Mobile or Online Banking: What’s the Difference?

Today, there are so many options to conduct transactions at your bank without actually going to a physical branch. Two of these methods include mobile and online banking. While most people use these terms interchangeably, there’s still a big difference between these two modes.

Mobile banking

Defining Mobile Banking

Strictly speaking, mobile banking is an umbrella term to cover any transaction conducted using a mobile phone or device. For example, sending text messages to approve transactions or receiving SMS about your account’s status can fall under mobile banking.

However, these kinds of transactions are not as common anymore due to the advent of the smartphone. Today, most mobile banking transactions are conducted through an app offered by the bank.  There are even app-only banking services to cater smartphone users. These include transactions like balance inquiry, bills payment, and even funds transfer. Some apps even have remote deposit features for checks. Simply snap a picture of the check using your smartphone’s camera and send it to your bank using the app.

That said, even if you can pay your bills through mobile banking, this is still pretty different from the wider scope of mobile payments. As the name suggests, mobile banking pertains to bank-specific transactions. Meanwhile, mobile payments allow you to transact with other merchants, such as paying for an order at a restaurant or purchasing some songs on iTunes.

Differentiating Online Banking

If mobile banking is about the use of a smartphone, online banking is all about the use of the internet. Whether you’re using a desktop, laptop, or a tablet, as long as you have to connect online to make a transaction, this already falls under online banking. Similar to mobile banking, there are many services you can avail of online, including the option to create new accounts. Here’s a good example of an online banking webpage on this bank’s website.

In fact, there are now internet-only banks (also called virtual banks) that don’t have brick-and-mortar branches anymore. Hugely popular in the United States, these banks are FDIC-registered and offer the same protection for depositors as traditional banks.

Blurring the Lines

With these definitions, it’s easy to see why many people use the terms “mobile banking” and “online banking” interchangeably. After all, you’d need to connect to the internet to use your bank’s app on your smartphone. You can also access your bank’s website through your smartphone.

Meanwhile, even if you can access your bank’s website on your mobile phone, you may still not be able to use it properly. Some options may not load correctly or the page may seem cut off. That’s because the bank’s website may not be optimized for a smartphone’s screen. The lines differentiating mobile and online is blurred, indeed.


At the end of the day, understanding the difference may mean that you need to ask your bank about their online or mobile banking services. Chances are that banks themselves have different definitions for these two methods of banking and differ on the services they have on offer for either method. For example, one bank may only offer the creation of new bank accounts through their online portal, while not making it available on mobile.

Be sure that you understand the difference in services, and open an account with the right bank and account type.


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