Somebody has got to explain to me how online billpay works

[acemcmac]

Yeah, I understand that its as "simple" as typing in your account number and the address of the company you want paid, but is the back end an automated check mailing system? Is it a network of EFTs? I'm really apprehensive about relying on something that I don't at least have some understanding of the details of. I don't like the whole black box idea.

Anybody know?

 

[krunchykrome]

You've never paid a pill online? Are you talking about online bill pay that your checking account offers or the bill pay features on specific websites?

 

[acemcmac]

Originally posted by: krunchykrome
You've never paid a pill online? Are you talking about online bill pay that your checking account offers or the bill pay features on specific websites?

On my checking account. Every single biller I have has a different 3rd party that they want me to set up bill paying through, so I just decided to give my bank a try. Of course, I've always paid my CCs through each of their own portals, but the idea of paying other bills (utilities, mortgage) is new to me, so I'm investigating ways to do it that don't involve stamps 🙂

 

[MrChad]

Originally posted by: acemcmac

Originally posted by: krunchykrome
You've never paid a pill online? Are you talking about online bill pay that your checking account offers or the bill pay features on specific websites?

On my checking account. Every single biller I have has a different 3rd party that they want me to set up bill paying through, so I just decided to give my bank a try. Of course, I've always paid my CCs through each of their own portals, but the idea of paying other bills (utilities, mortgage) is new to me, so I'm investigating ways to do it that don't involve stamps 🙂

I think it depends on the recipient. For me, in some cases it's an automated check mailing. I don't have to write the check or pay for the stamp however. For others, it's an EFT. My bank (Chase) indicates next to the billing recipient how long it will take for them to receive the funds. In the case of EFTs, it's one day. For checks that need to be mailed, it's five days.

 

[GuitarDaddy]

It depends on your bank and who you are paying. With my bank(Chase) when you set up a new payee they either have a lighting bolt symbol which means 2day EFT, or a letter symbol which is 5day (paper check). If they have the 2day symbol you can change it to a 5day paper check, but if they show the paper check symbol EFT is not available

 

[QED]

When I used to work for a big international bank, online bill-pay was actually a combination of the two methods you desribed.

If the payee was someone with whom we already had information on (i.e. most other large financial institutions), the payment was done by EFT transfer.

If the payee was not someone with whome we were familiar with, a check was printed out bearing the customer's account information and mailed to the address provided by the customer for the payee.

 

[acemcmac]

Originally posted by: MrChad

Originally posted by: acemcmac

Originally posted by: krunchykrome
You've never paid a pill online? Are you talking about online bill pay that your checking account offers or the bill pay features on specific websites?

On my checking account. Every single biller I have has a different 3rd party that they want me to set up bill paying through, so I just decided to give my bank a try. Of course, I've always paid my CCs through each of their own portals, but the idea of paying other bills (utilities, mortgage) is new to me, so I'm investigating ways to do it that don't involve stamps 🙂

I think it depends on the recipient. For me, in some cases it's an automated check mailing. I don't have to write the check or pay for the stamp however. For others, it's an EFT. My bank (Chase) indicates next to the billing recipient how long it will take for them to receive the funds. In the case of EFTs, it's one day. For checks that need to be mailed, it's five days.

Ah. Did some of them start as a check mailing and some of them later turned to EFT's?

My bank (wachovia) started billpay in 1999 and PECO was one of the original partners. I find it weird that it's saying that it'll take 5 days for PECO to get the payment.... I'm assuming that they're mailing....

My water bill will be the next one I experiment with.

 

[acemcmac]

Originally posted by: QED
When I used to work for a big international bank, online bill-pay was actually a combination of the two methods you desribed.

If the payee was someone with whom we already had information on (i.e. most other large financial institutions), the payment was done by EFT transfer.

If the payee was not someone with whome we were familiar with, a check was printed out bearing the customer's account information and mailed to the address provided by the customer for the payee.

Did humans make the distinction or was it all automated? Again, I think its really weird that my bank has been doing this for 7 years, partnered with PECO from the start and it still says that it'll take 5 days....

 

[MichaelD]

Most utilities will offer an auto-debit service for free. That's how I pay my electric, gas and phone. It's very convenient. No stamps, no paper bills to worry about.

You just have to remember to deduct what they've taken out from your checkbook. Kinda important!

 

[acemcmac]

Originally posted by: MichaelD
Most utilities will offer an auto-debit service for free. That's how I pay my electric, gas and phone. It's very convenient. No stamps, no paper bills to worry about.

You just have to remember to deduct what they've taken out from your checkbook. Kinda important!

But then you're counting on your utilities to stay honest and keep their paws out of the cookie jar! I don't trust anyone enough to give automatic debit authorization.

😉

 

[dullard]

There are two ways to pay your bills online.

1) Go to your bank's website and have your bank pay your bills. This could be either medium speed (2+ days for an electronic check) or snail mail (5+ days to credit because they physically mail your check). Some banks do this for free, some banks do it for free if you meet a lot of criteria, the rest of the banks charge you a monthly fee. Honestly, there is not really any advantage over writing a check yourself if you have to pay your bank a fee.

2) Go to each individual company you want to pay and have them withdraw from your bank account. This method is generally instantaneous and free. Thus, it is a major advantage if you don't want to pay for anything and/or if you are too close to the bill deadline to pay it any other way. Free + no late fees + earn as much interest on your money in the bank account = win for me.

 

[dullard]

Originally posted by: acemcmac
But then you're counting on your utilities to stay honest and keep their paws out of the cookie jar! I don't trust anyone enough to give automatic debit authorization.

The thing is, you are still sent a monthly bill with 2-4 weeks notice on how much they are going to withdraw. You can always cancel it before it is withdrawn. Or you can call them and have the error corrected during that time period. You can't be harmed if you actually pay attention to your bills.

