Section V: Beware of Online Bill Payment

TITLE: Easier is Not Always Better

With the progression of the information age, including the rapid extension of American life on the net, people everywhere have become more accustomed to depending on the internet for many of their daily tasks. The tedious process of racing to pay bills at the end of the month is another chore that has been improved with the ease of online services. In fact, it is predicted that “in 2003, online bill payment will be the fastest-growing online financial application, and banks will compete fiercely with billers to lure consumers over to their sites to view and pay bills," said Avivah Litan, vice president and research director for Gartner. But here’s the bad news: Missed payments and other computer-related problems continue to hinder progress.

Sometimes payments go to erroneous accounts or may even get lost on the Web. Consumers end up getting charged for late payment on a bill they thought they had paid. Jupiter Research reports that there is also a lack of consistency among billing sites, which causes inconvenience for most consumers. It becomes more trouble for consumers to keep up with variations in site layout when paying bills. Instead, consumers desire to return to their previous rituals of mailing bills manually.

Another problem exists because of the increased availability of personal records online, especially credit card numbers, pin numbers, and social security numbers. Most online payment sites guarantee privacy and security. Some consumers have admitted to having credit card numbers inadvertently appear online. Not only does this violate the signed privacy contract of the bill payment companies to their users, but the mistake may be an open invitation for hackers.

Some online billers may not experience such troubles with their online bill payments. Even so, internet banking is still troublesome for bankers and vendors. “Electronic transactions are eventually transformed into paper checks cut by the bank or its vendor and couriered to the payee.” More than half of home banking payments are sent to billers in the form of paper checks, which have to be processed by hand. By doing so, more data entry errors are created. When vital information gets mistyped, payments can be delayed or charged to the wrong consumer. Many checks arrive at the banks with insufficient information. This also seems to be very time consuming, inaccurate and expensive (5). So while online bill payment gets the paperwork of the consumer’s desks, it adds more to the bankers/vendors.

“Late payments are the number one source of customer complaints with home banking,” said Richard Crone, vice president for financial services at the Boston Market research firm Dove Consulting (5). Because consumers do not know that electronic payment of bills actually takes up to several days, they assume paying on the due date is acceptable (5).

It is predicted that online payment of bills will continue to grow in the future. With this in mind, it should be the focus of bankers and vendors to concentrate on how to cut back on these problems. Much to our relief, we can blame many of the current problems on the fact that online banking was pretty recently introduced to the World Wide Web. So while consumers should work on getting bills in on time, the bankers and other various workers behind the electronic screen can master the art of online banking.
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SOURCES:
(1) Stamford, Gartner. Gartner Says Banks Must Focus on Online Financial Applications to Remain Competitive in 2003 and Beyond; Symposium/ITxpo 2003 [article online]. (San Francisco, CA: Business Wire, Feb. 20, 2003, accessed 26 May 2003; available from http://eresources.lib.unc.edu/cgi-bin/external_database_auth?A=P|F=Y|ID=12|URL=http://web.lexis-nexis.com/universe; Internet.

(2) U.S. Federal Trade Commission and U.S. Federal Reserve. Paying Bills Online: How to Avoid the Pitfalls [article online]. (Texas: Texas Hospital Association, Winter 2002, accessed 25 May 2003); available from http://retirement.thanews.com/archive/winter02.pdf; Internet.

(3) Merrick, Bill. How Will Consumers Pay Bills? [online magazine article]. (Credit Union National Association, Inc., Jan. 2001, accessed 26 May 2003); available from http://search.epnet.com/direct.asp?an=4070295&db=bsh; Internet.

(4) Grimes, Brad. Will the Web Ever Really Work? [online magazine article]. (San Francisco, CA: PC World Communications, Inc., Dec. 2002, accessed 25 May 2003); available from http://www.pcworld.com/howto/article/0,aid,105836,00.asp; Internet.

(5) Wade, Will. Electronic Billing Problem: The E-Check is in the Mail [online article]. (New York: The Thompson Corporation and American Banker, 19 May 2003, accessed 26 May 2003); available from http://eresources.lib.unc.edu/cgi-bin/external_database_auth?A=P|F=Y|ID=12|URL=http://web.lexis-nexis.com/universe; Internet.

LIST OF WEB SITES:

Title of Web Page: Online Invoicing Ready For Business-To-Business Users
Web address: http://www.informationweek.com/story/IWK20011108S0019
Brief description: Site discusses advantages and disadvantages to electronic billing services, discusses software that can aid in the process, etc. It also describes different online billing and invoicing options. The Web site lists different services for E-billing.
Source of Web site: Information Week

Title of Web Page: MSN Money
Web address: https://billpay.msn.com/entry/welcome.asp
Brief description: The site is a good example of how easy it is for consumers to set up an online bill payment home page. The main program is called MSN Bill Pay, with other more specific programs stemming out from it. There is also a disclaimer at the bottom of the page that guarantees privacy for customers.
Source of Web site: Microsoft Corporation

Title of Web Page: Geek.com: Geek News
Web address: www.geek.com
Brief description: Web site that has numerous articles relating to online payment of bills, online banking, hackers interfering with online banking, etc. Interesting site because it is written by people who have a more complete understanding of the internet.
Source of Web site: Geek.com LLC