The Details About E-Bills and Bill Payment
By Gail Rickards
I just read the following projection from a just-released
study conducted by the Internet Research Group: "By 2002,
25% of all U.S. households will be able to view and pay at
least 8 monthly bills online."
What does the statistic translate to? 330 million bills won't
be printed on paper, placed in envelopes, stamped, carted
to the post office, sorted, shipped, and delivered to our
Instead, they will appear on bill payment sites, looking
exactly as they would if they had been printed on paper. Securely
and quickly, a graphic digital file for each bill will arrive
at the correct site according to each customer's instructions.
Over the next 18 months, e-billing (shorthand for "electronic
bill presentment") will make online banking very attractive.
E-bills will take most of the work out of your bill paying
How Does Bill Payment Work Without E-Bills?
Setting up bill payment takes your time and effort. For each
paper bill you receive in the mail, you enter the company
or person to pay, the payment address, amount owed, and date
due. You also have to check whether a bill is one-time-only
or should be paid on a regular (i.e. monthly) schedule.
The bill-payer handles your bills one of two ways: 1) if
there is an electronic address for the payee, it originates
an electronic funds transfer (EFT); or 2) if there is no electronic
address, it issues and mails a check. Today, checks are used
more than 50% of the time because the majority of companies
are not set up to receive electronic payments.
Next month, you receive your bills in the mail. New bills
must be entered into your bill payment system with all the
required fields completed. Recurring bills (such as your monthly
mortgage or car payment) are paid automatically before their
due date. You can cancel payment before the due date, but
if you decide later that you want to re-start automatic payment,
you have to re-enter the necessary information.
E-Bills Simplify Bill Payment and Add Flexibility
An e-bill is delivered electronically to your bill folder
in your bill-payer's site. Then you have a variety of options
for how it gets paid:
- You pay it yourself.
- Your bill payment service pays it electronically this
- Your bill payment service pays it every month--as long
as the bill doesn't exceed a pre-determined dollar limit
that you set. If your utility bill suddenly doubles, for
instance, your bill payment service will ask you online
whether to pay it or not.
Are E-Bills Safe?
The transmission of an encrypted e-bill file to your bill
folder on your bill-payer's site uses the latest security
technology. The site is secure, and you have to log in with
a unique ID and password.
You have other protections, too:
- Regulation E* covers research and resolution
of Electronic Funds Transfer errors, including those made
in online bill payment.
- Stop payment rules (spelled out in the Uniform Commercial
Code) apply to any payment you authorize--electronically
or on paper. Be sure to contact your bank before the transaction
is charged to your account.
- You contract with bill payment services. Major bill-payers,
such as CheckFree, guarantee their services, including handling
The E-Billing Foundation is Solid
The ACH Network, a highly reliable and efficient nationwide
electronic funds transfer system that processed nearly $20
trillion in transactions last year, is governed by the National
Automated Clearing House Association (NACHA) Operating Rules.
Last year, NACHA released electronic bill presentment and
payment practices crafted by a high level group of billing
companies, bankers, and service and technology companies.
The practices set technical and business standards based on
- The security and privacy of billing and payment information
- E-billers and bill-payers must act on requests and instructions
in a timely manner.
- They must maintain adequate records and tracking systems.
- Problem notification must occur so that e-billers and
bill-payers can take corrective action.
- Customers and other participants must receive information
about whom to contact and how.
Knowing what I now do about the foundation beneath the major
e-billing expansion we can expect to see over the next few
years--in addition to the technological security used in I-banking--I
can't wait for the day when all my bills are e-bills. How
*Regulation E is a federal banking regulation
that spells out how and during what time period a person can
inquire about an error or problem involving an electronic
transaction--such as using an ATM--and exactly how the bank
must handle research and resolution.
Do you have questions, comments or topic requests?
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