credit & debt

Online Bill Paying Isn't Foolproof

Using your bank's bill-payment service is convenient, but the process isn't a slam dunk.

Using your bank’s bill-payment service is convenient: Enter a payee into the system, and the bank transfers funds from your checking account electronically or mails a check. No stamps to buy, no envelopes to address and mail. But the process isn’t a slam dunk.

First, be certain you understand the bank’s definition of the payment date so that your payment arrives on time. “Is it the date the bank is going to begin processing your transaction? Or is it the date your payment will be delivered?” says Justin Jackson, vice-president of integrated payment solutions at financial-technology company Fiserv. Some banks ask you to select the date that the payment must reach the biller, and the system calculates when it needs to initiate the transaction. If the bank prompts you to choose a date to start processing the payment, it may indicate when the biller will receive it. If not, choose a date a week in advance of the due date so that the bank has ample time to send the payment.

Banks also have differing schedules for when they remove money from your account. Wells Fargo, for example, withdraws funds the business day after the date you choose to in­itiate the payment, even if it is mailing a paper check. When Bank of America sends a check, however, the money doesn’t leave your account until the recipient deposits the check. Monitor your balance closely to be sure you have enough in the account when the bank withdraws the money.

Finally, check that you are submitting the correct information. That may seem like a no-brainer, but user errors are common. Customers may, for example, enter their cell number rather than the account number when setting up payments for a smartphone bill. Pull up a recent statement to reference as you enter the details.

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