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Your Money

Pay Bills Without Stress

Online payments eliminate late fees and lost checks—plus you save on stamps

Banks would like you to pay your bills electronically, and they’re making it easy and profitable for you to do so.

And while change comes slowly when it involves our money, millions of Americans have decided that the advantages of e-payments are worth it. What began as a sluggish stream of people viewing and paying bills online is turning into a raging torrent.

The research firm TowerGroup says there were 1 billion online bill payment transactions in 2005 in the United States; it estimates that the number will rise to nearly 4 billion by 2012.

For consumers, online payments save money—44 cents in postage for each check mailed, plus the cost of buying checks—and the time it takes to write and mail checks. Environmental savings can also be considerable, especially if people stop receiving paper bills and bank statements as well.

Most banking institutions now offer Internet banking and online bill paying services. “Online bill-paying is secure,” says Nicole Sturgill, research director at TowerGroup. “Financial institution sites contain more authentication mechanisms than most online shopping sites.”

Yet cyber scammers do manage to victimize some people who bank and pay bills online, breaking into their accounts and transferring funds without authorization. Anyone who puts their money online needs to take steps to avoid this very real danger.

The Federal Deposit Insurance Corporation offers a few tips:

  • Change your passwords frequently. If you make them a combination of letters, numbers and symbols, they’ll be hard to crack.
  • Don’t do your banking or bill paying on a computer used by the public, such as one in a library.
  • Don’t click on links found in unsolicited e-mail and strange websites—doing so can infect your computer with malware that reports your keystrokes back to hackers.
  • Make sure that any online bank you deal with is legitimate and that your deposits are insured.
  • Frequently check your online accounts to watch for unauthorized transfers.


You can find more details on security in this article in FDIC Consumer News.

Finding convenience and security

Is it time for you to join up? There’s no shortage of people who say it’s the way to go.

“I’ve never had an issue with paying bills online in the years since I signed up,” says Gerard Corbett of San Bruno, Calif. “It saves time and money because you can avoid late charges and going to the post office.”

Erin Mitchell of St. Petersburg, Fla., says she and her husband hesitated over the new technology. “It wasn’t until one of our checks went missing in the mail, causing us a lot of grief, that we decided to try online bill paying. Now we love it,” she says.

There are some complaints, even from users who are satisfied overall. “It does take four days or so for the bank to generate a paper check if the vendor doesn’t accept electronic payments,” says communications consultant Katherine R. Hutt of Washington, D.C. “So you have to be a little bit organized. I do still have an old-fashioned checkbook for those times when you absolutely have to write a check on the spot."

What are other reasons people don't use online banking? >>

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