Nov 092012

By Renee D. for

The internet has of course been around for decades now, but services like online bill pay are fairly recent. Also known as “electronic bill payments” or “e-bill payments”, online bill pay is a unique service that most banks, credit unions, and specialty companies offer consumers for both business and personal need.

What is an Online Payment Service?

As the name implies, this service makes it possible for you to pay your bills via the internet as opposed to mailing them in through the post. The exact methods of pay would depend on the exact company or financial institution.

Online bill pay

Online bill pay has grown in the last few years.

For instance, some bill pay systems are set up so money would be deducted directly from your checking or savings account with a bank or credit union. Alternatively, payment could be made using a credit card or debit card. In fact, there are some services that accept both forms of payment.

Components of Bill Pay Services

Along with different methods to pay bills online are system features that vary for each business or financial institution. However, every bill pay service offers many of the same features, such as:

Delivery – Due to consumer demand, most payments are sent in real time. On the other hand, there are some payments that are processed as part of a batch. With this, payments from multiple customers would be sent together but to different creditors.

Fees – Although it is common practice for fees to be charged when sending money via a transfer or bill pay system, the amount varies from one company or financial institution to another. Because the fees charged can be significant, you should familiarize yourself with the fee structure prior to using any service for paying bills online.

Retail or Peer-to-Peer Payments – While most of the better known payment services accommodate payments of all types, there are some that only process payments to retailers and peers, which would include online retailers like,, and, among others.

The EBP System – Electronic Billing and Payment

The National Automated Clearing House Association’s electronic billing system was created by The Council for Electronic Billing and Payment (EBP). This model made it possible for specific billing applications to be implemented and payments to be submitted by customers. Once approved and launched, EBP systems provided the ability to pay bills over the phone but also via the internet. As part of this new system, customers were also given the opportunity to access financial and billing information.

Any good online bill pay service will offer efficient customer support by telephone and email to help customers facilitate payments, get answers to important questions, or raise concerns. There are other benefits to paying bills online. For instance, making payments is easier and more convenient but also less expensive since the need for stamps is eliminated. Online bill pay is also environmentally friendly since fewer trees are cut down to produce paper.

Between banks, credit unions, and special bill pay companies, different types of systems are used. However, the two most common systems include the following:

Bank Aggregator – With this model, payments are made at an aggregator or consolidator site. In most cases, the payments are facilitated by the individual’s own bank via website. The greatest benefit to this option is the ability to pay several creditors at once that are already registered and approved to receive payments.

Biller Direct – This second model allows an individual to make payments through just one biller. With this, the bill pay service could accommodate bills issued from a creditor that are sent to the creditor’s website. For instance, an electric or gas bill would authorize the bill pay company or financial institution to be a third-party through which a person could make the payment.

Team Approach

While it might seem that paying bills online is a process that involves only the debtor and bill pay facilitator, in reality there are several parties involved. For instance, bankers, billers, consolidators, and aggregators also play a key role in bills being paid online. Obviously, the exact parties involved depends on the service but also the consumer’s specific need. Some of the primary players in online payment services include:

Biller Payment Provider or BPP – This is a biller’s agent through which remittance information would be received on behalf of the actual biller

Biller Service Provider or BSP – Also a biller’s agent, the focus for this is not on the customer but instead on the biller

Consolidator – A consolidator is a biller service provider responsible for consolidating bills from more than one biller. In addition, the consolidator would consolidate other Bill Service Providers, which would then be presented to a Customer Service Provider or CSP.

Customer Service Provider or CSP – As the title implies, this is a customer support professional that provides answers and assistance to individuals and businesses but other presenters of bills as well. As part of the CSP’s job, customer would receive assistance with enrollment, given approval to present bills, and provided ongoing support for issues or concerns that might arise.

Mar 212012
Young woman paying bills

Make scattered bills a thing of the past by paying and storing your bills online.

Would you like to free yourself from paper bills altogether? How about being able to see and pay all your bills on one website? Not to mention saving trees, and cutting down on the 48 billion paper notices and bills sent by the U.S. Post Office every year.

