- Online bill pay is a standard service offered by banks and credit unions.
- It allows customers to set up one-time or automatic payments to various providers.
- Online bill pay is free to use, and most banks guarantee on-time delivery.
In decades past, responsible bill-pay management involved checking your mailbox daily for bills and paying them with paper checks through the mail.
Today, with online bill pay, you can view, schedule, and pay your bills right from your bank's website or mobile banking app. It not only saves paper, but it can save you time, hassle, and money.
What is online bill pay?
Online bill pay is a service offered by banks and credit unions. Bill pay allows you to pay your bills from one account without visiting multiple providers' websites or writing checks.
Most online bill pay is linked to a checking account. Online bill pay addresses three payment types:
- Immediate one-time payments
- Future one-time payments
- Automatic payments
Many large service providers now offer "eBills" and are able to receive payment from your bank electronically. However, for smaller providers that only accept paper checks, most financial institutions can send them on your behalf. In these ways, online bill pay could help you finally cut the checkbook out of your life for good.
Online bill pay is part of standard online and mobile banking services, so similarly to other services like mobile check deposit, you won't have to worry about additional fees.
Bill payment process
Choosing a platform: Bank vs. third-party services
Setting up online bill pay with your bank or credit union is usually a quick and easy process, and typically free.
If your institution doesn't offer bill pay, or the system is not reliable, you may want to use a third-party bill pay service, which may charge a fee.
Registering accounts and payees
If your bank or credit union offers bill pay, log in to your online account and navigate to the "Bill Pay" tab. If you're using a third-party service, the process for setting up payments will be similar.
You'll need to enter each payee's name and information. You may want to have a bill handy so that you can enter your payee's name, address, and account number accurately.
Once you've added your payees, you can begin creating payments. For bills that are the same each month, you may want to set up recurring payments. For all others, you can make an immediate one-time payment or schedule your payment days or weeks in advance.
Payment methods
If you're setting up bill pay through your checking or savings account, it will likely be set up as an ACH transfer or a debit card transaction. You may also set up bill pay through a third-party platform that allows you to make payments with your credit card, though there will typically be a processing fee.
Benefits of online bill pay
Time savings and convenience
The biggest advantage of setting up automatic bill payments online is that it can help you automate your payments. Bills that are the same amount each month, like your mortgage or car payment, are great candidates for setting up automatic payments with online bill pay.
Even for bill amounts that vary from month to month, scheduling payments in advance can help you avoid late or missed payments. With eBills, most financial institutions make it easy to set reminders for when your bills are due.
Your bank or credit union should tell you how many business days it will take for your payments to arrive to your payee. And some will even reimburse your late fees if your properly scheduled payments aren't delivered on time.
Enhanced security and payment tracking
Online bill pay can help you consolidate your payments in one place. Instead of having to visit a separate website for your internet service provider, phone provider, and mortgage lender to make a payment, you can just log on to your online banking portal and pay them all.
It also eliminates the risks involved with writing paper checks. With online bill pay, you won't have to worry about mail delays or someone stealing your check.
Potential drawbacks of online bill pay
One of the potential drawbacks to moving to online bill pay is that you may forget to check your bills and schedule payments. After all, you might not have an envelope arriving in your mailbox each month to remind you about your payment due date.
To avoid late or missed payment, you'll want to set aside a specific time each week to log on to your online banking account and manage your upcoming bills. You can also review bank statements to keep tabs on which payments have gone through last.
You'll also need to make sure that there are enough funds in your checking account to cover the payments. If there are insufficient funds, your bank may use overdraft protection to cover the payment, and you may incur fees.
Also, for bills with variable monthly amounts, you'll need to remember to change the payment amount each time. If you'd prefer to give service providers permission to withdraw the full bill amount each month, you may be able to set up direct payments with them using a debit or credit card or ACH transfer.
How to use online bill pay safely
Ensure that you have a secure password for your online banking portal and enable two-factor authentication where available.
Do not share personal banking information over the phone or in an email with anyone claiming to be a bank representative. Avoid clicking links when you receive a text message or email from a sender claiming to be your financial institution. Instead, type the website into your web browser and log in to your online portal from there.
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FAQs
How do I start using online bill pay?
Visit your bank or credit union's website and find the "Bill Pay" or "Pay Bills" tab. You'll need to enter your payee's name, address, and account number, which you can find on your last bill or statement.
Is online bill pay secure?
Yes, banks and credit unions use encryption to safely store customers' personal information. Beyond standard banking security practices for online bill pay, there are also personal decisions you can make to make sure your information is safe. For example, you can use a strong password and two-factor authentication where available.
Can I schedule recurring payments with online bill pay?
The best banks and credit unions allow you to schedule recurring payments at various frequencies, from weekly to monthly to quarterly.
What should I do if a payment doesn't go through?
If your bill payment doesn't go through, contact your bank to identify the issue. In the meantime, consider paying the bill directly on the provider's website to avoid any late fees.
How can I ensure I don't miss any bill due dates using online bill pay?
Understand your bank's processing times and schedule payments several days in advance of the due date.
Are there fees for setting up bill pay with a credit card?
There may be a fee associated with using a credit card to pay a service provider, such as a mortgage lender or utility company. You can avoid fees by instead setting up bill pay through your bank account or debit card.
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
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