What is bill pay?
Bill pay is a service offered by many banks and credit unions that lets you set up automatic payments for bills. If you juggle rent or a mortgage, cable and electricity bills, credit card payments and more, online bill pay can save time and help you avoid late fees.
Online bill pay also allows you to manage your payments to various companies — all in one place. There’s no need to pay a Verizon bill on Verizon’s website, a Wells Fargo credit card with Wells Fargo bill pay, then write a check to your landlord. Instead, you could do it all from your financial institution’s website or mobile app.
An added bonus: Many banks and credit unions guarantee your payments will arrive on time and will reimburse your late fee if they don’t.
How does bill pay work?
How online bill pay works is straightforward: Log in to your bank account, navigate to its online bill pay feature, then select the provider you would like to pay. If you haven’t paid the provider through online bill pay before, you’ll need to add it by choosing it from a list or by plugging in the account number and billing address, then authorizing your bank to send payments for you.
Payments can be sent by your bank electronically or via paper check, so you can pay even if the biller isn’t online — virtually eliminating the need for a checkbook. You can also choose a one-time payment or set up a recurring one.
Many banks offer basic bill pay service for free with their checking accounts. If you’re trying to minimize unnecessary fees, signing up for free bill pay service is a good way to keep track of your accounts and avoid charges for missing or late payments.
Many merchants and service providers offer the option of letting you receive an e-bill, or an electronic version of your paper bill, into your online bill pay account. If an e-bill arrives, you can have your bank alert you by email, text message, or push notification via the bank app. Typically, you can choose whether to pay the entire balance, just the minimum due or another amount. You can even opt to have your bills paid automatically.
How to set up bill pay
The effort you take in the initial setup can save you time and headaches in the long run. Each bank or credit union will have its own rules and steps, but generally here’s what you need to do to set up bill pay:
Gather your bills, including account numbers and the addresses to where you mail the payments.
Enter each biller’s information into your bank’s online bill pay platform, or choose them from a list provided by your bank.
Choose when to send the payment.
Select a recurring or one-time payment.
Set reminders or alerts to track when each bill is due.
Online bill pay helps you organize bills and keep track of due dates. It also makes it easier to see where your money is going, so you can make sure you have enough funds available to cover each payment. You receive and pay your bills all through your bank — one list, in one place.
FAQs
Online bill pay helps you organize bills and keep track of due dates. It also makes it easier to see where your money is going, so you can make sure you have enough funds available to cover each payment. You receive and pay your bills all through your bank — one list, in one place.
What is the purpose of online bill pay? ›
Online bill pay enables you to schedule and pay your bills right from your computer, tablet or mobile phone. An online bill pay service works by deducting a payment from your account balance and transferring it to a service provider.
What is online bill payment a service that provides? ›
Online bill pay enables businesses and consumers the ability to securely pay bills and invoices digitally without the need for traditional paper processes.
Which is an advantage of paying your bills using online bill pay? ›
An advantage of paying your bills using the online bill pay feature with your checking account is that it saves time and paper. Instead of writing checks and mailing them, you can simply enter the payment information online and authorize the payment.
Why would a consumer choose to use online bill pay? ›
Benefits of Online Bill Pay
Additionally, because Bill Pay is accessible from anywhere with an internet connection, you can manage bills while you're on the go. And since Bill Pay can do check writing and remittance on your behalf, you no longer need to manually write checks and mail payments out.
Why an online billing system is very useful? ›
Eliminates errors and disputes
Online invoicing reduces errors and disputes when creating or issuing invoices to customers due to human factors. With online invoicing software, all necessary calculations, including tax deductions, are managed by the software, reducing the risk of miscalculations.
How secure is online bill pay? ›
Security: Online bill pay is more secure than paying bills with paper checks. Your financial information is encrypted when you send payments online, which makes it difficult for scammers to steal it.
Why are online payment services necessary? ›
No more needing to go to the bank, retailer, or billing company's office. You can pay bills, make purchases, transfer money between accounts, talk to customer service, and handle any kind of transaction just by chilling on your couch with your phone or laptop.
How do online payment services work? ›
1. The customer enters their payment information (e.g. debit card or PayPal details) into an online checkout form, so they can pay for something. 2. The payment gateway securely sends that data to the payment processing company (e.g. Barclaycard).
What is the use of online payment system? ›
Online payment allows you to pay money via the internet. Buyers will use this type of payment when they purchase goods online or offline. They can use different types of online payment methods, including debit/credit cards, wire transfers, net banking, and digital wallets.
For both the seller and the customer, online payments save a lot of time. People don't have to wait in lines, take time to write checks, or wait for paper bills. They don't have to wait for banks to clear their checks so that they can access the money.
What are the pros and cons of bill pay? ›
Pros and cons of Bill Pay
Flexibility: You can schedule payments for any date, and you can cancel a payment before it's sent. Manual: You have to remember to schedule payments, and you may have to pay a fee**. Control: You have more control over your bills, when they're paid, and to whom.
What do people use online bill pay for? ›
If you have an account with a bank or credit union, consider if bill pay might be right for you. Many people have recurring fixed payments for loans, rent and subscriptions that bill pay can help manage. You can also add other payees that you frequently pay, even if they're not on a regular schedule or a fixed amount.
Does bill pay charge a fee? ›
How much does Bill Pay cost? Bill Pay is free to members. Certain additional features may be charged a nominal fee. What are the advantages of using Bill Pay?
What is the meaning of online bill payment? ›
Online bill pay is an electronic payment service offered by many banks, credit unions and bill-pay services. It allows consumers to make one-time or recurring bill payments through a website or app. Consumers may also be able to schedule future payments.
What is the function of online payment? ›
Online payment allows you to pay money via the internet. Buyers will use this type of payment when they purchase goods online or offline. They can use different types of online payment methods, including debit/credit cards, wire transfers, net banking, and digital wallets.
How does online bill pay work QuickBooks online? ›
Schedule a bill payment with QuickBooks Bill Pay
- Select Enter account info manually.
- Enter bank details and select Continue.
- Within 3 business days, we'll send you 2 small deposits. ...
- Monitor your bank account for the 2 deposits from Intuit. ...
- You'll see the bank name and account number.
