Online Bill Pay Services: What You Need to Know

Are you overwhelmed with all the bills you have to pay every month? If your answer is yes, the good news is that you can easily automate the process. With modern solutions, you won’t have to worry about forgetting to pay your bills on time and hurting your credit score.

Keep reading to learn about types of bill pay services, their benefits, and tips for choosing the right option for you.

Bill Payment Services: What They Are and Their Types

Online bill payment services help customers manage their finances and keep track of their regular payments. Individuals can decide whether they want to make one-time payments or set up recurring ones for maximum convenience. This method can be used for everything from household bills to loans, insurance, and mortgages.

And what about the types of online bill payment services? They include the following:

• Bank services for bill payments. This is a standard option that the majority of modern banks offer to their clients. You can set up automatic bill pay directly in your bank account on the website or in the bank’s app.
• Third-party bill payment services. Another option is to install specialized third-party software or create an account on a third-party website. Such services are not linked to specific banks and commonly come with a range of money-managing features. Xero is an excellent example of this breed of financial tools.
• Mobile app-based bill payment services. These are similar to bill payment software but available through mobile apps. A good example of an app for online bill payment is Quicken. It is a financial manager with lots of features besides bill payment and is available on Android and iOS devices.

How to Use Online Bill Pay Services

Wonder how to start using a basic bill pay service using your bank account? Here are the steps to take. 

Setting up online bill pay

The first step is simply to log into your bank account, or create one if you don’t have it. Numerous banks provide their clients with a free bill pay service in their checking accounts.

Adding and managing payees

Once you have an account, you can add payees. You’ll need their name, billing address, and your account number. You can manually enter these details or select a payee from the system’s list of clients, if applicable. Furthermore, you can manage your payees anytime, adding new ones or removing outdated entries as needed.

Scheduling payments

You can then decide when you want to send the payments. In most cases, you can both make a one-time payment or set up recurring ones. The latter option is particularly convenient for people who struggle to pay their bills on time. For instance, if you constantly miss your Internet bill, you can set up a regular payment once and never worry about it again.

Tracking and managing payments

If you set up automatic monthly payments, you should still occasionally check whether transactions are successful and if there is any weird activity there. You can look up your payment history, payee’s details, paid amounts, etc. In case some of your (or the payees') personal details change, you can always edit them.

Benefits of Using Online Bill Pay Services

Here are the main benefits of opting for a third-party payment service.

Convenience

Automatic bill pay is highly convenient. Once you add all the payees, you don’t need to worry that your payments will be late if you are out of town or have a busy schedule. When you use apps to pay bills online, you can also both perform transactions and look up any information related to them on the go.

Saving money

Paying your bills online saves money, as you don’t have to drive anywhere or purchase envelopes or stamps. What is more, depending on your credit card, you can earn points or cashback this way.

Security of payments

When you have to deal with paperwork and send your payment via mail, there is always a risk of your data or money being stolen. As for online payment, the software uses encryption and other modern security measures, which is far safer by comparison.

A chance to improve your credit score 

One of the most important reasons to never miss your bills is how much that can damage your credit score. When you always pay on time, you improve your score, which is extremely important if you want access to better credit card options, loans, and mortgages in the future.

Tips for Choosing the Right Online Bill Pay Service

If you want to use a specialized app or website to pay your bills online, there are several factors you should take into account.

Assess basic functions

Some services allow you to manage finances from A to Z, perform retirement planning, and more. Others are designed for basic bill pay and don’t have an extensive selection of features. So, you should decide whether you want your platform to have financial tools besides online bill payment.

Compare cost

Some services are completely free to use. However, others will require you to pay an annual fee. If you are entirely new to automatic bill pay, choosing a free option is reasonable, and you can always upgrade later on.

If you cannot decide whether a service is worth its cost, there is often a free trial so you can see for yourself if its features work for you.

Read reviews

Another tip is to check the reviews of various bill pay services so you get an idea of what others like and don’t like about them. There are plenty of lists featuring the most popular services, so you can start from there to choose options to try or research.