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Receiving and paying bills: Not yet paperless

Online bill paying a boon to some
Receiving and paying bills 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.

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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.

Online banking fees Online banking bill-paying fees
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.

Questions to ask Questions to ask before paying your bills online
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.

Quiz

Quiz: Would you benefit from receiving or paying bills online?

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-- Updated: Feb. 19, 2003
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