What is Online Bill Payment?
Online bill payment is a service that allows you to pay your bills securely through a website and app. Many financial institutions offer this service, so check with your bank or credit union. There are also software companies and apps that specialize in helping you manage your money and pay your bills online, and you can even pay bills online through personal finance software on your desktop like Quicken.
What is the Cost of Bill Payment?
Many banks offer this service for free to their customers. Ask your financial institution if they offer online banking with bill payment: they likely do. (And if they don’t, you may want to consider switching to a bank that better meets your needs.)
There are also independent, free bill payment companies that don’t belong to any specific bank. Since these free services often don’t come with many special features, they may be the best option if you are only paying two or three bills per month.
If you want more features, such as the ability to view several months of bills online, you may prefer to use a more robust online bill payment provider that offers more services. However, these companies typically charge a monthly fee, usually around $10. This cost might be worth it for some people because they find that the service saves them money by eliminating postage costs and check purchases, not to mention saving time as well. Those customers should compare the benefits of the paid bill payment service against the free offerings from their financial institution, if available.
Electronic Money Transfer or Paper Checks?
Bill payments can be sent from your account in two ways: electronic money transfer or traditional paper checks.
With electronic payments, you can create a seamless process that transfers the amount due from your bank account to your billing party. You select the payment date, and you can usually schedule your payments in advance if you wish.
Online bill payment services can also cut and send a physical paper check in cases where electronic payments are not accepted. Be sure to allow extra time and plan ahead – usually five business days – to cut and send the check if you need to do so.
Will My Transaction Be Secure?
You may wonder if paying bills online is as safe as sending payments through the mail. The answer is yes, online bill payment is completely secure – and likely more secure, as you do not face the risk of losing the payment in the mail.
Online financial transactions are heavily encrypted to prevent theft and fraud. Your data and information are protected by a password and possibly multi-step identity verification. A bill payment service provider may even guarantee that the payment is completed on time as scheduled, so check with your service to see if you qualify for additional protections.
You can also follow some simple tips for online bill payment to make using these services more secure: do not click on payment links from emails, they may be phishing attempts. Log into the online bill payment service directly through your web browser using your username and password. Enroll in two-factor authentication if it is offered.
No service is perfect, so be sure to protect your financial information in the best way possible. It is also a good idea to know in advance what steps you can take if something goes wrong.
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Sources:
Quicken. “Quicken Bill Pay.”
Bank of America. “View Questions About Bill Pay and eBills.”
Consumer Financial Protection Bureau. “Ways to Pay Your Bills.”
Source: https://www.thebalancemoney.com/what-is-online-bill-pay-1293716
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