What Is Online Bill Pay and Why Should You Use It?

woman sitting in front of laptop paying bills

If you regularly find yourself opening stacks of bills or mailing checks, online bill pay could be a huge time saver. Rather than having to go through each bill one by one, you could manage your bills in one central place by setting up bill pay through your financial institution. This could also save you money on envelopes and postage, and may even help you avoid late payments that could lead to fees and hurt your credit.

How Does Online Bill Pay Work?

Banks and credit unions often offer online bill pay as a free service to customers. It can be an easy and convenient way to manage, track and pay bills directly from your account.

With bill pay, you can add new companies or people—called payees—to your account and then send one-time or recurring payments. The bank will electronically send your payments to any payees who can accept them. For payees who do not accept electronic payments, the bank will mail a check and cover the postage on your behalf.

Online bill pay services can be a convenient and free way to manage your bills from your bank account. You can log in to find out which bills are due soon, schedule payments or edit previously scheduled payments. There could also be options to sign up for alerts or notifications related to your bill payments.

How Do I Set Up Online Bill Pay?

If you haven't already, create an online account on your bank's website, where you'll set up online bill pay. Each bank's or credit union's system might work a little differently. If you have specific questions, you can look for help on the site or contact the institution directly. Many sites have online videos that will walk you through setting up bill pay and sending your first payment.

In general, to set up bill pay:

  1. Sign in to your online account. You can do this from a browser or mobile app.
  2. Go to the bill pay section and add a new payee. Some popular options, such as large utility companies or creditors, may already be in the system. Otherwise, you may be able to add a payee by uploading a picture of a bill or manually entering their information.
  3. Confirm or add additional information. You may need to confirm information related to the payee, such as your account number and their address, or add anything that's missing. You may also be able to give each payee account a nickname to make them easier to identify.
  4. Schedule your first payment. Once you add a payee to your account, you can schedule your payment. Choose the amount, payment date and add an optional memo for your records.

Once you're set up, you can schedule immediate or future one-time payments to your payees. You can also schedule recurring payments, which can be helpful if you have a loan or streaming service subscription with fixed monthly bills.

For bills that change month to month, such as credit card and utility bills, you may want to set up autopay to automatically have the payments pulled from your bank account. (This can be easier than "pushing" the payment from your bank to the creditor or service provider each month.)

Another option is to see if the company or service provider offers eBills—electronic bills that can be sent directly to your bank. If it does, you may be able to add the company as a payee, sign up for eBill and then set up automatic bill payments for the amount. Or, if you'd prefer, you can be notified when the eBill arrives and then manually make the payments.

When you're setting up bill payments, keep in mind that it commonly takes a couple days for companies to receive electronic payments—and longer if your bank has to mail a check.

It could be a good idea to choose a payment date that leaves a little time between the estimated bill arrival and due dates. Your bank might also have a guarantee and offer to pay late fees if your payment doesn't arrive on time, but it could be limited to guaranteeing your payment is sent on time—not received on time. If you're in a pinch, there may be a same-day bill pay option for a fee.

The Pros and Cons of Online Bill Pay

Bill pay can be an easy way to manage and pay bills, but there are still pros and cons to consider. You may find it makes sense to only sign up for a few of your bills, depending on what works for you.


  • Save time you'd otherwise spend preparing and sending payments.
  • Avoid paying for postage.
  • Easily track your bills through your online account.
  • Better avoid making accidental late payments.
  • Basic bill pay services are often free.
  • Bill pay may be more secure than making payments through the mail.


  • Signing up and adding each new payee may take some time.
  • Recurring automatic payments could overdraw your account if you don't have enough money to cover your bills.
  • Scheduled payments won't automatically stop if you cancel a service or if a bill isn't due.
  • Scheduled payment amounts won't automatically change if your bill amount changes.

Bill Pay Can Be Part of Monitoring Your Finances

If you have an account with a bank or credit union, consider if bill pay might be right for you. Many people have recurring fixed payments for loans, rent and subscriptions that bill pay can help manage. You can also add other payees that you frequently pay, even if they're not on a regular schedule or a fixed amount.

You can also look for other easy and free ways to manage your finances, such as monitoring your Experian credit report and FICO® Score for free online. And if you're paying bills from your bank account, Experian Boost®ø could help you get credit for your on-time phone, utility and streaming service payments.