Online bill pay can help you manage your bills without having to worry about paper bills and cheques. This article covers the various types of online bill pay and how you can quickly and easily start using the service. Once you’re up and running, you can spend more time on the better things in life, according to www.thebalance.com.
Setting things up is easy. First, we’ll want to make sure we know what types of online bill pay you really have available, and then we’ll run through the process.
Types of online bill pay;
Several different services are described as online bill pay:
Online bill pay offered by your bank
Online bill pay offered by your service providers (phone company, mortgage company, etc.)
The first type (online bill pay offered by your bank) is a service that sends money out of your bank account to whoever you wish. In many cases, these online bill pay services will actually print a cheque and mail it to the recipient. If the company you want to send payments to is setup within the bank’s system, the bank will simply transfer the money electronically when you use online bill pay (no cheque will be issued).
To set up this type of online bill pay, you will probably just need a copy of the bill that your service provider sends you. Set up a new payee in the name of that company at your bank’s website. Copy the address and your account number, along with any other information needed to make a payment.
Each time you want to pay, you will enter the amount of the bill, and you’re done. The bank will print and mail a cheque that will pull money from your account.
To be safe, you should double-check with your payees; see if they have specific instructions for receiving payments via online bill pay. Some payees will not recognise the cheque (because it was printed by the online bill pay service – it isn’t their standard return mail piece).
They may ask you to use an alternate address, or they may provide other instructions. As an alternative to asking for instructions, you can try to send a payment and see how things go – do it well before your payment’s due date so you can pay another way if necessary.
The second type of online bill pay (online bill pay offered by your service providers) is a service that will only allow you to pay one company (your phone company or auto insurer, for example).
To set up online bill pay with the phone company, you will need to provide a voided cheque and an authorisation form to the phone company (or you might be able to provide your current account information online). The process is very similar to direct deposit, but they call it online bill pay or ACH debit.
To get things set up, you will need to know where to find your account number and routing numbers for your current account. Once things are up and running, payment goes directly to your service provider.
Automatic online bill pay
If you really like to automate things so that you don’t have to think about them, you can automate online bill pay. Almost all online bill pay services will allow you to set up recurring payments. For example, you can have the online bill pay service take care of your phone bill every month or your insurance every quarter.
Another way you can let online bill pay run on auto-pilot is to allow your service providers to pull money out of your account without you having to click anywhere. In other words, the service provider just “asks” the online bill pay company for payment and the payment is made without any activity on your part. If you authorise these types of payments, make sure you have a good handle on your budget and available funds.