On Paying Bills Online

sharv asks: "I'd like to hear what you all think of the relatively new online bill payment services offered by sites like OnMoney and Yahoo Bill Pay - they both seem to be powered by the same engine, from an outfit called PayTrust. I'm curious if anyone's using one of these services and what, if any, technical issues people are concerned about. Any privacy concerns? How about any problems arising from not having snail-mail copies of your statements immediately available? Any of the meatspace bureaucracies having problems dealing with this latest incarnation of paperless personal finance?"

USA - United Stone Ages

I am also from Canadian, but living in the States now, and I still can't believe how primitive the banking system down here is. I used to expect the US to be pretty high-tech, but it seems like when it comes to any kind of consumer technology, they're anywhere from 2-5 years behind where Canada is (and many European countries as well). For example, in Canada we've had widespread high-speed Internet access for about 3 years now, and some cities have had cable modems for 4-5 years. In the US, there are still numerous large cities that don't have affordable high-speed net access. Even where it is offered, it's usually twice as expensive as in Canada. As far as banking goes, I still have a Canadian bank account, and I've used Internet banking for 4 years now. That includes payment of all my bills, and the service is free.

Down here, I do have online banking now, but all I can do is view my balances and account history, and transfer money between accounts. They don't have a proper debig card system in the States either. My bank does have VISA check cards now, which are like debit cards but can be used anywhere VISA can be used. That's ok, and a lot of people are using that now, but it's even less secure than regular VISA, which makes me pretty uneasy. If someone gets my card, they can just start spending and the money comes directly out of my account. Meanwhile, I can't even remember the last time I actually made a cash purchase in Canada - it's a lot easier to pay for everything by Interac. In the US, I constantly see people walking around with their little check-books (with ID on front). It's pretty common to see people paying by cheque at supermarkets. It's very weird, because I think it's been about 10 years since I saw anyone pay for their groceries by chque in Canada. I've even seen people pay by check at my company's cafeteria. It's pretty bizarre.

Re:Or the other way around...

Actually I do the same thing, only one step further. I have all my recurring charges go to my citibank visa, and then i have that account setup that it automatically pays in full every month. Two advantages over your way of doing things. Firstly, I float my bills for 30 additional days, and secondly, it's an extra couple grand a month helping my credit record.
----------------------------

It seems just a matter of time. . .

before some criminal(s) steal a lot of money from a bunch of online bank accounts. I have no problem giving out my credit card #s online, because there's a legal limit to my liability if it's stolen. But if your bank accounts are looted, you're probably going to be stuck. And it _will_ happen, eventually, to someone.

How it works for me

I use Security First Network Bank [sfnb.com] and it works pretty well. It's a complete bank, replacing the brick and mortar variant for me. See below for the only drawback I see with this approach.

I chose this bank over the brick and mortars about 3 years ago, because the brick and mortars use custom software, which not only does not work under Linux, but also has to be installed on a computer. SFNB works from any web browser. Perhaps things have changed since then.

There's a button on their site for "Pay Bills". It brings up a table of payees you have set up. You fill in the amount for the ones you want to pay, and change the pay date if you want, or leave it at the default earliest possible Then click SUBMIT and it sets up the transactions. I find it incredibly easy compared to writing checks, adding stamps, and mailing the payments.

Setting up a new payee is a minor nuisance. They need name, address, phone number, and account id. From then on it's very easy to deal with. You can set up regular payments, with various intervals (weekly, monthly, semi-monthly, etc). I collect my credit card, utility, etc bills once every week or two and do them all at once.

They supply an ATM card. No extra charge at grocery stores, most gas stations, etc. Brick and mortar banks will nick you for actually using their ATMs, so I just get cash back from the grocery stores.

I dump the "register" of transactions periodically in case they try to do something incredibly stupid such as change things. You can annotate transactions. They include GIFs of the front and back (I think both :-) of actual checks you have written.

The only drawback in this case is having to mail in deposits; it can be a couple of weeks before you see the funds :-( Worst of all, they could easily send email when the check is received and when it clears, but they don't; you have to check your account periodically to find out. I left the stamp and return address off one check I mailed in, and it took a month before I was convinced it hadn't arrived (took the PO 2 mohths to send it back). Had to stop the old check, get a new check, etc.

I don't like their password policy; it has to be changed every few months, and if you forget the new one, you have to call them up and they snail mail a new password, so there go several days at least with no access. I have tried sending email about how this does not improve security. If someone wants to clean out my account, changing the password twice a year won't do squat to prevent it. It will only stop someone taking small amounts once in a while, and then only when the password changes. In that case, it's my own fault for not monitoring my account. But they persist.

And even more minor, the data entry field checking is very anal about the exact format of phone numbers and such.

But I will keep the account, as it makes most transactions much easier, and I don't deposit a lot of checks, and don't live paycheck to paycheck anyway. And electronic deposit of paychecks happens overnight anyway.

