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How can texting make your banking easier?

        Money | Online Banking

Text banking offers a quick and easy way to access your accounts wherever you carry your mobile device. See more banking pictures.
Alistair Berg/Getty Images

Text banking, also known as SMS banking, offers a fast, easy way to access your account information wherever you carry your cell phone -- at home, at work, stuck in traffic or even waiting in line at the bank! Many major U.S. banks offer text banking as one of their mobile banking services. Text banking has an advantage over other types of mobile banking -- mobile banking smartphone apps or online banking using a mobile Web browser -- because it doesn't require an Internet connection. That makes text banking fast and free for most cell phone users.

Text banking makes it easy to check your account balance, see how much you owe on your credit card, and even transfer money from one account to another, such as your savings account to your checking account. The text banking system is entirely automated. You aren't texting back and forth with a live person, but rather a computer that responds to a set list of text commands. Your bank supplies you with a text banking number to which you send all banking commands.

Here are some common text banking commands:

  • BAL -- primary account balance
  • BAL ALL -- all account balances
  • LAST -- last five transactions on primary account
  • DUE -- credit card balance
  • TRANS -- transfer money between two accounts
  • ATM (+ZIP) -- find nearby ATM locations
  • MENU -- list of all commands
  • HELP -- help menu

Security is a serious concern with mobile banking. According to a survey by Javelin Strategy & Research, 51 percent of cell phone users think mobile banking is unsafe [source: Clairmail]. Even with the explosion of smartphones on the market, only 1 percent of bank customers use their mobile device for banking in 2011, down from 3 percent in 2010 [source: ABA].

Responding to the security concern, banks have designed a host of precautions to cut down on fraud and identity theft. For starters, text banking customers are assigned a PIN that they must enter to initiate a text banking session. Customers are also asked to assign nicknames to each of their bank accounts [source: Wells Fargo]. This avoids the dangerous practice of sending full account numbers as text messages.

Banks can also send text messages and alerts to improve customer service and security. Customers can sign up to receive messages when their account balance dips below a certain amount or when a credit card payment is due. To cut down on fraud, some customers opt to receive a text alert when a large payment has been made from a bank account or credit card, or when a transaction is recorded in another country.

Text banking is useful for accessing account information on the go, but it does not offer a full-service banking experience. You can't schedule and pay bills, for example, a useful feature of online banking and mobile apps for smartphones [source: Bank of America]. But for cell phone customers who don't want to pay extra for a data plan, text banking is a convenient financial tool.

Keep reading for more links and information about mobile banking services.