consumers
are estimated to use digital banking regularly, according to a 2015 survey
by McKinsey and Company.[10]
By 2000, 80% of U.S. banks offered e-banking. Customer use grew slowly. At
Bank of America, for example, it took 10 years to acquire 2 million e-banking
customers. However, a significant cultural change took place after
the Y2K scare ended.
In 2001, Bank of America became the first bank to top 3 million online banking
customers, more than 20% of its customer base.[11] In comparison, larger
national institutions, such as Citigroup claimed 2.2 million online relationships
globally, while J.P. Morgan Chase estimated it had more than 750,000 online
banking customers. Wells Fargo had 2.5 million online banking customers,
including small businesses. Online customers proved more loyal and
profitable than regular customers. In October 2001, Bank of America
customers executed a record 3.1 million electronic bill payments, totaling more
than $1 billion. As of 2017, the bank has 34 million active digital accounts,
both online and mobile.[11] In 2009, a report by Gartner Group estimated that
47% of United States adults and 30% in the United Kingdom bank online.[12]
The early 2000s saw the rise of the branch-less banks as internet only
institutions. These internet-based banks incur lower overhead costs than their
brick-and-mortar counterparts. In the United States, deposits at some direct
banks are FDIC-insured and offer the same level of insurance protection as
traditional banks. Neobanks are branch-less banks in the United States which
are not FDIC-insured.
First online banking services by region[edit]
The United Kingdom[edit]
Online banking started in the United Kingdom with the launch of Nottingham
Building Society (NBS)'s Homelink service in September 1982, initially on a
restricted basis, before it was expanded nationally in 1983.[13] Homelink was
delivered through a partnership with the Bank of Scotland and British
Telecom's Prestel service.[14] The system used Prestel viewlink system and a
computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected
to the telephone system and television set. The system allowed users to
"transfer money between accounts, pay bills and arrange loans... compare
prices and order goods from a few major retailers, check local restaurant
menus or real estate listings, arrange vacations... enter bids in Homelink's
regular auctions and send electronic mail to other Homelink users."[14] In order
to make bank transfers and bill payments, a written instruction giving details of
the intended recipient had to be sent to the NBS who set the details up on the
Homelink system. Typical recipients were gas, electricity and telephone
companies and accounts with other banks. Details of payments to be made
were input into the NBS system by the account holder via Prestel. A cheque
was then sent by NBS to the payee and an advice giving details of the
payment was sent to the account holder. BACS was later used to transfer the
payment directly.
The United States[edit]
In the United States in-home banking was "is still in its infancy" with banks
"cautiously testing consumer interest" in 1984, a year after online banking
went national in the UK.[14] At the time Chemical Bank in New York was "still
working out the bugs from its service, which offers somewhat limited features".
[14]
 The service from Chemical, called Pronto, was launched in 1983 and was
aimed at individuals and small businesses. It enabled them to maintain
electronic checkbook registers, see account balances, and transfer funds
between checking and savings accounts. The other three major banks
— Citibank, Chase Bank and Manufacturers Hanover — started to offer home
banking services soon after. Chemical's Pronto failed to attract enough
customers to break even and was abandoned in 1989. Other banks had a
similar experience.
Since it first appeared in the United States, online banking has been federally
governed by the Electronic Funds Transfer Act of 1978.
France[edit]
After a test period with 2,500 users starting in 1984, online banking services
were launched in 1988, using Minitel terminals that were distributed freely to
the population by the government. By 1990, 6.5 million Minitels were installed
in households. Online banking was one of the most popular services.
Online banking services later migrated to the Internet.
Japan[edit]
In January 1997, the first online banking service was launched by Sumitomo
Bank.[15] By 2010, most major banks implemented online banking services,
however, the types of services offered varied.[15] According to a poll conducted
by Japanese Bankers Association (JBA) in 2012, 65.2% were the users of
personal internet banking.[15]
China[edit]
In January 2015, WeBank, the online bank created by Tencent, started 4-
month-long online banking trail operation.[16]
Australia[edit]
In December 1995, Advance Bank acquired by St.George Bank, started to
provide customers with online banking with the rollout of the C++ Internet
banking program.[17]
India[edit]
