4/14/2023
Mention of the Bill Pay service has become commonplace when you go to sign up for a checking account or other similar products. Given its usefulness and the convenience it can bring to managing your finances, we want you to be clear on the basics of how it works.
What is Bill Pay?
Online bill pay represents a service that allows you to set up manual/automatic electronic payments to pay your bills online.
You can set it up directly with your service providers or your bank, as well as pay your water, cable, gas, electricity, telephone, etc. bills from anywhere.
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How does Bill Pay work?
In principle, you have to set up these online payments by creating an account with the bank or supplier to channel the money. Depending on this, we will look at each case:
Service providers
With public or private utilities, it works the other way around from the way it does with banks. This means that you must give them the financial information they ask for so that you can pay them in a convenient way.
In this way, the suppliers are simply allowed to withdraw the funds from your account when the day of payment of each invoice arrives. This is known as direct debit.
Financial Institutions
In this case, you will give the bank the corresponding information of the companies that charge you and the bank is in charge of sending them the money. This process can be executed by means of a normal check or an electronic transaction with money from the account you have assigned for this purpose.
This happens a few days after you make the bill pay and most banks do not impose limitations on the amount of services you can cancel with this option.
Automated Bill Pay
For those who lead a busy life and can't keep on top of bills to be paid, you have the option of automated bill pay. This alternative is very useful for recurring charges that you can designate through your bank or vendor.
It is a way to authorize those involved in the operation to have access to your funds to meet your commitments.
When you automate the cancellation of receipts, you save time, avoid late penalties and keep your finances up to date.
Since you will not be involved in these transactions, you need to make sure you have sufficient funds and avoid any negative balance fees in case of overdraft.
How to pay an invoice with bill pay?
When you want to set up this service with a public or private company, the first thing you have to provide is your account number and any other routing number linked to your current account, such as SWIFT.
Once this is done, the company in question has legal permission to take the money you owe out of your bank account. Depending on the flexibility of the creditor, some will allow you to provide your debit card information instead of your checking account.
Next, you will be asked to specify the amount and date of payment before you finish setting up the process. A common date would be the due date of the invoice, but you have to define that it is a one-time disbursement. With everything ready, the payment goes directly from the bank to the supplier.
How to make the bill pay from the bank?
To ensure that the online payment is made through the bank, you must go to the bank's website and locate the section that says Bill Pay. There you will need to locate the correct link to add a new payee and then enter the name of the receiving company.
Among the requirements to do this, you will need a copy of the receipt issued by the service provider. Having this information at hand, you can write down the account number, the address and any other information that the bank asks you for in order to make the affiliation.
Finally, you have to indicate the amount you want to pay, designate the corresponding date and complete the configuration steps. After that, you only have to enter the amount that appears on the bill and define the payment date.
Types of bill pay you can choose
After setting up the configuration with your bank or supplier, you may be given the option to use the type of bill pay you find most convenient, such as:
- One-time payment. This is a one-time payment and is usually recommended for services that you don't pay for frequently.
- Recurring payment. It is the most common because you assign it to biweekly or monthly receipts.
- Future payment. You also have the possibility of scheduling payments on future dates. The suggestion is that you use it for a not so near future and as a reminder.
Español: ¿Qué es Bill Pay y cómo utilizarlo para pagar facturas?