Today we look at online bill payment. Is it easier than writing a check? Is it more accurate? Can we save paper?
My answer: It is difficult to say at this time.
Here is my raw data and some categories of bill paying options. To start, you have to get the bill:
- Bill presentment (statements)
- mail - bills are sent in an envelope to a customer's home or business
- direct - billers interact with customers directly via email or texts to mobile phones
- consolidator - multiple bills are delivered to a website (OnlineBank) and presented as a group to a customer
Then you have to decide how to pay it:
- Bill payment
- cash - customers walk into an office and pay with cash, check or credit card
- mail - customers send a check to a company
- direct - consumers pay directly at a biller’s website
- indirect - consumers pay billers through an outside website (Quicken) or using software on a payer’s financial institution website (BillPay) or another institution (PayPal)
- automatic (internal) withdrawal - bank makes your loan payment for a loan you have with them, from your account
- direct debit (external) withdrawal - you authorize a company (CableTV) to take a specified amount from your bank account on a periodic basis
- automatic renewal - when you subscribe to a magazine, you may be authorizing them to charge your credit card again on an on-going basis, prior to subscription expiration, unless you tell them not to do so.
The following are alternative ways to pay for certain kinds of purchases, but usually NOT recurring monthly bills.
- Electronic Funds Transfer or EFT
- transfer of funds initiated through an electronic terminal, telephone or computer to order, instruct, or authorize a financial institution to debit or credit an account, such as
- point-of-sale transfers at a store
- ATM (automated teller machine) transfers
- direct deposits or withdrawals of funds
- transfers initiated by telephone
- transfers resulting from debit cards (but NOT credit cards)
- Online banking
- involves deposits, bank statements, balance inquiries, stop payments, loan applications, etc.
- In Person banking
- when you go into a branch and talk to the bank teller or officer and do your business
That's enough about money math for now. Did you notice that even though I talked about banking the whole time, there's not a single number here?