A new service called claims to help you collect and organize your bills — everything from credit card and mortgage payments, to student loan debt and auto payments. also has a free smartphone app, so you can see and pay your bills on the phone.

Best of all, the service is free to the consumer. It’s paid for by the billing companies, since they save money not having to send out paper bills. And they can post important notices like required privacy forms or billing practices online for each customer to read in his or her own account.

Terry Savage of the Chicago Sun-Times writes:

No more going to your mailbox or post office box, or risking late payments because you were traveling. Now the bills arrive in your Manilla account, where you can see the exact bill that would have arrived in paper form. You can see the exact details — even more than many billers send in the mail. And you can reach out to contact the biller or dispute a charge, just as if you had received a paper bill.

Manilla will notify you when bills are coming due, so all you have to do is click and pay securely. And if you have several bank accounts (for business and household, for example), you can choose which account to pay from when you are paying your bill.

There’s a handy calendar on your secure home page, showing you regular monthly bills that you receive and the date by which they must be paid. Plus, Manilla will send you reminders by text or e-mail when regular bills are scheduled to arrive — or if you’ve failed to pay a bill on time.

In a way, is also a records storage service, since it saves all your paid bills for years. It also has a search feature to search through past bills quickly.

I haven’t personally tried, but I’ll check it out. If you have used it, please let us know how it’s working out for you.

Nov 152010

Clearly there is some element of risk involved in any sort of online financial transaction. Credit card numbers or bank account numbers can be stolen, passwords intercepted…

I recently had an unauthorized $400 charge against my debit card. Someone used it to pay for a plane ticket. My card is always in my wallet, but I often use it to make purchases online or pay bills. Apparently the card information was intercepted or stolen somehow.

The https prefix indicates a secure website

The https prefix indicates a secure website

The card has been closed and my bank refunded the charge, but the point is that online financial transactions carry a risk. Online bill payment is no exception.

So how do we minimize the risk? How do we know that an online bill payment website is secure? How can we safely transfer money online, or buy a product without worry?

1. Make sure the bill payment website is secure. The website address or URL should begin with https rather than http. https indicateds a “secure socket layer” or SSL connection, which is one in which data is fully encrypted and therefore protected.

Typically with an https website you will see a padlock icon in the corner of the browser window, either at the top or the bottom (or in some cases it may even turn the URL address background light blue or green). Clicking the padlock icon reveals the site’s security certificate and allows you to read about the protection that this affords.

2. Make sure the login process is secure. A quality bill payment website will usually give the customer two options: either to pay instantly as a guest, or to register and save payment information for future transactions. Neither one of these is necessarily better – it depends on your preferences – but both options should be secure.

If you’re paying as a guest, the website will usually ask only for your email address, then ask you to choose a payment option. Payment options could include online bank account, credit card or debit card. If you choose to pay by credit card or debit card, you may have to verify the card through 3D secure-a process used by major credit card companies as an added XML layer for online credit and debit card transactions. Visa call this process “Verified by Visa”, MasterCard call it “MasterCard SecureCode”, JCB International call it “J/Secure” and American Express call this “SafeKey”.

When choosing this option, look for specific statements on the website that credit card or debit card information will not be saved or stored in any way.

If you choose to register, a well designed and secure website will ask you to choose a name and password for future logins, and may also ask for your name, email address, physical address, and telephone number. You may even be asked for your date of birth, driver’s license number or passport number, though in my opinion asking for such information is excessive and carries the risk of identity theft. The same is true for your social security number. There’s no good reason for a commercial website or bill pay website to ask for such info.

You will often be asked to set up security questions in case you lose your login info. This is legitimate and common. Some websites now use cell phone verification. If you attempt to log in from any computer other than your usual computer, the website will send a verification code to your phone by text message. You must then enter the verification code into the website to proceed.

While these procedures may seem excessive, they are part of a good security system and they are there for your protection.

%d bloggers like this: