Even just a few years ago, many consumers were weary of using electronic bill pay services as a primary way of managing their finances due to safety concerns and unfamiliarity with how they work. Secure online banking, however, combined with the increased use of smartphones, is making online banking more popular than ever while “snail mail” is on the decline. Consider these stats: 69 million Americans bank online; 81 percent of household money managers banked online at least once in the past year, and more than 50 percent have done so in the past month. Add to that, consumers report high satisfaction with bill pay services—at 78 percent—for payments of all types, including mortgages, tuition, utilities, loan, rent, and even credit cards.
There are three main ways to pay bills online: through your credit union, bank, or other financial institution; on a biller/vendor site; or with a third-party bill payment service. There are differences between each type of bill pay service, and your choice depends on personal payment preferences for each type of bill. Whichever method or combination you choose, you’ll get five benefits by switching to electronic bill pay service.
Easy Does It: When you sign up for electronic bill pay, transactions can be set up for automatic payments each month or at the interval of your choosing. You’ll also save the time typically spent writing checks, addressing envelopes, and getting into the mail.
Less Cost: Because of the cost of checks, envelopes, stamps, and other associated fees, you’ll save money long-term. In fact, the average household with 19 bills saves almost $200 a year using electronic bill pay (note: some vendors charge a set-up or recurring fee in order to use bill pay so ask in advance).
Maintain Credit Score: Just one delinquent bill can impact your credit score. Because most online bill pay systems offer pre-scheduled payments, bill pay reminders, and payment sent notifications, regular on-time payments will much more likely be consistent. Additionally, you’ll be able to track payment history to keep tabs on past, present, and future scheduled transactions. (Conversely, if you stop service with a vendor for any reason, make sure you turn off their auto payment).
Good for the Environment: We are more aware than ever of our everyday impact on the earth. All of that paper for the bills administration can be swapped for online transactions. It’s a contribution you can make on a regular basis that adds up to a significant difference.
Fend Off Identity Theft: Fact: almost 85 percent of identity theft comes from lost checkbooks, check payments, and paper invoice statements. Eliminating bills going to your mailbox that contain payments with credit card or checking account numbers significantly reduces the chance of identity theft. (Note that no method for paying bills is foolproof, but the security systems in place for online bill pay are typically far greater than the safety of an unlocked mailbox).
To learn more about electronic bill pay, contact your financial institution and vendors about their options for services.