What is bill pay?
Bill pay is a service offered by many banks and credit unions that lets you set up automatic payments for bills. If you juggle rent or a mortgage, cable and electricity bills, credit card payments and more, online bill pay can save time and help you avoid late fees.
Online bill pay also allows you to manage your payments to various companies — all in one place. There’s no need to pay a Verizon bill on Verizon’s website, a Wells Fargo credit card with Wells Fargo bill pay, then write a check to your landlord. Instead, you could do it all from your financial institution’s website or mobile app.
An added bonus: Many banks and credit unions guarantee your payments will arrive on time and will reimburse your late fee if they don’t.
How does bill pay work?
How online bill pay works is straightforward: Log in to your bank account, navigate to its online bill pay feature, then select the provider you would like to pay. If you haven’t paid the provider through online bill pay before, you’ll need to add it by choosing it from a list or by plugging in the account number and billing address, then authorizing your bank to send payments for you.
Payments can be sent by your bank electronically or via paper check, so you can pay even if the biller isn’t online — virtually eliminating the need for a checkbook. You can also choose a one-time payment or set up a recurring one.
Many banks offer basic bill pay service for free with their checking accounts. If you’re trying to minimize unnecessary fees, signing up for free bill pay service is a good way to keep track of your accounts and avoid charges for missing or late payments.
Many merchants and service providers offer the option of letting you receive an e-bill, or an electronic version of your paper bill, into your online bill pay account. If an e-bill arrives, you can have your bank alert you by email, text message or push notification via the bank app. Typically, you can choose whether to pay the entire balance, just the minimum due or another amount. You can even opt to have your bills paid automatically.
SoFi Checking and Savings
EverBank Performance℠ Savings
Barclays Tiered Savings Account
Min. balance for APY
$250,000
How to set up bill pay
The effort you take in the initial setup can save you time and headaches in the long run. Each bank or credit union will have its own rules and steps, but generally here’s what you need to do to set up bill pay:
Gather your bills, including account numbers and the addresses to where you mail the payments.
Enter each biller’s information into your bank’s online bill pay platform, or choose them from a list provided by your bank.
Choose when to send the payment.
Select a recurring or one-time payment.
Set reminders or alerts to track when each bill is due.
Online bill pay helps you organize bills and keep track of due dates. It also makes it easier to see where your money is going, so you can make sure you have enough funds available to cover each payment. You receive and pay your bills all through your bank — one list, in one place.
FAQs
What is bill pay? Bill pay is a service offered by many banks and credit unions that lets you set up automatic payments for bills. If you juggle rent or a mortgage, cable and electricity bills, credit card payments and more, online bill pay can save time and help you avoid late fees.
What is online bill pay used for? ›
Online bill pay enables you to schedule and pay your bills right from your computer, tablet or mobile phone. An online bill pay service works by deducting a payment from your account balance and transferring it to a service provider.
What is online bill payment a service that provides? ›
Online bill pay enables businesses and consumers the ability to securely pay bills and invoices digitally without the need for traditional paper processes.
Which is an advantage of paying your bills using online bill pay? ›
Which is an advantage of paying your bills using the online bill pay feature with your checking account? It saves time and paper OR It eliminates late fees.
Are there any disadvantages to online bill pay? ›
Errors could result in additional fees. Be aware of your checking account balance, especially if you have automatic payments set up. If you overdraft your account, that can result in unwanted, expensive fees. Certain privacy issues may be at stake concerning shared client database information.
Is using bill pay safe? ›
Security: Online bill pay is more secure than paying bills with paper checks. Your financial information is encrypted when you send payments online, which makes it difficult for scammers to steal it.
Is online bill pay the same as autopay? ›
While bill pay and autopay are similar, they work differently. With online bill pay, your bank sends payments to your creditor from your account. With autopay, your creditor takes money from your account. Here's how to decide which method is best for you.
How do online payment services work? ›
The online payment journey
The customer enters their payment information (e.g. debit card or PayPal details) into an online checkout form, so they can pay for something. 2. The payment gateway securely sends that data to the payment processing company (e.g. Barclaycard).
Does bill pay send a bank check? ›
Most bill payments are sent electronically. However, some may be sent as paper checks if the amount is above the electronic payment threshold, or the company doesn't accept electronic payments.
What is the difference between a bill payment and an ACH payment? ›
Bill payments are usually listed as ACH debits, while payments to your account from another entity, like the US Government or IRS, are classified as ACH credits. The difference is that credits are pushed into an account while debits are pulled out of the account. Hopefully, that alleviates any confusion.
Benefits of Online Bill Pay
Additionally, because Bill Pay is accessible from anywhere with an internet connection, you can manage bills while you're on the go. And since Bill Pay can do check writing and remittance on your behalf, you no longer need to manually write checks and mail payments out.
Which of the following is a disadvantage of using online payment? ›
The disadvantages of online payments include fraud risks, difficulty in tracing, technical issues, reliance on the internet, loss of smart cards, identity theft, and more.
Is online bill pay easier? ›
Once you've set up your bill payment service online or on your mobile device, it only takes a few seconds to pay your monthly bills. Simply select the payee(s), enter the dollar amount, choose a delivery date and you're done.
What do people use online bill pay for? ›
If you have an account with a bank or credit union, consider if bill pay might be right for you. Many people have recurring fixed payments for loans, rent and subscriptions that bill pay can help manage. You can also add other payees that you frequently pay, even if they're not on a regular schedule or a fixed amount.
Is online bill pay free? ›
Bill Pay is a free, quick, and convenient way to pay your bills from Online Banking or the TD Bank app. Simple to set up and use, Bill Pay makes it easy to receive and pay your bills, schedule payments, set up reminders and more.
Is there any risk in online payment? ›
Payment risk refers to the potential of losses due to a contract default or other payment event such as fraud, security breaches or chargebacks. Companies regularly handling a high volume of online payments are subject to such risks.
What do people use online payments for? ›
Online payments make it easier to manage and store your money and other financial data. For both vendors and customers, there are a lot of tools available on the internet that will help you with transactions. You don't have to keep track of your finances and let the tools do the job.
Does online bill pay mail checks? ›
The bank will electronically send your payments to any payees who can accept them. For payees who do not accept electronic payments, the bank will mail a check and cover the postage on your behalf. Online bill pay services can be a convenient and free way to manage your bills from your bank account.
How does online pay work? ›
Using secure communication methods and tokenization, payment gateways communicate between your online store/website and your bank. Customer data is collected, validated, approved, and then the payment is accepted, debiting your customer's account.