In 1998, ICICI Bank introduced internet banking to its customers.[18]
Brazil[edit]
In 1996, Banco Original SA launched its online-only retail banking.[19] In 2019
new banks began to emerge as the Conta Simples, focused only for
companies.[20]
Slovenia[edit]
Virtual or online banking became a reality in Slovenia in 1997, when SKB
bank launched this service under the name of SKB Net. Two years later, they
were followed by the largest Slovenian bank, NLB bank, who started offering
online banking services in 1999 under the name of NLB Klik. Nowadays,
actually every bank in Slovenia is offering online banking services. The
Slovenian Central bank's data shows that there was a rise of 5,1% in 2017
from the previous year and the number almost doubled from more than ten
years ago. At the end of 2019, the number of users was almost 1 million. The
number of payments is around 26 million per quarter, which means that there
are more than 100 million payments made online in Slovenia every year, and
another 3 million made to offshore accounts. Data from the Slovenian Central
bank also show that the total value of payments in 2017 reached more than
€240 million. More than 900,000 use online banking in Slovenia[21]
Canada[edit]
Virtual banking first became a possibility in 1996 with the Bank of Montreal's
mbanx. mbanx was released at the very beginning of the internet banking
revolution in Canada and was the first full-service online bank [22] Also in 1996,
RBC started providing banking information online and had the first personal
computer banking software released that year[22]
In 1997, the bank ING Direct Canada (now known as Tangerine Bank) was
founded with almost entirely online banking using only small cafes for
meetings and very few physical branches.[23] This was completely different
from how banks had operated in Canada previously. By the early 2000s, all of
the major banks in Canada rolled out some form of online banking.
Ukraine[edit]
Remote customer service of banks via the internet or Online banking (e-
banking) in Ukraine was introduced more than two decades ago. Legal entities
have been using the remote control of bank accounts since the mid-1990s.
PrivatBank, which launched the “Privat24” system in 2000, became a pioneer
in retail online banking.[24]
Since 2000, most financial institutions have been actively implementing online
offices and web banking. 2007 - the number of Ukrainian banks that
introduced Online Banking exceeded 20. 2018 - the ability to manage
accounts and make transfers online is available in almost all financial
institutions in Ukraine.
Nowadays, the list of Internet banking services, with rare exceptions, repeats
the entire product line of banks. With the help of Internet banking (IB), you can
not only control the movement of funds in their accounts, but also perform
more complex operations: for example, order a payment card or open a
deposit account, repay the loan, and recently it became possible to buy and
sell currency.[25]
The rapid development of Internet banking in Ukraine is provoking the growth
of Internet users. It is important to mention that the largest functionality, more
than 40 options - from transfers and opening deposits to home accounting and
purchasing tickets are available in PrivatBank. There are 37 options in the
Internet banking system of the First Ukrainian International Bank, 35 - in Alfa-
Bank. One of the most popular services in which Internet banking users are
interested in the ability to pay remotely for utilities.[26]
Νorth Macedonia[edit]
Compared to several years ago, when the people living in Macedonia had to
go directly to the banks to perform financial transactions, today there is a
widely functional e-banking system. Macedonian banks today offer
conventional e-banking services, electronic products including debit/credit
cards and e-trading and contemporary electronic services like internet banking
and online investing. What is important when it comes to e-banking is the trust
in banks, usability of the platforms and the overall marketing for e-banking
from banks. Moreover, it's also important to constantly update the e-banking
services. One successful example regarding the above-mentioned
characteristics in Macedonia is “Stopanska Banka” AD Skopje. In the country,
several factors significantly influence the level of adoption and usage of e-
banking services, such as age, level of education and complexity of the e-
banking services offered by banks. Naturally, elderly clients use e-banking
services less than younger people. In addition, the level of education has a
significant influence on the level of usage, meaning that the higher the
education level, the more likely is for the citizen to use e-banking services. As
for the satisfaction, citizens are generally more satisfied with the e-banking
services offered by various banks when they have a diverse portfolio of
services and offer fast and simple completion of transactions.[27]
Cook Islands[edit]
The Bank of the Cook Islands introduced online banking in 2015, under the
leadership of Vaine Nooana-Arioka.[28]

