How Does Online Bill Pay Work?

See how this technology can simplify your life

Man paying bills online
Photo: JGI/Jamie Grill/Getty Images

Online bill pay services offer a convenient, safe and inexpensive way to ensure that all of your bills are paid on time. If you have bills from several different sources—and most people do—online bill pay is worth setting up because it will save you time down the road.

What Is Online Bill Pay?

Online bill pay is a service that lets you pay your bills securely from a website or app. Many financial institutions offer this service, so check with your bank or credit union. There are also software companies and apps that specialize in helping you manage your money and pay your bills online, and you can even pay bills online through desktop personal finance software like Quicken.

You can set a source of funds for the payments—usually a checking account, but some bill pay services also work with credit cards, savings accounts, money market accounts, or even a home equity line of credit .

All bills and transactions are accessed and processed through the bill pay service website.


This service is sometimes called electronic bill pay and presentment, or EBPP.

What Does Bill Pay Cost?

Many banks offer this service free to their customers. Ask your financial institution whether they offer online banking with bill pay: chances are, they probably do. (And if they don't, you could consider switching to a bank that better meets your needs.)

There are also free, standalone bill pay companies, which aren't affiliated with a particular bank. As these free services often don't come with many special features, they may be best if you only pay two or three bills each month.

If you want more features, such as the ability to view several months' worth of bills online, you might prefer to use a more robust online bill pay provider that offers more services. But these businesses typically charge a monthly fee, usually around $10. This cost may be worth it for some people because they find the service saves them money by eliminating the expenses associated with postage and purchasing checks, not to mention the time savings, too. These customers should weigh the benefits of a paid bill pay service against their financial institution's free offerings, if any.

Electronic Funds Transfer or Paper Checks?

Bill payments can be sent from your account in two ways: electronic funds transfer or old-fashioned paper check.

With electronic payments, you can create a seamless transaction that transfers the amount owed from your bank account to your biller. You choose the payment date, and you can usually schedule your payments ahead of time if you like.


You can even choose to set your payments to be automatically debited from your account, which can be helpful if you find yourself often missing your payment due date.

Online bill pay services can also usually cut and mail a physical, paper check in situations where electronic payments are not accepted. Be sure to allow extra time and plan ahead—usually five business days—for the check to be cut and mailed if you need to go this route.

Will My Transaction Be Protected?

You may wonder whether paying bills online is as secure as sending payments through the mail. The answer is yes, online bill pay is perfectly safe—possibly even safer, since you don't run the risk of your payment getting lost in the mail.

Online financial transactions are heavily encrypted to prevent theft and fraud. Your data and information are protected by password and possibly multi-step identity verification. Your bill pay service might even guarantee that your payment will be completed on time as scheduled, so check with your service to see what additional protections you may be entitled to.

You can also follow some simple tips for paying bills online to make using these services even safer:

  • Don't click on payment links from an email: it could be a phishing attempt
  • Always log onto the online bill pay service directly through a web browser, using your unique login and password
  • Sign up for two-factor authentication if it's offered

No service is flawless, so take care to protect your financial information as well as possible. It's also a good idea to find out ahead of time what steps you can take if something were to go wrong.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Quicken. "Quicken Bill Pay."

  2. Bank of America. "View Questions About Bill Pay and eBills."

  3. Consumer Financial Protection Bureau. "Ways to Pay Your Bills."

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