--

Electronic Bill pay problem.

Well, it's not a problem with the service but rather a problem with how other companies deal with it. My housemate is currently looking at buying his own house. And therefore is spending a lot of time dealing with lenders and mortgage companies. One problem that has come up is that for christmass this year his parents decided that rather than buy him a gift they would add him to one of their credit cards and let him buy his own gift.

However now that he's applying for a home loan he needs to prove his credit and sources of income. And that card is causing some major problems. His mother who's the main cardholder has been paying it with a direct deposit from her bank account. And the morgtage company won't accept the card as being paid for unless they can see the actuall payments. But all his mom gets is her bank statement showing the money being transfered. And since that's from her main savings account she is not willing to provide them with the entire statement.

The lending company won't even accept the bank statements with everything but the payments they're interested in whited out. He tried sending copies of the Card bill showing no balance and showing that previous payments had been received but they won't accept that. They only know how to deal with cancled checks....and there simply aren't any.

Of course this is more complicated than normal since he's just an extra card holder and not the main person on the account. But it is something to watch for.

No Liability

I refuse to use on-line bill paying until such time as the cost of paying the bill goes below the price of a postage stamp.

That's a good point. But one thing that I haven't seen addressed at all yet is liability. When I was given CheckFree software as a gift one year, I looked into the agreement carefully. I threw the software away when I got to the part that released CheckFree from any liability whatsoever should a bill not be paid on time.

Now I can understand there are many ways the liability would fall on me. But if I am relying on another service to pay my bills, and they introduce a delay, or send payment to the wrong party, or [god forbid] get cracked, I don't want to be the one that gets stung.

So... sorry, but no thanks. It only takes me an hour or so each month to manage my finances, so until a time comes that a bill paying service will stand behind their service and admit their fault when they screw up, I'd rather just do it myself. I retain all liability, but then, I'm the one in control.

Re:eBills are Us

I totally agree on this.
I use Bank of America, which use to really good bank until about early '90's when they started buying out people and I think bought out themselves. Anyways, they wanted to charge me to pay bills through them in the same matter as the topic discusses. I don't get it. They have my money, and who I do business with is also at BofA, and they want to charge me money so I can be a happy customer!?!

However, I think in the near future this will stop. Banks will relize that if someone like Yahoo can provide services like a bank, they will stop charging money. These kinds of services will simply become no cost additions to your account.

Online bill payment

As former support agent for an online bill payment FI, I have seen some of the major problems with some of the payment forms. Some payments are cut as checks and mailed out to the payees. Others are made as an electronic payment to the payee. Ironicaly it seems that the EFT (electronic funds transfer) transactions are the one that are most pron to problems. You will make a payment that might get mis-applied to a different account or lost or something. You will then be required by the payee to submit proof of payment. This usually means that you have to show a front and back copy of a canceled check. When the payment is made by EFT this is, of course, impossible. A claim is then required to be submitted to the EFT originator. A claim agent will get the EFT transaction number and fax it to the payee. Sometimes it is nearly impossible to see where the funds were mis-applied. Most of the time those companies that accept EFT payments are able to fix any problems fairly quickly, but when an EFT is made that consists of thousands of payments all at one time, some fall through the cracks. The online banking industry is getting better all the time but it still needs some work. More than once the only way to get your payment to certain people is to mail it like times of old. Once industries start to have better accountability of their online payments the system will function better. I do know some people that only use online payment for all bills. They seem to be very happy with the current services.

Hmmm... I suppose we should just ignore MSoft's...

...reputation for manipulation, their abysmal quality standards, and their obvious lack of concern for security, lest we be accused of hypocrisy?

No, thanks.

BillPay works nicely

It's not a perfect interface, but we've been using it for about two months now, and it does what it says it can.
It does require an additional password beyond one's regular Yahoo! password, so that's a slightly extra level of security...but, I've come to realize nothing is truely secure :(

BillPay was simple to implement...we still recieve our bills, we just use it to pay them.

I can even get in through my Palm/OmniSky combo, so I can pay bills while I'm on vacation in Hawaii!

Re:Mathematically Impossible

When I get home, all the coins in my pocket just get tossed into my Klein bottle.

No Way!

I'm really surprised I'm the first to post saying there's no way I'd ever let any of these folks get their hooks in my checking account.

I'm further surprised that people who are ostensibly concerned about privacy, abuse of information, and tracking via banner ad cookies are all so willing to give complete strangers the right to take money from thier account.