Operation[edit]
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To access a bank and online banking facility, a customer with internet access
will need to register with the bank for the service, and set up a password and
other credentials for customer verification. The customer visits the financial
institution's secure website, and enters the online banking facility using the
customer number and credentials previously set up.
Each financial institution can determine the types of financial transactions
which a customer may transact through online banking, but usually includes
obtaining account balances, a list of recent transactions, electronic bill
payments, financing loans and funds transfers between a customer's or
another's accounts. Most banks set limits on the amounts that may be
transacted, and other restrictions. Most banks also enable customers to
download copies of bank statements, which can be printed at the customer's
premises (some banks charge a fee for mailing hard copies of bank
statements). Some banks also enable customers to download transactions
directly into the customer's accounting software. The facility may also enable
the customer to order a cheque book, statements, report loss of credit cards,
stop payment on a cheque, advise change of address and other routine
actions.
Some financial institutions offer special internet banking services, for example,
Personal financial management support, such as importing data into personal
accounting software. Some online banking platforms support account
aggregation to allow the customers to monitor all of their accounts in one
place whether they are with their main bank or with other institutions.

Security[edit]

Five security token devices for online banking

Security of a customer's financial information is very important, without which
online banking could not operate. Similarly the reputational risks to banks
themselves are important.[7] Financial institutions have set up various security
processes to reduce the risk of unauthorized online access to a customer's
records, but there is no consistency to the various approaches adopted.
The use of a secure website has been almost universally embraced.
Though single password authentication is still in use, it by itself is not
considered secure enough for online banking in some countries. There are
essentially two different security methods in use for online banking:
 The PIN/TAN system where the PIN represents a password, used
for the login and TANs representing one-time passwords to
authenticate transactions. TANs can be distributed in different ways,
the most popular one is to send a list of TANs to the online banking
 user by postal letter. Another way of using TANs is to generate them
by need using a security token. These token generated TANs
depend on the time and a unique secret, stored in the security token
(two-factor authentication or 2FA).
More advanced TAN generators (chipTAN) also include the transaction
data into the TAN generation process after displaying it on their own
screen to allow the user to discover man-in-the-middle attacks carried
out by Trojans trying to secretly manipulate the transaction data in the
background of the PC.[29]
Another way to provide TANs to an online banking user is to send the
TAN of the current bank transaction to the user's (GSM) mobile phone
via SMS. The SMS text usually quotes the transaction amount and
details, the TAN is only valid for a short period of time. Especially in
Germany, Austria and the Netherlands many banks have adopted
this "SMS TAN" service.[30] There is also "PhotoTAN" service, where the
bank generates and sends a QR code image to a smartphone device of
the online banking user.[31]
Usually online banking with PIN/TAN is done via a web browser using
SSL secured connections, so that there is no additional encryption
needed.[32]
 Signature based online banking where all transactions are
signed and encrypted digitally. The Keys for the signature
generation and encryption can be stored on smartcards or
any memory medium, depending on the concrete
implementation (see, e.g., the Spanish ID card DNI
electrónico[33]).
Attacks[edit]
Attacks on online banking used today are based on deceiving the
user to steal login data and valid TANs. Two well known examples
for those attacks are phishing and pharming. Cross-site
scripting and keylogger/Trojan horses can also be used to steal
login information.[citation needed]
A method to attack signature based online banking methods is to
manipulate the used software in a way, that correct transactions are
shown on the screen and faked transactions are signed in the
background.[citation needed]
Another kind of attack is the so-called man-in-the-browser attack, a
variation of the man-in-the-middle attack where a Trojan
horse permits a remote attacker to secretly modify the destination
account number and also the amount in the web browser.[citation needed]
A 2008 U.S. Federal Deposit Insurance Corporation Technology
Incident Report, compiled from suspicious activity reports banks file
quarterly, lists 536 cases of computer intrusion, with an average
loss per incident of $30,000. That adds up to a nearly $16-million
loss in the second quarter of 2007. Computer intrusions increased
by 150 percent between the first quarter of 2007 and the second. In
80 percent of the cases, the source of the intrusion is unknown but it
occurred during online banking, the report states.[34]
In 2014 in the UK, losses from online banking fraud rose by 48%
compared with 2013.[35] According to a study by a group of
Cambridge University cybersecurity researchers in 2017, online
banking fraud has doubled since 2011.[36]
As of 2012 there were also combined attacks
using malware and social engineering to persuade the user himself
to transfer money to the fraudsters on the ground of false claims
(like the claim the bank would require a "test transfer" or the claim a
company had falsely transferred money to the user's account and
he should "send it back").[37][38]
Countermeasures[edit]
There exist several countermeasures which try to avoid attacks.
Whatever operating system is used,[39] it is advised that the
operating system is still supported, and properly patched.[40]
Digital certificates are used against phishing and pharming, in
signature based online banking variants (HBCI/FinTS) the use of
"Secoder" card readers is a measurement to uncover software side
manipulations of the transaction data.[41]
In 2001, the U.S. Federal Financial Institutions Examination
Council issued guidance for multifactor authentication (MFA) and
then required to be in place by the end of 2006.[42]
In 2012, the European Union Agency for Network and Information
Security advised all banks to consider the PC systems of their users
being infected by malware by default and therefore use security
processes where the user can cross-check the transaction data
against manipulations like for example (provided the security of the
mobile phone holds up) SMS TAN where the transaction data is
sent along with the TAN number or standalone smartcard readers
with an own screen including the transaction data into the TAN
generation process while displaying it beforehand to the user
(see chipTAN) to counter man-in-the-middle attacks.[43]

Criticism and problems[edit]

The increase in online banking with a concomitant closure of local
bank branch offices or reduced retail opening hours discriminates
against people who cannot use online banking, for physical or
mental limitations like age, or illness.
 In 2022, a retired Spanish urologist with Parkinson's
disease gathered more than 600,000 signatures in an online petition
asking banks and other institutions to serve all citizens, and not
discriminate against the oldest and most vulnerable members. In
Spain, the number of bank branches had shrunk to about 20,000 in
19 years since the bailout of 2012 and with the Coronavirus
pandemic another 3000 branches closed in 2 years.[44] "They are
excluding those of us who have trouble using the internet."[45] In
February 2022, Spanish banks signed a protocol at the Ministry of
Economy (Spain) pledging to offer better customer services to
senior citizens, for example by "extending again their branch
opening hours, giving priority to older people to access counters and
simplifying the interface of their apps and web pages".[44]
With online banking, race discrimination is even less likely to be
pinpointed, because of intransparent decision-making by algorithms.
[46]

Online banking requires robust, stable and affordable access to

broadband services. However, there is evidence that not everyone
has equal access in a given country and community, which has
been called digital divide. In March 2022, the U.S. Federal
Communications Commission formed a task force to prevent digital
discrimination.[47]

Contactless payment

Contactless payment systems are credit cards and debit cards, key

fobs, smart cards, or other devices, including smartphones and other mobile
devices, that use radio-frequency identification (RFID) or near-field
communication (NFC, e.g. Samsung Pay, Apple Pay, Google Pay, Fitbit Pay,
or any bank mobile application that supports contactless) for making secure
payments. The embedded integrated circuit chip and antenna enable
consumers to wave their card, fob, or handheld device over a reader at
the point of sale terminal. Contactless payments are made in close physical
proximity, unlike other types of mobile payments which use broad-area cellular
or WiFi networks and do not involve close physical proximity.
EMV is a common standard used by major credit card and smartphone
companies for use in general commerce. Contactless smart cards that
function as stored-value cards are becoming popular for use as transit
system farecards, such as the Oyster card or RioCard. These can often store
non-currency value (such as monthly passes), in additional to fare value
purchased with cash or electronic payment.
Tokenisation is a newer concept of encapsulating a card issuers details within
a hardware device application such as via Apple Pay app on iPhones.

