Online Bill Pay: Pros and Cons

Online bill pay services offer a convenient, safe and inexpensive way to ensure that your bills are paid on time by setting up an account to make one-time or recurring payments. If you have bills from several different sources—and most people do—online bill pay is worth the time and effort to set up. The source of funds for the payments is usually from your checking account. All bills and transactions are accessed and processed through your online banking website.

How does bill pay work?
You enter a person or company you want to pay, and the service sends your funds electronically or mails a paper check to the payee. You can receive, view, and pay an unlimited number of bills for up to a year in advance of the due date and all from one website.

To set up your bill pay:

  1. Gather all your bills, including account numbers and the addresses to where you mail the payments.
  2. Enter each biller’s information into your bank’s online bill pay platform.
  3. Choose when to send the payment.
  4. Select recurring or one-time payment.
  5. Set reminders to track when each bill is due.

Payments can be sent from your account in two ways: electronic funds transfer or a paper check. Working with companies who will accept electronic payments can create a seamless online payment arc. Online bill pay services will mail a check in situations where electronic payments are not accepted. Be sure to allow extra time and plan ahead—usually five business days—for the check to be cut and mailed.

How long does it take for bill pay to process?
Generally, your payment is received within 2 to 7 days, depending on whether or not it is sent electronically or via paper check.

What is the cost for online bill pay?
Many banks offer this service free to their customers. Ask the financial institution with which you currently do business whether they offer online banking.


  1. Convenience. You can pay and monitor most of your bills from one site. Once an automatic payment plan is established, your bank will handle the rest.
  2. Environmental Issues. By eliminating paper bills and check writing, you reduce your impact on the environment. Not only do you save paper and trees, but you eliminate the carbon footprint left by snail mail. Plus, you don’t have to buy and keep on-hand a constant supply of stamps.
  3. Helps Your Credit Score. When your bills are set up to be automatically paid, you should rarely miss a payment or be delinquent. These are two things that can majorly hurt your credit score. In fact, when credit scoring agencies see that your bills are always paid on time, it helps your credit score by keeping it high or boosting it to a higher bracket.
  4. Less Chance of Identity Theft. If your bills are not mailed to your home and you are not mailing in paper payments with credit card or checking account numbers, you reduce your risk of identity theft. There are risks when paying online as well, but the security surrounding these payments is typically far greater than the security offered by an unlocked mailbox.
  5. Saves Money. Since you’ll no longer have to pay for checks, stamps, envelopes, or gas for trips to the post office, having your bills paid automatically saves you money too!


  1. Potential Cost. Some companies will charge you a fee, and since automatic payments actually save them money, it’s a very sneaky tactic. Don’t fall for this fee. If your biller wants to charge you, pay them the old-fashioned way and make them process a paper check instead.
  2. Losing Track. With automatic payment plans, it can be easy to forget what gets paid each month and when. This can lead to unnoticed bank errors or mistakes. As a precautionary step, you may want to have the due dates of each automatic payment noted on your calendar. To avoid being held liable for a bank error or computer glitch, check online to make sure that your payments were submitted.
  3. Overdraft Fees. You still need to make sure you have enough money in your checking account to cover automatic payments. Otherwise, you will incur enormous fees via bank overdraft charges.
  4. Stopping Payments. Automatic payment plans can be set up in a matter of minutes. But stopping them can be much more difficult. Check with you bank on how best to do this.

Final Comments: If you have never used online bill pay, consider easing into it. To begin, just pay a few of your bills online. Remember…you can always go back to your traditional method of payment if it isn’t a good fit for you.

Important: For professional help in setting up your account, consult with the banker at your local branch. To maximize your experience, be sure to bring in those bills, including the account numbers, that you would like to have set up for online payment.  Once you start mastering online bill pay, you will find that the pros greatly outweigh the cons.

Written by: Our Writing Team

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