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)
To set up this type of online bill pay you’ll 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 online bill pay website. Copy the address and your account number, and enter that information too. Each time you want to pay you’ll just enter the amount of the bill and you’re done. The bank will print and mail a check that will pull money from your account.
To be safe, you should double check with the payees if they have specific instructions for receiving payments via online bill pay. Some payees will not recognize the check (because it was printed by the online bill pay service – it isn’t their standard return mail piece). In this case, they may give you an alternate address or other instructions.
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 – like your phone company for example.
To set up online bill pay with the phone company, you’ll need to provide the company a voided check and one or two forms and authorizations. The process is very similar to direct deposit but they call it online bill pay or ACH debit.
Once you have set things up, you can pay your bill without having to use paper checks or the mail.
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 authorize these types of payments, make sure you have a good handle on your budget and available funds.
Online bill pay can really make your life easier. Once you set it up, you can reduce lost payments and the amount of time you spend shuffling papers. Give online bill pay a try!
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