Some suppliers claim that transactions can be almost twice as fast as a

conventional cash, credit, or debit card purchase. Because
no signature or PIN verification is typically required, contactless
purchases are usually limited to small value sales. Lack of
authentication provides a window during which fraudulent
purchases can be made while the card owner is unaware of the card's
loss. Major financial institutions and multinational corporations now
offer contactless payment systems to customers as contactless credit
cards have become widespread in the U.S., U.K., Japan, Germany,
Canada, Australia, France, the Netherlands, etc., as consumers are likely
to spend more money using their cards due to the ease of small
transactions. With contactless cards growing in numbers and
percentages of adoption, the number of payments by this method had
increased significantly since the spending limit was raised. Purchases
made by card now surpass those made by cash and account for
approximately one-third of all card transactions in countries like the UK.
[citation needed]
 Contactless payments specifically have become increasingly
popular, accounting for 4 out of 5 point-of-sale purchases in Australia as
of 2019.[1] Card issuers indicate that they will increase the availability of
contactless cards to consumers. There are over 58 million contactless-
enabled cards and over 147,000 terminals in use in the UK alone,
[
 estimated that there would be 300 million contactless cards issued in
the US by the end of 2020, up from the predicted 100 million at the end of
2019.[ History[edit]
1990s—2000s[edit]
Mobil was one of the most notable early adopters of a similar technology, and
offered their "Speedpass" contactless payment system for
participating Mobil gas stations as early as 1997. Although Mobil has since
merged with Exxon, the service is still offered at many of ExxonMobil's
stations. Freedompay also had early wins in the contactless space with Bank
of America[2] and McDonald's.[3]
In 2002, Philips teamed up with Sony to elaborate the NFC standard.[4]
[5]
 Then Philips Semiconductors applied for the six fundamental patents of
NFC, invented by the Austrian and French engineers Franz Amtmann and
Philippe Maugars who received the European Inventor Award in 2015.[6]
In July 2004, Sony, who had implemented the contactless RFID smart
card FeliCa in Japan, introduced the Osaifu-Keitai (おサイフケータイ) system
(literal translation: "wallet-phone") developed with the mobile phone
operator NTT DoCoMo on multiple FeliCa systems such as Edy and, on 28
January 2006, on Mobile Suica used primarily on the railway networks owned
by JR East.[7]
In May 2005, after some experimentation in the Netherlands, the contactless
deferred payment at the end of each month, after the registration of the trips
aboard with a contactless mobile phone on the client's account, was first
experimented in Germany during 6 months on the tramways and bus
of Hanau with the Nokia 3220 using the NFC standard of Philips and Sony.[8]
In October 2005, the immediate contactless payment was first experimented
in France in Caen during 6 months with
a Samsung NFC smartphone by Orange in collaboration with Philips
Semiconductors in the Cofinoga shops (Galeries Lafayette, Monoprix)
and Vinci parkings. For the first time, thanks to "Fly Tag", the system allowed
to receive as well audiovisual informations, like bus timetables or cinema
trailers from the concerned services.[7][5] In June 2007, the payment with a
contactless bank card was tested at the FNAC of La Défense in Paris and
from 19 November 2007 to 2009 in some shops of Caen and Strasbourg, this
time with smartphones NFC, provided by four operators (Orange, Bouygues
Telecom, SFR and NRJ Mobile).[5] On 5 November 2007, Orange and the
transport societies SNCF and Keolis associated themselves for a 2 months
experimentation with smartphones in Rennes in the metro, bus and TER
trains.[9][5]
The first contactless cards in the UK were issued by Barclaycard in
September 2007.[10] PayPass trialed the world's first NFC-enabled phone,
the Nokia 6131 NFC, in New York in 2007.[11]
In March 2008, Eat became the first restaurant chain to adopt contactless.[12]
On 19 January 2009, NFC is used in transports for the first time in the world
by China Unicom and Yucheng Transportation Card with Changhong DG28
and F4 mobile phones in the tramways and bus of Chongqing in China.[13]
2010s[edit]
In January 2010, Barclaycard partnered with mobile phone firm Orange, to
launch a contactless credit card in the UK.[14] Orange and Barclaycard also
announced in 2009 that they would be launching a mobile phone with
contactless technology.[15]
After a test conducted from October 2005 to November 2006 with 27 users,
[16]
 on 21 May 2010, the transport authority of Nice Régie Lignes d'Azur was
the first public transport provider in Europe to add definitely to its own offer a
contactless payment on its tramways and bus network either with a NFC bank
card or smartphone application notably on Samsung Player One (with the
same mobile phone operators than in Caen and Strasbourg in 2007), as well
as the validation aboard with them of the transport titles and the loading of
these titles onto the smartphone, in addition to the season tickets contactless
card.[17] This service was as well experimented then respectively implemented
for NFC smartphones on 18 and 25 June 2013 in the tramways and bus
of Caen[18][19] and Strasbourg.,[20][21] after the contactless payment on the 765
pay and display parking machines of Strasbourg was made available in
October 2011. In the Paris transport network, after a 4 months testing from
November 2006 with Bouygues Telecom and 43 persons[16] and finally with
8,000 users from July 2018, the contactless mobile payment and direct
validation on the turnstile readers with a smartphone was adopted on 25
September 2019[22][23][24] in collaboration with the societies Orange, Samsung,
Wizway Solutions, Worldline and Conduent.
NFC is used in Seoul[25] after its introduction in Korea by the discount
retailer Homeplus in March 2010[26] and in Tokyo it is tested then adopted or
added to the existing systems, like the mobile wallet Osaifu-Keitai, from May
2010 to end of 2012.[27][28] The NFC standard is implemented for the first time
in a metro network, by China Unicom in Beijing on 31 December 2010.[29]
In October 2011, the first mobile phones with Mastercard PayPass and/or Visa
payWave certification appeared. A PayPass or payWave account can be
assigned to the embedded secure element and/or SIM card within the phones.
In October 2013, Citi Enterprise Payments and 3 Hong Kong, the mobile
operation of Hutchison Telecommunications Hong Kong Holdings Limited
(SEHK: 215), jointly announced the launch of ‘3 Citi Wallet.’ Using Near Field
Communication (NFC) technology, the '3 Citi Wallet' was a multi-purpose
mobile wallet service that included mobile payment, transaction history, a
location-based special offer service and a search function that directed
customers to the best deals within their vicinity. The 3Citi wallet was
compatible with a wide range of designated smartphones, from Samsung,
Sony, HTC, LG and iPhone. Over 9,000 Visa payWave readers across Hong
Kong were able to accept contactless payments on Day 1.[30]
In February 2014, Mastercard announced that it would partner with Weve,
which is a joint venture between EE, Telefónica UK, and Vodafone UK, to
focus on mobile payments. The partnership will promote the development of
"contactless mobile payment systems" by creating a universal platform in
Europe for it.[31]
On 9 September 2014, Apple Inc. announced Apple Pay, a proprietary form of
contactless payment integrated with its smartphones, with the release of
the iPhone 6.[32]
In September 2014, Transport for London's Tube began accepting contactless
payment. TFL are claiming that they pushed the banking industry to develop
the contactless system. See the tv programme Secrets of the London
Underground Series 2 Episode 9 (around minute 58).The number of
completed contactless journeys has now exceeded 300m. On Friday 18
December, the busiest single day in 2015, a record 1.24m journeys were
completed by over 500k unique contactless cards.[33]
In 2016 Erste Group launched an NFC-only debit card implemented as a
sticker in Austria. It can be used at any NFC supporting terminal for
transactions of unlimited amount however for transactions over the floor limit
of €25 a PIN is required to confirm the transaction.[34]
In 2016, contactless payments start to become even broader with wearable
technology devices also offering this payment feature.
2020s[edit]

