by William J. Lynott
Every year, paper checks by the billions are sorted, processed, shipped through a complex network, processed again and scanned electronically or returned to the writer by mail. That's why banks want you to pay bills electronically.
According to Jupiter Research, nearly 30 million Americans were signed up to view their bills online in 2004, and half of them used the service to pay at least some of their bills. By the end of 2005, Jupiter estimates that nearly 41 million individuals and businesses will view bills online with two-thirds of them paying electronically.
"I love not having to write and mail checks each month," says Allison Winn Scotch, New York, NY. "Now I just log on to my bank's Web site - no more worrying about having stamps and getting to a mailbox."
If you've resisted the idea of using your computer to pay bills, now may be the time for you to give it a try. The spread of high-speed Internet connections, greatly improved Web sites, and technology that simplifies the procedure have made online bill paying easy and comfortable.
Those with concerns about security with paperless checks can feel safe in making the switch. "Online bill payment is at least as secure as conventional payment [paper checks]," says Elizabeth Robertson, senior analyst at the research firm, TowerGroup. Some researchers go further, saying that online bill paying is less vulnerable to fraud and identity theft than conventional paper transactions.
Where to start
There are three basic categories of electronic bill-paying service providers: individual creditors, banks and brokerages, and independent Web sites. Among the individual creditors are utilities and credit card companies, most of which allow paying online at their Web sites at no charge.
The disadvantage of dealing directly with individual creditors for online payment is that you must sign up for each one separately. With the average household receiving 13 bills each month, that means spending a lot of time logging on to a variety of Web sites.
Banks and brokerage firms allow users to pay most, if not all, of their bills on one site. Some banks charge a minimal fee for the service; many now offer it free. Others determine payment for online bill paying service based on the type or size of the customer's account.
A number of Web sites provide electronic bill-paying service. These independent companies charge from $4.95 to $15 per month, depending on the range and type of service offered.
Among the most popular is Checkfree (http://checkfree.com), which offers a variety of money management services.
A Few Still Hesitate
Of course, even ardent fans of online bill paying have their complaints. "When I schedule a payment to be made, the actual payment date is often a full week from the time I authorize the payment," says Lisa Beamer, Pittsburgh, PA. "That seems excessive to me for something being done electronically."
If you're one of the unconvinced, sign up with just one creditor, pay one bill, and sit back to see what happens. Chances are you'll be hooked.
