Receiving
and paying bills: Not yet paperless By Holden
Lewis • Bankrate.com
How much longer are you going to
pay your bills the old fashioned way? As the price of a first-class
stamp keeps rising, it's time to make the switch to online bill
payments. No checks to write, no envelopes to lick and no stamps
to buy.
Doesn't matter whether you enjoy the bill-paying routine
or you loathe it. Online bill payment methods come in a variety
of flavors to fit all wants and needs.
You can continue receiving bills in the mail but
pay them online, or you can have your bills mailed to a company
that will present them on the Web and notify you by e-mail when
payments are due.
Most bank Web sites use bill-paying technology from
a company called CheckFree. Customers continue to receive most or
all of their bills in the mail, but they can pay them online through
the bank's Web site. The money is debited from the checking account,
just as if the customer wrote a check.
When you pay electronically, your billers aren't necessarily
paid electronically. More than 1,000 major billers, mostly utilities
and credit card issuers, receive payments electronically from CheckFree.
Smaller billers end up getting a paper check in the mail from CheckFree.
Services such as Paytrust
and StatusFactory
are designed to eliminate paper bills from your life. When you sign
up, you change your billing address to the Paytrust or StatusFactory
office. When the service receives your bills, it scans them and
notifies you by e-mail. Then you can look at the bill online and
pay it.
You also can pay bills directly at billers' Web sites.
Lots of companies boast of this capability. The problem is this:
Who wants to visit a bunch of Web sites to pay bills? Companies
seldom make it worth your while. For example, GEICO, the insurance
company, charges a bill-paying fee if you don't pay your semiannual
car-insurance premium in full and instead you spread it out over
two to four payments. It charges the same fee if you pay online.
Some companies are experimenting with e-bills, which
are delivered over the Web and can be analyzed and manipulated various
ways. For example, you could get a telephone company e-bill and
sort calls by area code or time of call.
Consumers might not see the point of interactive bills,
but boosters regard them as a marketing tool. They want to force
you to look at an advertisement before you can view your bill.
Thriftiness
The costs of online bill paying run all over
the map. Some banks will let you pay bills on their Web sites free
as long as you keep a minimum balance. If you don't want to tie
up a few thousand dollars just for the privilege of free bill paying,
you could pay anywhere from $4.95 to $12.95 or more a month to pay
bills online.
As one enthusiastic analyst says,
you're paying for the privilege of not tasting glue. Indeed, those
envelopes and stamps can taste nasty.
Convenience
The least-convenient part is setting up. The first time you pay
bills on your bank's Web site, you have to spread your bills out
in front of you and get ready to type in names of companies, addresses
and account numbers. Usually you have to enter that information
only once.
Many consumers dislike having to pay bills earlier
when they do it online. For all the talk about speeded-up "Internet
time," most online bill-paying services want you to pay your
bills at least five days before they are due so the payments get
to their destination on time. When you mail a check, you usually
can wait two or three days longer than that.
Paperless billing services such as Paytrust and StatusFactory
can be a boon to people who have trouble organizing paperwork. The
services are also great for people who are away from their primary
home for long periods -- retirees who spend winters down south,
for example. These services receive your bills in the mail and post
them online, so you can view and pay bills wherever you have computer
access. That's convenient.
Safety, security and privacy
Online bill-paying services require a lot of trust.
Will payments arrive on time? If they don't, when and how will you
find out? Will payments be the right amount? Will the recipient of
the money understand that the payment is from you? Generally, the
answers are comforting, but you have to expect the occasional error.
Similarly, scan-and-pay services such as Paytrust
and StatusFactory have to earn a lot of trust. After all, they know
a lot about you. Both companies promise that they won't share personal
information about you with outside marketers.
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