A Transport for London bus stop advertisement recommending contactless

payment as safe during the COVID-19 pandemic.
During the COVID-19 pandemic,[35] several banks raised their contactless
payment limits.[36][37] In the United Kingdom, the limit was increased from £30
to £45 in March 2020.[38] Contactless payments were recommended as a safer
payment method compared to Chip and PIN card payments and cash
transactions.[39] It was later raised to £100. [40]

Adoption and usage[edit]

Google Pay is an application for devices running Google's Android OS, which
allows users to make purchases using NFC, which initially required a physical
secure element but this was replaced by host card emulation which was
introduced in Android 4.4 (KitKat). Softcard (formerly known as Isis mobile
wallet), Cityzi and Quick Tap wallets for example, use a secure SIM card to
store encrypted personal information. Contactless payments with enabled
mobile phones still occur on a small scale, but every month an increasing
number of mobile phones are certified.[41]
In 2012, Mastercard Advisors wrote that consumers are likely to spend more
money using their cards due to the ease of small transactions.
[42]
 Mastercard Canada says it has seen "about 25 percent" higher spending by
users of its Mastercard Contactless-brand RFID credit cards.[43]
As of December 2014, there were approximately 58 million contactless-
enabled cards in use in the UK, and over 147,000 terminals in use.[44][45] By
June 2017 purchases made by card surpassed those made by cash. This was
reported to have been driven by the rise in contactless payments, which
accounted for approximately one third of all card transactions in the UK. The
number of payments by this method had increased significantly since the
spending limit was raised from £20 to £30.[46] In 2018, contactless payments
made up around 19% of transactions in the UK.[47]
In 2018, the Westpac Banking Corporation in Australia revealed contactless
payment statistics from 2017 and claimed in the report that contactless
payments approached saturation point by being used in over 90% of
purchases. The Australian St.George Bank reported 94.6% usage for the
same period.[48]
Recent statements by Visa and other US card issuers indicate that they will
increase the availability of contactless cards to US consumers in the near
future. Visa estimates there will be 300 million contactless cards issued in the
US by the end of 2020, up from the predicted 100 million at the end of 2019 as
announced on its 2018 Q4 earnings call.[49]
Telecom operators are starting to get involved in contactless payments via the
use of NFC-enabled phones. Belgacom's Pingping, for example, has a stored
value account and via a partnership with Alcatel-Lucent's Touchatag provides
contactless payment functionalities.
Major financial entities now offering contactless payment systems
include Mastercard, China UnionPay, Citibank, JPMorgan Chase, American
Express, KeyBank, Barclays, Barclaycard, HSBC, Lloyds Banking
Group, FreedomPay, The Co-operative Bank, Nationwide Building
Society and NatWest Group. Visa payWave, American Express Expresspay,
and Mastercard Contactless are examples of contactless credit cards which
have become widespread in the U.S. and U.K.

Technology[edit]
There are two main standard usages for contactless payments adopted
throughout payment terminals with the EMV standard.
EMV Chip
On issued bank cards a smart chip or cryptographic chip is placed on the card
known as a smart card which allows wireless payments to be made from the
EMV chip in range of a payment terminal using RFID technology following
the EMVCo standard. When the smart card is tapped against a payment
terminal that authenticates the card issuer's details through a series of PIN
interactions the payment for the interaction will succeed.
Tokenisation
A newer approach to smart card technology is achieved by linking a smart
card to a hardware device, such as through the Apple Pay application on an
iPhone mobile phone, thereby allowing mobile devices the ability to make
payments using RFID technology against a payment terminal on behalf of a
smart card using a token generated by the card issuer, a process known as
tokenisation. A Device Account Number (DAN) similar to a Private Account
Number (PAN) in traditional payment stripe and chip cards, is generated along
with a private key and sent to the card issuer during initial setup of the smart
card on the hardware device. When payments are made via the respective
approved application on the hardware device the DAN and relevant details
such as expiry date and CVV are sent to the card issuer via a payment
terminal for cryptography where the associated private key is then used to
authorise the transaction.

