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Differences Between Bill Pay and Online Checks

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Question: 
We recently implemented Internet Banking for our customers. We would now like to enhance that service with online bill pay. We've had customers asking if we will also offer the ability to write checks on line. Is there a difference between on-line bill pay and writing checks on line?
Answer: 

In my experience, the two phrases are interchangeable. In some cases, an on-line bill payment program will create ACH payments instead of true checks. But the function of the service is the same, whatever you call it.

Author's Note: After this article was published, a reader reminded me that customers' perceptions of these services are important and may include some significant differences.

A "bill pay" service might be thought of a service that takes care of recurring payments like insurance premiums, Internet access, cablevision, or a health club membership.

"Online check service" suggests the ability to use the service to issue individual payments for either regular or irregular bills. This service can prepare and mail the checks, and the customer need not bother with a checkbook, envelopes and postage.

There are a number of online services, available from banks or from third parties, that combine both repetitive and on-demand bill payment. I appreciate the lesson, and the opportunity to update this article.

First published on BankersOnline.com 11/15/04

First published on 11/15/2004

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