 

[acemcmac]

Originally posted by: dullard

Originally posted by: acemcmac
But then you're counting on your utilities to stay honest and keep their paws out of the cookie jar! I don't trust anyone enough to give automatic debit authorization.

The thing is, you are still sent a monthly bill with 2-4 weeks notice on how much they are going to withdraw. You can always cancel it before it is withdrawn. Or you can call them and have the error corrected during that time period. You can't be harmed if you actually pay attention to your bills.

I went there with comcast... they once overdrew $60 about 2 weeks prior to my closing the account. I really don't remember the details of why it happened that way, but it did. I knew they were going to do it and was on the horn with them for weeks in advance and months later trying to get my money back. It was a disaster.

 

[MichaelD]

Originally posted by: acemcmac

Originally posted by: MichaelD
Most utilities will offer an auto-debit service for free. That's how I pay my electric, gas and phone. It's very convenient. No stamps, no paper bills to worry about.

You just have to remember to deduct what they've taken out from your checkbook. Kinda important!

But then you're counting on your utilities to stay honest and keep their paws out of the cookie jar! I don't trust anyone enough to give automatic debit authorization.

😉

I honestly thought exactly like you did up until about...5 years ago. Up to that point, I was literally writing out a dozen checks per month, PLUS having to buy the stamps to mail them all, PLUS having to actually WRITE that many checks, tear off the payment coupon, seal the envelopes AND take it all to the post office. Bah! Never again.

I've never had a problem with any utility taking out more than they should.

 

[GuitarDaddy]

Originally posted by: dullard

Originally posted by: acemcmac
But then you're counting on your utilities to stay honest and keep their paws out of the cookie jar! I don't trust anyone enough to give automatic debit authorization.

The thing is, you are still sent a monthly bill with 2-4 weeks notice on how much they are going to withdraw. You can always cancel it before it is withdrawn. Or you can call them and have the error corrected during that time period. You can't be harmed if you actually pay attention to your bills.

And most will let you set up "one time" payments. I never setup automated, giving them permission to hit my account every month, I just schedule a "one time" payment each month. And many will allow you to set up a scheduled payment up to 30-45 days in advance, but you can edit or cancel it up to 24hrs before the scheduled EFT date

I do this with the mortgage, electric, cable, and both phone bills (land, cell). It gives me more flexibility and keeps the money in my account longer than using my banks bill pay.
My water company is small and doesn't have a website, so I use the banks bill pay.

 

[MrChad]

Originally posted by: acemcmac
Ah. Did some of them start as a check mailing and some of them later turned to EFT's?

My bank (wachovia) started billpay in 1999 and PECO was one of the original partners. I find it weird that it's saying that it'll take 5 days for PECO to get the payment.... I'm assuming that they're mailing....

My water bill will be the next one I experiment with.

I'm not sure, but I believe if that in some cases yes, the first payment is a check and subsequent payments are EFTs.

 

[QED]

Originally posted by: acemcmac

Originally posted by: QED
When I used to work for a big international bank, online bill-pay was actually a combination of the two methods you desribed.

If the payee was someone with whom we already had information on (i.e. most other large financial institutions), the payment was done by EFT transfer.

If the payee was not someone with whome we were familiar with, a check was printed out bearing the customer's account information and mailed to the address provided by the customer for the payee.

Did humans make the distinction or was it all automated? Again, I think its really weird that my bank has been doing this for 7 years, partnered with PECO from the start and it still says that it'll take 5 days....

No, there was a standard list. When you chose to add a new payee, it would prompt you to choose from a list of payees it already knew (such as Chase, MBNA, Capital One, etc). If you selected from the list, it would already know the payee's information (such as whether they accepted EFT, or if not, what their mailing address was).

If you choose to add one that wasn't already on the list, it would always go out as a paper check.

One of the features we were looking to add to the system was if a new payee was added by the customer, and the mailing address given to us matched a payee on our EFT-available list we would automatically switch that customer over to using EFT. I believe this is the method that some banks use today instead of providing one long list of available payees.

 

[allisolm]

I use Wachovia's online billpay and have for a long time with zero problems. Companies that accept EFT for payment get paid electronically, companies that don't accept EFT get checks mailed out by the bank at no charge to me. I pay all my bills (but one) through the bank since I would rather give one website the account information for all the companies to which I owe money than give many websites my bank account information, especially in light of all the customer information leakage boo boos that have occurred lately. I can pay all my bills with one or two visits to the bank website monthly and not have to go to many websites each month. That seems more convenient and safer to me.

The one bill I pay through the website is the cell phone since that gets paid with my husband's company's American Express, not with funds from my bank account.

 

[bunker]

About 95% of all banks that offer online bill payment use Checkfree to process their payments for them.

You submit all your payment info to your bank, your bank forwards that along with your money to checkfree to make the payements.

The reason some merchants will be listed as being paid by mail/printed check the first time is your bank's payment application doesn't know how it's going to be paid until they submit it to checkfree and checkfree sends back a response telling the bank's app how it is going to be paid.

A lot of times some merchants will accept EFT even though your billpay service says it's going by check. Make sure you read your credit card, utility, etc.. statements carefully. Many times they will list a different address to use for online billpay services. Once you use that address, the payment switches over to EFT.


<--- Did tech support for online banking for almost 2 years.

 

[Barrak]

I use PSECU (Pennsylvania State Credit Union) and they have online bill payers. If the company is in their system its just an electronic transfer, if the company is not, they send out a paper check for you. Once you have all your regular bills set up, it takes longer to log into the site than to pay your bills. I have been using it for about 2 years, never had any problems or missed payments, I love it.