Security[edit]
In 2006 security researchers found that the cardholder's name, credit card
number, and expiration date may be transmitted by contactless payment cards
without encryption. They were able to use information leaked from a
contactless credit card to make a purchase online, without opening the
envelope in which the card was sent.[50]
Depending on the economic space, there may be a payment limit on single
transactions without the need to input the PIN, and some contactless cards
can only be used a certain number of times before customers are asked for
their PIN.[51] Contactless debit and credit transactions use the same chip and
PIN network as older cards and are protected by the same fraud guarantees.
Where PIN is supported, the contactless part of the card may remain non-
functional until a standard chip and PIN transaction has been executed.[52] This
provides some verification that the card was delivered to the actual
cardholder.
Under fraud guarantee standards, U.S. banks are liable for any fraudulent
transactions charged to the contactless cards
Mobile banking
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Mobile banking is a service provided by a bank or other financial

institution that allows its customers to conduct financial transactions remotely
using a mobile device such as a smartphone or tablet. Unlike the
related internet banking it uses software, usually called an app, provided by
the financial institution for the purpose. Mobile banking is usually available on
a 24-hour basis. Some financial institutions have restrictions on which
accounts may be accessed through mobile banking, as well as a limit on the
amount that can be transacted. Mobile banking is dependent on the
availability of an internet or data connection to the mobile device.
Transactions through mobile banking depend on the features of the mobile
banking app provided and typically includes obtaining account balances and
lists of latest transactions, electronic bill payments, remote check
deposits, P2P payments, and funds transfers between a customer's or
another's accounts.[1] Some apps also enable copies of statements to be
downloaded and sometimes printed at the customer's premises. Using a
mobile banking app increases ease of use, speed, flexibility and also improves
security because it integrates with the user built-in mobile device security
mechanisms.[citation needed]
From the bank's point of view, mobile banking reduces the cost of handling
transactions by reducing the need for customers to visit a bank branch for
non-cash withdrawal and deposit transactions. Mobile banking does not
handle transactions involving cash, and a customer needs to visit an ATM or
bank branch for cash withdrawals or deposits. Many apps now have a remote
deposit option; using the device's camera to digitally transmit cheques to their
financial institution.
Mobile banking differs from mobile payments, which involves the use of a
mobile device to pay for goods or services either at the point of sale or
remotely,[2] analogously to the use of a debit or credit card to effect
an EFTPOS payment.

Contents

History[edit]
The earliest mobile banking services used SMS, a service known as SMS
banking. With the introduction of smart phones with WAP support enabling the
use of the mobile web in 1999, the first European banks started to offer mobile
banking on this platform to their customers.[3]
Mobile banking before 2010 was most often performed via SMS or the mobile
web. Apple's initial success with iPhone and the rapid growth of phones based
on Google's Android (operating system) have led to increasing use of
special mobile apps, downloaded to the mobile device. With that said,
advancements in web technologies such
as HTML5, CSS3 and JavaScript have seen more banks launching mobile
web based services to complement native applications. These applications
are consisted of a web application module in JSP such as J2EE and functions
of another module J2ME.[4]
A recent study (May 2012) by Mapa Research suggests that over a third of
banks[5] have mobile device detection upon visiting the banks' main website. A
number of things can happen on mobile detection such as redirecting to an
app store, redirection to a mobile banking specific website or providing a
menu of mobile banking options for the user to choose from.

A mobile banking conceptual[edit]

In one academic model,[6] mobile banking is defined as:
Mobile Banking refers to provision and availment of banking- and financial
services with the help of mobile telecommunication devices.The scope of
offered services may include facilities to conduct bank and stock market
transactions, to administer accounts and to access customised information."
According to this model mobile banking can be said to consist of three inter-
related concepts:
 Mobile accounting
 Mobile financial information services
Most services in the categories designated accounting and brokerage are
transaction-based. The non-transaction-based services of an informational
nature are however essential for conducting transactions – for instance,
balance inquiries might be needed before committing a money remittance.
The accounting and brokerage services are therefore offered invariably in
combination with information services. Information services, on the other
hand, may be offered as an independent module.
Mobile banking may also be used to help in business situations as well as for
financial situation

Mobile banking services[edit]

Typical mobile banking services may include:
Account information[edit]
1. Mini-statements and checking of account history
2. Alerts on account activity or passing of set thresholds
3. Monitoring of term deposits
4. Access to loan statements
5. Access to card statements
6. Mutual funds / equity statements
7. Insurance policy management
Transaction[edit]
1. Funds transfers between the customer's linked accounts
2. Paying third parties, including bill payments and third party fund
transfers(see, e.g., FAST)
3. Check Remote Deposit
Investments[edit]
1. Portfolio management services
 2. Real-time stock
Support[edit]
1. Status of requests for credit, including mortgage approval, and
insurance coverage
2. Check (cheque) book and card requests
3. Exchange of data messages and email, including complaint
submission and tracking
4. ATM Location
5. Loan Application
Content services[edit]
1. General information such as finance related news
2. Loyalty-related offers
A report by the US Federal Reserve (March 2012) found that 21 percent of
mobile phone owners had used mobile banking in the past 12 months.
[7]
 Based on a survey conducted by Forrester, mobile banking will be attractive
mainly to the younger, more "tech-savvy" customer segment. A third of mobile
phone users say that they may consider performing some kind of financial
transaction through their mobile phone. But most of the users are interested in
performing basic transactions such as querying for account balance and
making bill.

Challenge my mobile Number[buzzword][edit]

