For electronic bill payment, a customer at a financial institution goes to that institution's website, and then enters the payee's information and the payment information. The financial institution takes that payment from the customer's bank account or credit card and sends it to the payee electronically as a direct deposit.Continue Reading
The payee of an electronic payment can be a person or a company. A financial institution can only send an electronic payment to payees who are set up to accept that form of payment. Large companies typically are, but people and smaller companies may not have electronic payments set up. In these situations, the financial institution sends a paper check to the payee. Since mail can take multiple days to arrive, financial institutions typically ask the customer to enter the intended payment date, and then mail the payment before that date.
The process for setting up electronic bill payments varies depending on the financial institution, but typically involves logging in to an account on the institution's website and going to the Bill Pay page. Required payee information is usually the payee name, address and the customer's account number with that payee.
Another electronic bill payment option is automatic payments. For automatic payments, the customer sets up a payment day and amount, and the financial institution sends that amount to the payee automatically on the chosen day.Learn more about Personal Banking