Jul 082012
Online banking, woman with laptop

Online Bill Pay: Should You Use Your Bank or an Outside Vendor?

By Joyce Morse for SafeBillPay.net

Most banks today offer the option of online bill pay; however, there are several independent companies that also provide online bill pay services. They are becoming more popular but many people still do not know the difference between the two and the limitations of each.

Online Bill Pay through Your Bank

If you choose to use the online bill pay service through your bank, you can set up as many payees as you wish. They can be businesses or individuals, and payment can be sent electronically or by paper check. Many businesses are already recognized by banks such as credit card companies and you do not even need to provide a payment address.

You will need to provide some information to the bank to set up these accounts:

  • Your account number with the company
  • The payment amount
  • The payment date
  • Phone number and address if it is not on file

You will have to set up each account individually and instruct the bank which account to use if you have more than one. Many banks also offer mobile banking with an app where you can control your payments from your smart phone or other mobile device. However, you usually cannot add a payee with the mobile app or make other changes to your account other than setting up a payment to an existing account.

Banks will send you reminders through email or text messages when your payment is due or when it has been sent if you request it. You can also set up automatic payments so you don’t have to remember each month. It is also guaranteed by the bank to be paid on time if you follow the procedures that they provide.

Independent Bill Pay Vendors

You can also use an independent company to pay your bills online. This has become more popular in recent years, which means you will have more companies to choose from. They provide similar services to a bank’s online bill pay service, but there are some key differences.

With an independent company, you can set up payments through more than one bank account. This is helpful if you have accounts at more than one bank or if you manage another person’s account, like a parent, at a different facility. Instead of having multiple logins and passwords, there is only one to remember for all of your accounts.

You can usually pay individuals as well as businesses, but not always, so be sure to find out before you sign up. A major difference between banks and independent online bill pay services is the cost. Many banks offer the service for free since you have an account with them. Independent companies usually charge for the service, either a monthly fee or by transaction.

If you choose to use an independent company, make sure it is a reputable one that has been around for some time and has a good credit rating with the Better Business Bureau.

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