Key challenges in developing a sophisticated mobile banking application are :
Handset accessibility[edit]
There are a large number of different mobile phone devices and it is a big
challenge for banks to offer a mobile banking solution[buzzword] on any type of
device. Some of these devices support Java ME and others support SIM
Application Toolkit, a WAP browser, or only SMS.
Initial interoperability issues however have been localized, with countries like
India using portals like "R-World" to enable the limitations of low end java
based phones, while focus on areas such as South Africa have defaulted to
the USSD as a basis of communication achievable with any phone.
The desire for interoperability is largely dependent on the banks themselves,
where installed applications(Java based or native) provide better security, are
easier to use and allow development of more complex capabilities similar to
those of internet banking while SMS can provide the basics but becomes
difficult to operate with more complex transactions.
There is a myth that there is a challenge of interoperability between mobile
banking applications due to perceived lack of common technology standards
for mobile banking. In practice it is too early in the service lifecycle for
interoperability to be addressed within an individual country, as very few
countries have more than one mobile banking service provider. In practice,
banking interfaces are well defined and money movements between banks
follow the IS0-8583 standard. As mobile banking matures, money movements
between service providers will naturally adopt the same standards as in the
banking world.
In January 2009, Mobile Marketing Association (MMA) Banking Sub-
Committee, chaired by CellTrust and VeriSign Inc., published the Mobile
Banking Overview for financial institutions in which it discussed the
advantages and disadvantages of Mobile Channel Platforms such as Short
Message Services (SMS), Mobile Web, Mobile Client Applications, SMS with
Mobile Web and Secure SMS.[8]
Security[edit]
As with most internet-connected devices, as well as mobile-telephony
devices, cybercrime rates are escalating year-on-year. The types of
cybercrimes which may affect mobile-banking might range from unauthorized
use while the owner is using the mobile banking, to remote-hacking, or even
jamming or interference via the internet or telephone network data streams.
This is demonstrated by the malware called SMSZombie.A, which infected
Chinese Android devices. It was embedded in wallpaper apps and installed
itself so it can exploit the weaknesses of China Mobile SMS Payment system,
stealing banks credit card numbers and information linked to financial
transactions.[9] One of the most advanced malwares discovered recently was
the Trojan called Bankbot. It went past Google's protections in its Android app
marketplace and targeted Wells Fargo, Chase, and Citibank customers on
Android devices worldwide before its removal by Google in September 2017.
[10]
 This malicious app was activated when users opened a banking app,
overlaying it so it can steal banking credentials.[11]
See also: Mobile security
In the banking world, currency rates may change by the millisecond.
Security of financial transactions, being executed from some remote location
and transmission of financial information over the air, are the most
complicated challenges that need to be addressed jointly by mobile
application developers, wireless network service providers and the banks' IT
departments.
One-time passwords (OTPs) are one tool used by financial and banking
service providers in the fight against cyber fraud.[12] Instead of relying on
traditional memorized passwords, OTPs are requested by consumers each
time they want to perform transactions using the online or mobile banking
interface. When the request is received the password is sent to the
consumer's phone via SMS. The password is expired once it has been used
or once its scheduled life-cycle has expired.
Scalability and reliability[edit]
Another challenge for the CIOs and CTOs of the banks is to scale-up the
mobile banking infrastructure to handle exponential growth of the customer
base. With mobile banking, the customer may be sitting in any part of the
world (true anytime, anywhere banking) and hence banks need to ensure that
the systems are up and running in a true 24 × 7 fashion. As customers will find
mobile banking more and more useful, their expectations from the
solution[buzzword] will increase. Banks unable to meet the performance and
reliability expectations may lose customer confidence. There are systems
such as Mobile Transaction Platform which allow quick and secure mobile
enabling of various banking services. Recently in India there has been a
phenomenal growth in the use of Mobile Banking applications, with leading
banks adopting Mobile Transaction Platform and the Central Bank publishing
guidelines for mobile banking operations.
Application distribution[edit]
Due to the nature of the connectivity between bank and its customers, it would
be impractical to expect customers to regularly visit banks or connect to a web
site for regular upgrade of their mobile banking application. It will be expected
that the mobile application itself check the upgrades and updates and
download necessary patches (so called "Over The Air" updates). However,
there could be many issues to implement this approach such as upgrade /
synchronization of other dependent components.
Studies have shown that a huge concerning factor of having mobile banking
more widely used, is a banking customer's unwillingness to adapt. Many
consumers, whether they are misinformed or not, do not want to begin using
mobile banking for several reasons. These can include the learning curve
associated with new technology, having fears about possible security
compromises, just simply not wanting to start using technology, etc.
Personalization[edit]
It would be expected from the mobile application to support personalization
such as:
1. Preferred Language
2. Date / Time format
3. Amount format
4. Default transactions
5. Standard Beneficiary list
6. Alerts

Mobile banking in the world[edit]

See also: List of countries by mobile banking usage
This is a list of countries by mobile banking usage as measured by the
percentage of people who had non-SMS mobile banking transactions in the
previous three months. The data is sourced from Bain, Research Now and
Bain along with GMI NPS surveys in 2012.[13][14]
 Usag
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2012

