Updated: May 3, 2013 12:14PM
Originally published: August 7, 2001
Have you noticed that your bills are getting fatter? It’s not because you’re spending more; it’s because the credit card and department store companies, and even the utilities, are stuffing all sorts of advertisements and reminders into the same envelope that carries your bill. It just means more trash to carry out. There has to be a better way.
I’ve written about electronic bill paying several times over the last few years. It solves the problem of writing checks, licking envelopes, finding stamps and making a trip to the mailbox. All you need is personal banking software such as Microsoft Money or Quicken, or a direct link to your bank’s own Web site, to send instructions directly to your bank, where a service actually will print out and mail the checks or deposit the payment electronically into the account of the biller.
But that still leaves you with one chore: opening all those bills that come in the mail. Each year, consumers receive more than 21 billion bills, mailed by an estimated 3 million billers. Within a few years, most major billers, such as telephone companies, utilities and credit card companies, will be set up to present bills to you online through your bank. Those systems are being actively worked out right now. But there always will be some bills in your mailbox - from smaller companies and businesses that might never gear up for online bill presentment.
Now some high-tech start-up companies are attacking the problem of bill-stuffed mailboxes - and getting the jump on electronic bill presentment, as it’s called. PayMyBills.com is one of the first out of the gate to offer an online bill presentment for all of your bills, whether they come from big companies or small.
You simply subscribe to the service and then send a change of address card to all of the companies that send you bills. Your bills will be sent directly to the PayMyBills.com processing center, where they will be opened, scanned and posted to your private account, which is accessible only through your secure password.
Whenever a bill arrives, you’ll be notified by e-mail. Then you log on to your private account, read the bill and give instructions to either pay in full or in part, pay immediately or in a few days.
The service will send e-mail reminders if you’re nearing a due date on an unpaid bill.
You can set up some bills to be paid automatically when they arrive each month, such as the mortgage or utility bills. Or you can review all bills before issuing payment instructions.
You keep your own bank account and continue to receive your monthly statements. PayMyBills.com simply sets up a secure link authorizing payments to be made out of your account to cover the bills you’ve authorized. Your money stays securely in your bank account waiting for instructions. And you still can write paper checks out of your account, if needed.
The service uses Chase Manhattan Bank to route its bill payment instructions to your bank. And in case of an error, there is a $100,000 insurance protection per loss from Travelers Property Casualty Co.
You can download your bill paying information from PayMyBills.com right into your Microsoft Money or Quicken financial planning software. Because the actual bill is scanned into your private online account, using the latest technology offered by Imaging Acceptance Corp., you’ll always be able to review your charges.
There’s even an electronic archive to give you access to bills you paid in the past, eliminating a lot of storage space needed in your desk at home.
You always can keep track of your payments by checking your account history, which sorts payments by date or by payee. The cost for all this service is $9.95 a month for up to 15 payment transactions and 50 cents per transaction above that amount. (And, remember, there are no stamps to buy!)
About now, you’re thinking that subscribing to PayMyBills.com requires a lot of trust: trust that they’ll actually receive bills that you’ve directed companies to send to them; trust that they’ll scan the bills into your account; trust that they’ll remind you to pay your bills on time, and trust that they’ll actually issue the instructions to your bank.
It’s the kind of trust that executives place in their private secretaries who do their bill paying for them! And you can always check your bank statements if you have any doubt about your payment history.
One big element of trust that PayMyBills.com has going for it is its financial backers. The company sprang out of idealab! - a Pasadena, Calif., incubator of small technology companies that has created such winners as e-Toys, GoTo.com, CarsDirect and Cooking.com.
All have gone on to Internet fame and fortune.
Of course, PayMyBills.com is bound to have real competition from the major financial Web sites such as Microsoft and Quicken. Each is working on online bill presentment, as are the major banks around the country. At this juncture, they are working on an ``open access’’
format that will allow billers to present their bills through multiple forums - instead of just one bank, for example.
But Jeffrey Grass, vice president of customer contact for PayMyBills.com, says he isn’t worried. ``The big financial services companies may come out with their own versions of bill presentment - but only the big billers will post their bills with them,’’ he predicts. ``Our service works today, and it works for all your bills.
The only thing you have to do is subscribe, and apply our change of address sticker the next time you pay a bill. It will be the last check you write; after that, we’ll do the bill opening and bill paying for you.’’
Now that’s really a tempting way to handle the flood of bills that hits your mailbox every month. You’d never even see them, except online. No envelopes to open, no trash to haul out. Aside from clicking on a screen to authorize payments, you’d have only one real responsibility: keeping enough cash in your checking account so the checks don’t bounce!
Terry Savage is a registered investment adviser for stocks and commodities and is on the board of directors of McDonald’s Corp. and Pennzoil Co. You can send her questions via e-mail at email@example.com. Her second book, published by HarperCollins, is Terry Savage’s New Money Strategies for the ‘90s. Copyright Terry Savage Productions.