How Do Automated Payment Services Work?


Quick Answer

Automated payment services allow electronic payments from a bank account or credit card to a vendor. Payments can be for a single-entry or recurring payments.

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Full Answer

One-time customer-to-vendor payments typically occur with e-commerce. A shopper inputs payment information, such as an e-check or credit or debit card number, at checkout, and the site processes the information. The vendor authorizes payment, and an electronic funds transfer occurs.

Individuals can create recurring customer-to-vendor payments for regularly scheduled bills. A customer schedules automatic transfers from an account to a company on a specified billing cycle.

Finally, banks can offer online bill pay. The customer inputs the vendor's information and authorizes the bank to transfer funds to the company.

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