Online Bill Paying Q & A

What's the difference betweenonline bill presentment, billpayment, and banking?

With online bill presentment, you getyour bill via the Web. Usually, you get ane-mail reminder, too. The Web bill has a"pay" button: You click on it with yourmouse and pay the bill. Your check isnever in the mail.

Some companies allow you to pay anybill online, regardless of whether it is presentedonline. In other words, you canreceive a bill in the mail and pay it online.If the biller doesn't accept electronic transfers,the bill paying service will send acheck in the mail. Online banking—asopposed to online bill paying—refers toreviewing balances and transferringmoney among accounts over the Internet.

How much time do I want to spend toset up service?

The pay-anyone services can take sometime to set up. Let's say you want to payyour lawn-care service's bills over the Web.You have to provide the details: the nameof the payee, the address, a phone number,and an account number. It can take a coupleof hours or more to enter all the informationfor the 15 or 20 bills an averagehousehold pays in a month.

The good news is that your bill payingservice will store the information, so youhave to enter it only once. The bad news isthat if you decide to switch bill paying services,you might have to type in all thataccount information all over again.

Should I mind having my bills sent to anonline company's address?

Some bill paying services allow you toview images of your bills online. They cando this because your bills are sent directly tothe bill paying service. Your bills arescanned as PDF files, and you can go onlineto view them and print them out. Thisallows you to see details such as who youmade long-distance calls to and if the bill isfrom your phone company.

But you have to be willing to letsomeone you don't know open your billsand scan them. It's no coincidence thatone of these companies is calledPaytrust. Earning your trust is the toppriority of these companies, so they offerprivacy and security guarantees.

"Until there's a problem, I'll probably benaive about the security problems," saysCraig Musni, who has used StatusFactoryfor 7 months without unauthorized chargesor loss of privacy. PayMyBills.com's serviceincludes insurance that pays for anyunauthorized transactions.

How much does it cost?

The cost of these services variesdepending on a number of factors. Somelimited services don't charge anything;others charge a base amount, plus asmall fee per bill.

Is it secure?

All of these companies say they protectthe security of your information fromsnoops and crooks. Because it's virtuallyimpossible for a potential customer tojudge the effectiveness of a bill-paying service'ssecurity, you just have to decidewhom you trust.

Source: Bankrate.com