Online Bill Paying Review

Introduction to Online Bill Paying

Online bill paying encompasses a lot of services and products. We found reviews for PayPal and Google Checkout -- two services that allow you to make online purchases (but not necessarily pay specific bills) -- at CNet.com and Consumer Reports. We also found reviews at Money magazine and CNet.com for Quicken and Money, two financial software packages that offer online bill payment. Articles at Bankrate.com provide useful how-to information, along with pros and cons of online bill paying in general.

Paying bills online is a secure way to avoid escalating postage costs and cut down on check writing, say many reviews. There are an increasing number of online bill-payment options. Those include banks, specialized bill-pay websites, portals providing bill or peer-to-peer payments, bill-pay enabled software and credit card companies, as well as paying each individual biller directly on their website. Online banking in particular has gotten more sophisticated, allowing customers to pay bills, transfer funds and manage accounts online. Banks have also added more bells and whistles such as aggregated account data, mobile banking and customer banking alerts for their clients.

To distinguish between these services, we first need to define a few terms. You may think of "paying bills" as the entire process: going through your mail pile, looking back at your checkbook to see when you last paid up, and writing and finally mailing the check. But the financial world defines the steps involved more precisely. "Bill presentment," or actually receiving and viewing the bill, is the first transaction. "Bill payment" is the act of transferring money to the vendor, either electronically or with a paper check.

With such a diverse range of services to choose from, some consumers overlook the fact that more and more companies now allow customers to directly pay bills online, and some offer incentives for those who sign up to do so. Even many utility companies (which seemed slow to offer websites) have online bill-payment options. So before you sign up for a fee-based bill-payment service, it's a good idea to check with companies you do business with regularly, including stores, utilities, banks and credit card companies. You might find that you are already closer to total online bill payment than you suspect.

Because of that, experts say that if you only have a handful of bills to pay each month, subscribing to a full-featured service like Paytrust.com (owned by Intuit -- the makers of Quicken) may be overkill. Many articles also question the need to pay extra for online bill-payment services when so many banks and credit card companies now offer their own free online bill-payment services, which often add extra perks such as airline miles, affinity points, cashback bonuses and more.