Introduction to Online Billpay

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Introduction to Online Billpay

Online bill paying has moved to the mainstream. According to a October 2019 report by the Credit Union Times, 57% of all bills are now being paid online with 21% being paid via mobile applications. Not surprisingly, Millennials and Gen Xers are leading the way, paying 61% and 60% of their bills online, respectively, according to the same the study.

This is not surprising: Online bill paying is convenient and environmentally friendly. It can also save you money.

Here are the basics of how online bill pay works and the benefits that come along with it.


Think about when you mail your mortgage, car, or student loan payment each month. You write a check, record the amount in your checkbook's ledger, address an envelope, find a stamp, and go to your local post office or the nearest mailbox to mail the payment.

When you pay your bills online, you simply log onto your bank's website, enter your user name and password, and pull up your account. You can then manually send your payments to your credit card company, auto lender, or mortgage company. Alternatively, you can set up automatic payments, where your bank sends your payments due on the same day each month, with no need for you to log in and initiate the payment each month.

Most financial institutions today offer this service. Moreover, the vast majority of them offer the service at no charge. If you have questions about what services your bank offers, call your financial institution for assistance.

Cost savings

That leads to the next benefit of online bill paying: It can save you money over the long run.

If your bank or credit union offers free online banking, it makes financial sense to sign up for the service. Consider these numbers from ClearPoint Credit Counseling: The company estimates that the average U.S. household pays 15 bills every month. If you factor in the cost of a stamp for all of those bills, it comes out to more than $70 a year. If you sign up for online bill paying, you will not have to pay for as many stamps.

Also, those calculations do not factor in the costs of an envelope or the gasoline you spend driving to and from the post office.

Now, $70 a year might not seem like much money, but it can add up.

Environmental factors

Online banking is environmentally friendly. Think of how much paper you use when paying bills using paper statements your creditor sends you a paper bill. You use an envelope to send it back. You tear off a check from your checkbook to write in your payment. That is a lot of paperwork that can be minimized when it comes to online banking.


Some consumers are hesitant to sign up for online bill paying because of security concerns. They do not want hackers to gain access to their accounts. However, you can take simple steps to protect your accounts.

First, choose a password for your accounts that will be difficult for others to crack. Make sure to include numbers, symbols, and letters in your password. Secondly, be aware of phishing scams. Your bank will never ask in an e-mail message for your password, ATM number, or Social Security Number. Never give out personal information online or over the phone to someone claiming to be from your financial institution. If you receive such requests, the odds are good someone is trying to gain access to your personal information.

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