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Online banking, in which online bill payment is a small but important aspect, is becoming more and more popular.
The centuries-old ordeal of sitting with a stack of banknotes, a stack of envelopes, a mess of stamps and a soon-to-be-smaller checkbook is dead and gone for many in the 21st century. This is because while paying bills still tends to slide off the checking account, the process shouldn't involve any real checks or burn half a day.
More and more people are turning to various online stores to fulfill their daily financial obligations with a couple of clicks, saving time and offering the freedom of banking at their convenience. But not everyone is on board yet. According to a 2009 poll conducted on behalf of the American Bankers Association, 11 percent of people over 55 prefer online banking, compared with 26 percent of people aged 35 to 54 and 38 percent of people aged 18 to 34. On average, this means that online banking has more fans than any other method, be it branch banking, ATM or otherwise.
We have already mentioned several factors that can make people who like to go to the bank convert. For example, you no longer need to jump into your car and rush to get to the coast before it closes. Now they can make banknotes from the comfort of their couches - and in the middle of the night if they feel like it. On the other hand, people who still prefer to visit the bank often enjoy personalized service and are more confident that their financial information is protected from potential cyberspace risks.
But once customers are interested in online banking, it makes sense to start paying their bills in the same way as well. After all, going from checking your account balances to paying your upcoming phone bill is a simple step. On the next page, we'll take a look at some of the common features included in online bill payment.
Online bill payment features
Some people appreciate the personal customer service that comes with contacting the bank. Others are more than willing to say goodbye to their cashier.
Setting up online bill payment is usually a straightforward process. If you choose to pay your bills through your bank (more on other options on the next page), simply go to their website and register. Then enter the relevant information about the bills to be paid, from which account you want to receive money, and whether you want to set up automatic payments or resolve issues yourself every month. Usually then everything is ready.
In addition to accepting and paying bills, with online banking you can also perform tasks such as tracking transactions, setting up money transfers, and viewing images of canceled checks. Often, you can subscribe to receive email alerts that deliver various notifications in the event of a shortage of funds or unusual activity. Some websites offer budgeting tools as well, while others are compatible with financial planning software like Quicken.
Some of these activities may require a fee, depending on who you are dealing with. Make sure you know your bank's policies, or unexpected commissions can push you into a loss and earn extra overdraft fees for your problems. Also, when it comes to paying bills online in particular, it's a good idea to make sure your money goes where it should go every month - even if you've set up recurring payments - because sometimes a company might change some of its billing information. and your bank will not be able to deliver the funds.
Now that we've looked at what online bill payment and banking have to offer, we'll dive deeper into how the online experience differs from traditional banking and how they fit together in terms of security.
Online bill payment options and security
It may take a few extra steps to keep your online banking secure, but they can pay off as well.
There are three main ways to pay your bills online. You can pay for them directly through your bank; You can pay for them through the website of the recipient of the payment (for example, a utility provider or a credit card company); or you can use a third party website to manage your payments.
Third-party sites such as MyCheckFree and Paytrust allow customers to centralize their online bill payments in one place, coordinating their actions to ensure that all bills are paid on time. The cost ranges from monthly fees and transaction fees to zero.
You can also decide if you only want to start using the online bank, which usually offers higher interest rates. If you do decide to use the online only route, make sure that the bank of your choice is insured by the Federal Deposit Insurance Corporation (FDIC). The website must clearly state “FDIC insured” or “FDIC Member”. When paying online bills, look for a small padlock icon to indicate that the website is secure. Click on it and some certification information should appear; read carefully.
In some ways, online bill payment is actually safer than other methods. People who pay their bills online can better track their account activity so they know right away if something is wrong. They can also receive their reports and other financial notifications via email, so there is no chance that someone will be able to steal them right from their mailboxes or trash cans.
When paying bills online, just make sure you protect your privacy. To learn more about banking, read the topics in this section.
