Online bill payment is a mode of bill payment in which you issue the payment instructions over the Internet by logging into the service provider’s website or an online payment service website. With increasing Internet usage, online bill pay is becoming more popular. There is so much paper clutter in our daily lives that it is not a surprise that more people are moving towards online methods to manage all their important transactions. Online bill pay virtually eliminates any errors and can avoid any charges that come with late payments and can help you manage your debt more efficiently.
# Benefits of online bill pay
Cost effective – Online bill pay will eliminate the need to mail in any payment checks; effectively it means that there is no postage expense. Also most of the online bill services, either provided by the service provider or by a financial institution, are free. A typical household receives around 12 bills every month. With the US first class postage at the current rate of 45 cents, it is like putting 6 dollars directly in your pocket.
Convenient – Online bill payment services usually provides a recurring payment service and also bill pay reminders. This makes one less thing to remember amongst all others things. It also reduces the chances of late payments or partial payments.
Easy – Setting up an online payment is easy when compared to the conventional payment where one would calculate the payments, write the checks, put the stamps, and mail it. You do not even need to file you physical bills as they would always be available on your payment service provider’s website.
Security – Contrary to what many people think, online bill pay is considered safer. As per Identity Fraud Consumer Report by Javelin Strategy & Research, “Consumers should request electronic statements and use online bill pay whenever possible” to avoid ID thefts.
Reporting – Some online bill payment service providers provide a feature to track your expenses. This way one should be able to effectively manage their expenses and remain debt free.
As with all systems, online bill pay service does come up with some drawbacks. Although these are minor drawbacks, if one is not careful it can be costly. Sophisticated hacking techniques like “spamming” and “phishing” can catch you off guard if you are not careful. “Phishing” is a hacking technique where a person or an email personifying as from your banking institution may ask for confidential details that can compromise your accounts. However some simple tips can the online bill pay more pleasurable and help avoid scams.
Tips to avoid scams:
* Do not open any links in the email. If the email ask to login to your online banking, do not click the link rather go to the bank’s website to confirm the details.
* Review your payment activities regularly and bring it to your financial institution’s notice if you find any fraudulent activities.
* Change your financial institution’s password regularly.
* Maintain a good anti-virus program