to ask before you jump online to pay bills
What's the difference
between online bill-presentment, online
bill-payment and online banking?
With online bill-presentment,
you get your bill via the Web instead
of receiving a paper bill in the mail.
Usually, you get an e-mail reminder, too.
The Web bill has a "pay" button:
You click on it with your mouse and pay
the bill. Your check is never in the mail.
companies allow you to pay any bill online,
regardless of whether it is presented
online. In other words, you can receive
a bill in the mail and pay it online.
If the biller doesn't accept electronic
transfers, the bill-paying service will
send a check in the mail.
banking -- as opposed to online bill-paying
-- refers to reviewing balances and transferring
money among accounts over the Internet.
How much time
do I want to spend to set up service?
The pay-anyone services can take some
time to set up. Let's say you want to
pay your lawn-care service's bills over
the Web. The lawn-mowing guy isn't going
to present bills online, and his name
won't pop up on the list of pre-ordained
payees on your bill-paying service's list.
So you have to provide the details: the
name of the payee, the address, a phone
number and an account number. It can take
a couple of hours or more to enter all
the information for the 15 or 20 bills
an average household pays in a month.
The good news is that your bill-paying
service will store the information, so
you have to enter it only once. The bad
news is that if you decide to switch bill-paying
services, you might have to type in all
that account information all over again.
Do I want to conduct
my online banking and my online bill-paying
on different Web sites?
For some people, it
just seems weird to do online banking
at one site and bill-paying at another
Customers tell First
Union that they want their bill-paying,
account balances and investment information
all on one Web site, says Lou Anne Alexander,
vice president of emerging payments for
the Charlotte-based bank.
"I think you'll see this convergence of
online bill-payment and online banking,"
First Union has been one of the most aggressive
banks in promoting online bill-paying
services, and Alexander believes that
someday the bank's customers will be able
to pay bills not only with a personal
computer, but via ATMs and with handheld
computers, such as the Palm Pilot. First
Union also allows customers to pay bills
using a touch-tone phone.
Do I mind having
my bills sent to an online company's address?
Some bill-paying services
-- namely, Paytrust,
-- allow you to view images of your bills
online. They can do this because your
bills are sent directly to the bill-paying
service. Your bills are scanned as PDF
files, and you can go online to view them
and print them out (ah, yes, the irony
of printing out a bill that has been sent
elsewhere so you don't have to handle
the paper). This allows you to see details
such as who you made long-distance calls
to and if the bill is from your phone
But you have to be willing to let someone
you don't know open your bills and scan
them. It's no coincidence that one of
these companies is called Paytrust: Earning
your trust is the top priority of these
companies, so they offer privacy and security
"Until there's a problem, I'll probably
be naive about the security problems,"
says Craig Musni, who has used StatusFactory
for seven months without unauthorized
charges or perceived loss of privacy.
PayMyBills.com's service includes insurance
that pays for any unauthorized transactions.
How much does it
The cost of these services varies
depending on a number of factors. Some
limited services don't charge anything;
others charge a base amount, plus a small
fee per bill.
Is it secure?
All of these companies say they protect
the security of your information from
snoops and crooks. Because it's virtually
impossible for a potential customer to
judge the effectiveness of a bill-paying
service's security, you just have to decide
whom you trust.