The 1997 American Banker/Gallup Consumer Survey shows that PC ownership is widespread among households with at least one bank account. Exactly half now own a PC compared to 48% last year. And 39% now have a PC and modem compared to 36% last year. Compared to last year, the biggest changes are in the area of Internet usage. A whopping 73% of PC owners have used the Internet, up from 59% last year. Surprisingly, 56% of PC owners have used the Internet for commerce (rather loosely defined as having bought something or requested info), more than double the 27% recorded last year. Online banking usage doubled to 12% of PC owners compared to 6% last year.

One area of concern is the decline in PC owners interested in PC banking, from 52% to 44%, likely an inevitable backlash from all the hype. Users actually experiencing the realities of the online medium show a decline in enthusiasm at least initially.

Usage of Direct Deposit, ATMs, and POS Debit (U.S.)

Usage of electronic banking services continue to grow though growth in direct deposit and ATM use will be slow. Bigger gains will be in telephone banking, POS debit card use, and of course online banking.

Last year capped a three-year surge in the installed base of ATMs in the United States that saw nearly 60,000 machines added. More than two decades since the first ATM was installed, widespread surcharging has finally made ATMs a measurable profit center.

number of ATMs and billions of transactions (U.S.)

1996 ATM Usage by Frequency

number of transactions per month

Source: Synergistics, 1996

There’s not much difference in the bill payment habits of PC owners vs. non-owners. Non-owners even pay bills via PC nearly as much as PC owners.

Methods Used for Payment Online

According to Jupiter Communications www.jup.com which closely tracks electronic commerce, credit cards will continue to be the preferred method of payment through the year 2000, though its share will fall from 88% in 1996 to 51%. Picking up the slack will be electronic checks, electronic cash and smart cards.

We don’t think credit cards will be displaced so quickly. The Jupiter projections seem more than a bit optimistic on the adoption of new payment methods. We expect credit cards to maintain their dominance well into the next decade. By year 2000, we project that credit cards will have a market share in the 70% range with electronic checks (including ACH debits initiated online), used primarily for bill payment, accounting for the remainder. We don’t expect significant dollar volumes of electronic cash or smart cards by year 2000.