Save time and hassle with online bill pay!

Recent studies indicate that online banking doesn’t just make life easier. Customers who choose it seem to be more satisfied with their specific banking institution due to two basic reasons: the convenience of Internet banking and the ability to pay their bills online. This service saves time, gasoline, paper, stamps and can also avoid accidentally missing a payment.

Internet banking is a powerful tool that consumers and business owners can use to manage their money. A lot of new account holders come to online banking to check their account balances and payment activity. Then they learn how to transfer funds between different accounts. And finally, many users begin to pay their bills online.

According to many bankers, customers find online bill pay the most appealing service. Once you initiate a transaction from your account, your bank will take care of the rest, assuming that you have enough funds in your account to cover the payment.

What is online bill pay? 

Online bill pay is a service that sends money out of your bank account to whoever you wish via the Internet. If your payee doesn't accept electronic payments, the banking institution will print a check and mail it to the recipient. 

Online bill payments are as simple as the name suggests. Using your personal computer connected to the Internet, you can tell your bank who to pay, how much to pay, and when to complete the transaction. The bank will simply transfer the money electronically when you authorize a withdrawal from your account.

Typically, online bill pay is offered for free if you have an account in this specific banking institution. Some banks can charge a fee of $5-$7 a month or offer the service for free to customers who maintain a minimum account balance. 

Paying electronically through an online bill pay system offers a lot of advantages over the traditional way of paying through the mail. Your won’t have to sign or mail any checks over to the bank, you won’t have to stand in lines to transfer money; and you can make direct payments in your pajamas from your favorite arm-chair.

If you pay your bills online, your money will typically move more quickly. Banks offer on time payment guarantee and allow users to track their payments from "Sent" to "Paid" just in case there are any doubts. If you send checks through the mail, they can get delayed or lost.

Further, online bill pay service provides an opportunity to view your statements, account balance and due dates with a few clicks of the mouse! And you don't have to worry about trying to gather the paper bills and finding stamps and envelopes for mailing.

How to make a payment online 

Most bankers will instruct first time users in online bill pay when they open a new account. Typically, the process involves several steps. First of all, you need to log into the online banking system linked to your account. 

To set up a payment with your bank account, go to the bill payment section of your online banking page. You will need to create a list of payees. They can either be companies or individuals. Once a payee is added, you will never need to add it again. 

The most common payees include credit card issuers, mortgage lenders, utility companies, landlords, and department stores. You can also add the person who delivers your newspapers, baby sitter, the local pharmacy, and the charity of your choice. 

You can even name your kid, spouse, family members or friends as a payee if you need to make them a payment or transfer funds. With few exceptions, like certain tax payments and most court-ordered payments, you can pay bills online to virtually anyone in the U.S. (or your country of residence). 

You will need to fill in certain basic information about your payee and your relationship with it, including: 

•    the payee's name, 
•    the payee's address and telephone number,
•    an expense category, 
•    your account number with the payee. 

The next step is to choose the payee (the list can be sorted by name or category) and enter an amount you want to pay. Select the date when your payee will receive the payment and funds will leave your account. 

Click the Make Payments button to submit the payment. That’s all! All large banks guarantee that your payments will be sent as scheduled provided you have sufficient funds available in your account. 

How can you avoid late payments? 

Letting your bills go unpaid after their due date is not a good idea. Do you really want to incur late payment fees or damage your credit history? One of the main advantages of online bill pay service is that you can set up payments which will be processed automatically. 

For example, you need to make a car payment in the same amount every month. Select a payee, and choose when and how frequently you'd like to make the payment. You can assign as many bills as you like to automatic bill paying.

If the amount of your recurring payment changes every month (for example, you want to schedule a credit card bill or an electricity bill), the bank may be able to send you an e-mail or wireless alert telling that you need to log on and set the appropriate payment amount before completing the transaction. 

Is it safe to pay bills online? 

Taking into consideration all the attention that online banking system and online bill pay are receiving, it is no wonder that new online banks pop up everywhere. But is it safe to use these Internet services? 

In fact, it should be noted that most online banking systems are well-protected. Of course, in today’s electronic world hackers will always remain a significant threat, but banks spend a lot of time, money and efforts to keep all accounts safe. 

Online financial transactions are accomplished through a SSL/TSL encryption protocol. All information sent from your computer to the bank’s server and visa versa is encrypted. No one who may be able to spy on the data transmission will understand it. 

Web pages that use a SSL/TSL encryption have URLs that start with https://. The “s” after “http” indicates that the connection is secure, allowing you to safely pay your bills online. You can also notice the small, yellow closed padlock icon in a browser window.

It is very unlikely that personal financial information could be stolen by hackers through an online banking system, but not impossible. However, the traditional way of paying through the mail has a number of inherent risks as well. Your payments can simply get lost! 

Many people would agree that online bill pay is the best part about Internet banking. It can really make your life easier. Once you set it up, you can reduce lost payments and the amount of time you need to mail papers. Give online bill pay a try!