Internet banking makes good sense for financial institutions.
For about 1 million, less than the cost of building a single traditional branch, a bank can set up a fully functioning operation on the Internet. By post and telephone, the cost of the same transaction halves. With a dial-up PC banking service, it halves again, to about 15p. With an Internet banking system, the cost drops below 5p, and sometimes as low as 1p. This is particularly significant because electronic commerce opportunities for small and medium sized enterprises requires a reliable and low cost electronic payment system.