Although I have credit cards, I refuse to allow any automated withdrawals from my accounts, and I refuse to ever have a debit card for the same reason. If you're going to do this, think seriously about it first, and decide if your freedom, privacy, and possibly your assets are a good exchange for a little convenience. C'mon, how long does it take to pay bills with a checkbook for cryin' out loud? At least by looking at them, I'm less likely to get ripped off - like the extra $78 one company tried to take just recently. Also, as someone pointed out elsewhere, I *have* my cancelled checks - this comes in handy when Postal Service employees steal checks out of the envelope and cash them, as happened last year. I had a paper trail that helped put the bastards away for a long time. If someone swipes cash from me electronically, it's just plain gone - heck they can't even audit legitimate transactions, how well do you think they'll find fraud?

Anything that is a direct vacuum hose into your account is a real and significant risk! Just ask my brother, who shortly after graduating from college had over $5000 stolen on a debit card with no recourse. (I understand this was such aproblem that there is some recourse now, but we all pay for that fraud protection in higher prices.) The theives spent his account dry, automatic overdraft protection from the Visa kicked in, and then they exhausted his remaining credit limit. All in less than twelve hours and without physical possesion of his card.

As an IT professional, I realize that the technology, processes, and laws for performing these kinds of transactions safely and securely are years, if not decades away. Even less intrusive/automatic things like Quicken are not so innocuous: A friend recently had a very tough time in an IRS audit after his computer crashed - he paid his bills electronically and had no records of his expenditures. He figures that mistake cost him maybe $15,000. You can buy a lot of stamps for that.

I suppose the people who use online bill paying are signed up for their local grocery store's affliate card program and have debit cards. (There's a particularly insidious affiliate card program run by Randall's grocery stores here in Texas: in order to avoid exorbitant prices and have the privilege of cashing or writing a check, you have to have their "Remarkable (Ripoff)" card, which identifies you and your purchases with every use.) Where do you think that data goes? If you think they're not building a dtabase of your particular buying habits in their data warehouse, you're incredibly naive. It's none of Randall's business what I in particular buy (although my purchases are not particularly interesting) - the only thing they need to know is what everyone has bought *in aggregate* from the store, but that's not nearly so valuable for marketing purposes. You can't have privacy and that sort of data collection, which is one reason I'll never carry a smart card, like the new blue card AMEX is pushing so hard.

Bottom Line: you either care about privacy or you don't. If you do, act on it, and refuse to give up your rights (because that is exactly what you're doing if you sign up for these services.

Re:Can't speak for PayTrust...

I've been using Quicken for around ten bills a month for years and have had only a few problems.

The one problem I have had is that creditors will sometimes change your account number without telling you. If you don't notice the new number on the stub, the automatic service will happily pay to the old account. It usually takes a month or so to straighten that out.

The other issue I had was that I get my insurance and credit card from the same company, but from two different divisions. For a while, all my credit card payments were going to my insurance account. I was simultaneously getting "deadbeat" notices and "why are you sending us all this extra cash" notices from the same company.

Bank???

I personally have never used any of these services. I do, however, do 100% of my bill paying online through my bank. This bill paying is free, instantanious, and convienent. Also, I have neever had a problem with security, an unauthorized payment, or any of that nonsense.

While i live in Canada, I fid it hard, nay possible to believe that none of the larger US banks offer free online bill payment. It would only make sense for them to do so, fo rthe simple reason that it helps the customer AND cuts their costs at the same time.

I would reccomend online bill payment to anyone, but I wouldnt go through a seperate company and pay for it. Check out other banks, there must be one that has the options you need./p.

These services are way beyond Quicken/Wells Fargo

I was using Wells Fargo for a while and it worked fine, but these new services are an order of mangitude more than that.

I evaluated Paytrust, Statusfactory and Paymybills and went with Paymybills. They seemed to have things the most together, and on top of it they had a free promotion.

These services receive your paper bills for you, scan them, OCR them and shred them. For me, this is the huge win, not just writing the checks. They can thus automate even variable bills while still giving you manual intervention, soemthing you can't do with EFT bills arranged with the phone or power company.

I got tired of filing all that paper, let alone writing all the checks. paymybills is going to send me a CD with all my bills at year's end for a $25 fee, and that is all I'll file.

Paytrust was seriously lacking in some areas. It doesn't even offer you an archive. Statusfactory wants $50 for the CD.

All of them need to offer instead an ability to download (or have mailed to you) archives of the actual GIFs of your bills. They might go out of business and then you wouldn't get the CD.

It would be nice if they also could handle statements like airline frequent flyer mile statements, health insurance payment notices and other things that clutter my mailbox.

They need to learn how to use encrypted e-mail and just mail me the bill plus ready-to-use URLs.

But this is a huge step forward. Though they plan it to be a temporary one. As more and more people use this, their plan is to get all the billers to just send electronic bills to the bill handlers, and that's fine with me.

One positive feature about the Wells Fargo bill-pay however -- if you use it to send an ordinary check to somebody, they get a check drawn not on your account but on Wells Fargo Bank. That's almost as good as a certified check, and it's free.