1  South Korea 47%

2  China 42%

3  Hong Kong 41%

4  Singapore 38%

5  India 37%

6  Spain 34%

7  United States 32%

8  Mexico 30%

9  Australia 27%

10  France 26%

 United
11 26%
Kingdom

12  Thailand 24%

13  Canada 22%
 Usag
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2012

14  Germany 14%

15  Pakistan 9%

African nations such as Kenya would rank highly if SMS mobile banking were
included in the above list. Kenya has 38% of the population as subscribers to
M-Pesa as of 2011.[15] Though as of 2016 mobile banking applications have
seen a tremendous growth in Kenyan banking sector who have capitalised on
android play store and apple store to put their applications. Kenyan banks
like Equity Bank Kenya Limited Eazzy banking application and The Co-
operative Bank Mco-op cash application have proved to be a success mobile
banking applications.
Mobile banking is used in many parts of the world with little or no
infrastructure, especially remote and rural areas. This aspect of mobile
commerce is also popular in countries where most of their population
is unbanked. In most of these places, banks can only be found in big cities,
and customers have to travel hundreds of miles to the nearest bank.
In Iran, banks such as Parsian, Tejarat, Pasargad Bank, Mellat,
Saderat, Sepah, Edbi, and Bankmelli offer the service. Banco Industrial
provides the service in Guatemala. Citizens of Mexico can access mobile
banking with Omnilife, Bancomer and MPower
Venture. Kenya's Safaricom (part of the Vodafone Group) has the M-
Pesa Service, which is mainly used to transfer limited amounts of money, but
increasingly used to pay utility bills as well. In 2009, Zain launched their own
mobile money transfer business, known as ZAP, in Kenya and other African
countries. Several other players in Kenya such as
Tangerine, MobiKash and Funtrench Limited also have network-independent
mobile money transfer. In Somalia, the many telecom companies provide
mobile banking, the most prominent being Hormuud Telecom and
its ZAAD service.
Telenor Pakistan has also launched a mobile banking solution[buzzword], in
coordination with Taameer Bank, under the label Easy Paisa, which was
begun in Q4 2009. Eko India Financial Services, the business correspondent
of State Bank of India (SBI) and ICICI Bank, provides bank accounts, deposit,
withdrawal and remittance services, micro-insurance, and micro-
finance facilities to its customers (nearly 80% of whom are migrants or the
unbanked section of the population) through mobile banking.[16]
In a year of 2010, mobile banking users soared over 100 percent in Kenya,
China, Brazil and United States with 200 percent, 150 percent, 110 percent
and 100 percent respectively.[17]
Dutch Bangla Bank launched the first mobile banking service
in Bangladesh on 31 March 2011. This service is launched with 'Agent' and
'Network' support from mobile operators, Banglalink and Citycell. Sybase 365,
a subsidiary of Sybase, Inc. has provided software solution[buzzword] with their
local partner Neurosoft Technologies Ltd. There are around 160 million people
in Bangladesh, of which, only 13 per cent have bank accounts. With this
solution[buzzword], Dutch-Bangla Bank can now reach out to the rural and
unbanked population, of which, 45 per cent are mobile phone users. Under
the service, any mobile handset with subscription to any of the six existing
mobile operators of Bangladesh would be able to utilize the service. Under the
mobile banking services, bank-nominated Banking agent performs banking
activities on its behalf, like opening mobile banking accounts, providing cash
services (receipts and payments) and dealing with small credits. Cash
withdrawal from a mobile account can also be done from an ATM validating
each transaction by 'mobile phone & PIN' instead of 'card & PIN'. Other
services that are being delivered through mobile banking system are person-
to-person (e.g. fund transfer), person-to-business (e.g. merchant payment,
utility bill payment), business-to-person (e.g. salary/commission
disbursement), government-to-person (disbursement of government
allowance) transactions. One of the most recent mobile technological wonders
(Shaikh and Karjaluoto, 2015) and one of the most recent financial services
sector innovations which has added a pure mobility element to service
consumption (Mishra and Bisht, 2013; Oliveira et al., 2014) that in return
enabled customers to have a convenient access to different value-added
banking services is mobile banking (MB) or m-banking (Anderson, 2010). M-
banking is defined as “a feed where the consumer communicates with a bank
using a mobile device, such as a mobile phone or personal digital assistant. In
that sense, it can be seen as a subset of electronic banking and an extension
of internet banking with its own unique characteristics (Laukkanen & Pasanen,
2008). It is one of the newest approaches to the concern of financial services
through information computer technology (ICT), made possible by the
extensive adoption of mobile phones even in low income countries (Anderson,
2010). In May 2012, Laxmi Bank Limited launched the very first mobile
banking in Nepal with its product Mobile Khata. Mobile Khata currently runs on
a third-party platform called Hello Paisa that is interoperable with all the
telecoms in Nepal viz. Nepal Telecom, NCell, Smart Tel and UTL, and is also
interoperable with various banks in the country. The initial joining members to
the platform after Laxmi Bank Limited were Siddartha Bank, Bank of
Kathmandu, Commerz and Trust Bank Nepal and International Leasing and
Finance Company. In country with roughly 30 million population, over 5 million
have subscribed to mobile banking in Nepal[18] as per the recent data
from Nepal Rastra Bank,[19] the central bank of Nepal.
Barclays offers a service called Barclays Pingit, and Hello Money offering
services in Africa, allowing transfer of money from the United Kingdom to
many parts of the world with a mobile phone. Pingit is owned by a consortium
of banks. In April 2014, the UK Payments Council launched the Paym mobile
payment system, allowing mobile payments between customers of several
banks and building societies using the recipient's mobile phone number.[20] in
past some US research proved that in the United States, people focusing in
on adaptable banking (m-banking), this work contemplates responses from
three undeniable buyer parcels, including – 1) customers living in Egypt, 2)
purchasers from Egypt who are living in the U.S. in addition, 3) U.S.
customers. The conceptual model was developed by the technology
acceptance model (TAM), task-technology fit model (TTF), theory of planned
behavior model (TPB), the diffusion of innovation model (DOI).
In November 2017, the State Bank of India launched an integrated banking
platform in India called YONO offering conventional banking functions but also
payment services for things such as online shopping, travel planning, taxi
booking or online education.[21]
In January 2019, the German direct bank N26 overtook Revolut as the most
valuable mobile bank in Europe with a valuation of $2.7 billion and 1.5 million
users.[22][23]
Following is a list showing the share of people using mobile banking apps
during the last three months in selected countries worldwide in 2014. The list
is based on a survey conducted by statista.com including 82,914 respondents.
[24]

Usag
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2014

1  Indonesia 77%

2  China 73%

3  Thailand 64%

4  India 59%
 Usag
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e in
k Territory
2014

5  Singapore 58%

6  Poland 58%

7  Malaysia 54%

8  Hong Kong 49%

9  Australia 47%

10  Mexico 45%

11  Spain 44%

12  United States 43%

13  Italy 42%

 United
14 41%
Kingdom

15  Brazil 39%

16  Canada 34%
 Usag
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2014

17  Portugal 31%

18  France 30%

19  Belgium 27%

20  Germany 21%

21  Japan 19%