Online bill pay has become increasingly popular in recent years allowing people to pay their bills quickly and easily online. While there are certainly many advantages to using online bill pay services, there are also some potential drawbacks to be aware of. In this article we will discuss 10 key disadvantages of paying bills online that you should know.
1.Possibility of Late Payments
One of the biggest risks of paying bills online is the possibility of payments arriving late. Even if you schedule a payment days before it is due, glitches in the system can sometimes cause delays in the money reaching the recipient. This could result in late fees or other penalties. To avoid this, it’s best to schedule online payments at least a week in advance of due dates.
2.Overdraft Fees
With online bill pay, money is automatically deducted from your account on the scheduled payment date. If you aren’t carefully tracking your balances, it’s possible to overdraw your account and incur hefty overdraft fees from your bank if there aren’t sufficient funds on the payment date. This lack of active control over payment timing is a disadvantage compared to manually sending payments yourself.
3.Identity Theft
Any time you provide sensitive financial information online, there is always a risk of identity theft. Bill pay services require you to enter and store details like account numbers and bank routing numbers. While reputable services use encryption and other security measures, the risk isn’t completely eliminated.
4.Lack of Payment Tracking
When you mail a physical check, you can track its status through the postal system. With electronic payments, it can be harder to confirm when exactly a payment was sent and received. You need to login and check your payment history and account balances to verify payments went through as scheduled.
5.Difficulty Resolving Errors
If an online payment goes awry due to an error by you or the bill payment service it can be a big hassle getting the issue resolved. You may have to make multiple calls and emails back and forth between the biller your bank, and the bill pay provider. This can eat up a lot of time and effort on your part.
6.Automatic Payments
Some bill pay services let you setup recurring automatic payments, which can be convenient but also dangerous. If the amount owed increases over time, you may end up overpaying without realizing it if you aren’t diligently monitoring recurring payments.
7.Dependency on Internet Access
To use online bill pay, you need to have an internet connection. If you experience an outage or don’t have consistent access, it could impair your ability to pay bills on time. This dependency on internet connectivity is a disadvantage compared to old-fashioned paper checks.
8.Lack of Payment Receipts
With paper bills and checks, you have hard copies for your records. But with electronic payments, receipts aren’t always readily available. To have proof of payment, you need to specifically print or save emailed receipts yourself for your files.
9.Fees
Some banks charge monthly fees for online bill pay access or levy fees per transaction. The fees can really add up over time. However, there are banks that offer free bill pay if you meet balance requirements.
10.Learning Curve
If you aren’t already comfortable with online banking and payments, there can be a learning curve in figuring out how to use your bill pay service properly. Poorly inputting info is easy for online bill payment newbies, so there’s a disadvantage if you don’t take time to fully understand the system.
How to set up online bill pay
Here are some general steps to set up online bill pay through a financial institution:
- Enroll in online banking. You will create a username and password.
- After signing in, navigate to the bill-pay page.
- Create each bill payment. You will first set up each biller, then enter the information from the bill — such as the payee’s name and address.
- Determine payment frequency. This is where you will determine whether a bill is a one-time payment or recurring payment.
- Link payments to the bank account from which the funds will be removed to pay your bills.
- Set up text notifications. You may be able to receive text notifications when a new online bill arrives or when the account is at risk of an overdraft.
Most online bill payments are complete, typically within two to three business days.
Online bill pay can also be set up using a money management app. Some apps that offer online bill pay are Prism, Quicken and QuickBooks.
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- Offered by many financial institutions, online bill pay is typically a free, secure service that enables consumers to make various types of payments electronically.
- Payments made via online bill pay can be made through a website or an app.
- Keep track of your account balance as you might inadvertently withdraw more funds than what’s available, resulting in overdraft fees.
If you’re tired of writing and sending out checks for monthly expenses, enrolling in online bill pay might be a good solution.
Online bill pay is a service offered by many financial institutions that allows customers to pay their bills electronically. It’s secure, free and can be done from the comfort of your home.
There are numerous advantages to online bill pay — especially for those accustomed to online banking — but there are some areas where it may fall short.
What is Online Bill Pay Fraud?
FAQ
What is a disadvantage of online bill pay?
Is it better to pay bills online or by check?
What are the disadvantages of online payments?
5. Technological illiteracy One of the main disadvantages of online payments is the technological illiteracy among many people, especially the older generation. Since they don’t have enough knowledge on how to go about using technology or smartphones, they refrain from using online payment methods.
Why should you avoid paying your bills online?
Finally, the person processing your payment could be up to no good or even enter in the wrong information, causing you headaches down the road. By avoiding paper bills in favor of online payments, you have the peace of mind knowing that your identity is at a lower risk of being compromised. #4. Avoid Late Payments
What are the advantages of online payments?
This is one of the most unique advantages of online payments. With online payment systems, you can automate your rent, utility bill payments, credit card bills, and mobile recharges. Once you set up an auto debit, there’s no need to remember all due dates or stand in lines at government offices to pay your bills.
Is online bill payment a good idea?
Online bill payment is an awesome benefit of technology. Not only does making monthly payments online save you money, but it also saves you time. But as great as automatic bill pay is, it is not perfect. Before you decide to pay all your bills online, you need to get a complete picture of this service.
Why do people not use online payment methods?
Since they don’t have enough knowledge on how to go about using technology or smartphones, they refrain from using online payment methods. A lot of them also fear the complexities of it and continue to use traditional methods of payment.
Are online payments a problem?
Online payments are subject to technical failures or downtime, just like any other software that is dependent on technology. Though tech maintenance operations are announced in advance and usually take place during the night, sometimes, it can cause frustration among online shoppers.