Electronic bill payment

Electronic bill payment is a feature of online banking, similar in its effect to a giro, allowing a depositor to send money from his demand account to a creditor or vendor such as a public utility or a department store to be credited against a specific account. The payment is optimally executed electronically in real time, though some financial institutions or payment services will wait until the next business day to send out the payment. The bank can usually also generate and mail a paper cheque or banker's draft to a creditor who is not set up to receive electronic payments.

Electronic billing can also feature invoices sent by e-mail or viewed on a secure web site (with notices of new invoices being sent by e-mail).

Most large banks also offer various convenience features with their electronic bill payment systems, such as the ability to schedule payments in advance to be made on a specified date, the ability to manage payments from any computer with a web browser, and various options for searching one'srecent payment history: when did I last pay Company X? To whom did I make my most recent payment? In many cases one can also integrate the electronic payment data with accounting or personal finance software.

Peer-to-peer payment systems are extremely popular. The best and most widely known example is PayPal. PayPal allows you to pay for just about anything online as long as the seller also has a PayPal account. Many online sellers use PayPal such as 75% of eBay sellers, overstock.com, ritzcamera.com, and Walgreens.com (Traver, 2004).Fact|date=May 2008 PayPal is also sometimes used to pay for personal debts in situations where both parties have an account.

Electronic bill payment and presentment (EBPP) includes an electronic bill payment system (EBPS). Electronic bill payment and presentment is “the electronic bill presentment to the consumer and the electronic initiation of payment by the consumer” (Alexandria Andreeff). This was done completely by postal mail before the internet. Sending bills electronically via the internet is much faster and cheaper though. Although this technology was available before December in 1998, only 26.2% of U.S. households had internet access at that time according to the U.S. Department of Commerce in 2000 (Alexandria Andreeff). By August of 2000, electronic bill payment and presentment systems started to dramatically increase in popularity because 41.5% of U.S. households had internet access by then according to the U.S. Department of Commerce in 2000 (Alexandria Andreeff). In this model, the one who is charging the consumer, notifies the customer (usually) through e-mail (Alexandria Andreeff). The customer is then responsible to log on to the biller’s website to pay the bill (Alexandria Andreeff). Facts|date=May 2008

Limitations (United States)

Typically, US financial institutions formally prohibit the use of their consumer electronic bill payment systems for payments to any tax authorities, collection agencies, or recipients of court-ordered payments like child support or alimony. Any organizations or individuals outside of the United States are also usually excluded. Payments to government agencies for utilities such as water are usually permitted. [http://www.google.com/search?q=%22child+support%22+%22online+bill+payment%22]

References