Empty Mailbox - online bill paying services - Brief Article

Kiplinger's Personal Finance Magazine, June, 2000 by Kristin Davis

BILL-PAYING | Some folks can't give up paper checks. These ONLINE SERVICES are for the rest of us.

EUREKA! At last, somebody's hit on the right formula for using the computer to really simplify bill-paying.

Yes, you can already bank online or use software like Quicken or Microsoft Money (or the U.S. Postal Service's brand-new eBillPay service) to zap payments from your bank account to a biller. But that may be after you've let a bill age in a stack of mail until you get around to a "bill-paying session" at your computer. The new breed of online bill-paying services is a lifesaver (or at least a late-fee saver) for the not-so-organized because you never get the chance to misplace a bill or overlook a due date.

Instead; for about $9 a month, PayMyBills.com, Paytrust or StatusFactory. com will receive your bills for you, scan them into its computers, and send you an e-mail to let you know a payment is due. To make payments, you log into the service's Web site, view your bills (in full, gory detail), and click "pay" to transfer the funds from a predesignated bank or money-market account on the date you specify.

"When you're a working couple with busy jobs, sitting down on a Friday night or Saturday morning to pay bills is not something you look forward to," says James Scoggins of Hanover, Md., who uses PayMyBills .com to make 25 to 30 payments a month. It's much easier, Scoggins says, to pay bills on the fly. "I get an e-mail that says `new bill received.' Two clicks and I'm on the bill, enter the amount, and it's gone."

The service is popular with "road warriors," military personnel, winter snowbirds and others who travel or change addresses frequently, says Tom Lazaroff, director of marketing at PayMyBills.com. It could also ease bill-paying chores for people who handle finances for elderly parents, whether they live nearby or far away.

Easy setup

KIPLINGER'S tried out the three services described in the box above. Setup was a breeze with all three: You just fax a voided check for each account you want to pay bills from. Designating payees was easiest with PayMyBills and Paytrust because most credit card issuers and utilities are already in the system; StatusFactory required a lot more typing. All three will handle the chore of contacting creditors to change your billing address so that statements arrive at the service rather than in your mailbox.

With all the bill-paying services, you can set up automatic payments without a bill--such as arranging to send $300 a month to a child at college-or direct that your credit card bill be paid five days before it's due. Transactions remain online for a year and can be exported to Quicken, Microsoft Money or Excel. For an extra charge you can access older records online or buy a CD-ROM archive.

What about privacy? Paytrust and StatusFactory say they won't sell your personal or financial information to any third party; PayMyBills says it won't do so without your consent.

We encountered no errors in our six-week trial run; all bills arrived and were paid on time. Just one inconvenience surfaced: remembering a new billing address when you order merchandise or verify your identity with a biller (to check a credit card account balance,, for instance). But that's a minor wrinkle to endure for less clutter and more free time. --Reporter: SEAN O'NEILL

GOING (VIRTUALLY) POSTAL

The U.S. Postal Service is a new competitor in the electronic bill-paying game, with its recently launched eBillPay service (at http://new.usps .com). The service has a lot of promise-and you can try it for free for six months-but for now we can't recommend it.

While you can pay anyone using eBillPay, you can receive online bills only from 89 participating billers. That means you still have to shuffle paper bills.

If the Postal Service, with its partners Check-Free and YourAccounts .com, manages to get a majority of U.S. billers to present their bills online, then eBillPay would outclass the services discussed in the accompanying story. That's because you could eliminate paper bills without the bother of a separate billing address.

HOW THEY RATE

PayMyBills.com ****

Cost: $8.95/month for up to 2.5 bills

Free trial: Three months

Year-end CD-ROM: $24.95

Phone support: Toll-free, 24 hours/ 7 days a week

Comments: Easy to set up and navigate. Plastic "billing address" card for your wallet is a nice touch.

Paytrust ****

Cost: $8.95/month for up to 25 bills

Free trial: Three months

Year-end CD-ROM: $14.95

Phone support: Toll-free, 24/7

Comments: Easy to set up and easiest to navigate. Offers "Smart Balance," which updates your bank-account balance with each payment, through 11 banks.

StatusFactory.com **

Cost: $8.95/month for up to 30 bills

Free trial: Three months for one bill only

Year-end CD-ROM: $49.50

Phone support: 24/7 (not toll-free)

Comments: Least user-friendly to navigate and most time-consuming to set up.