Using online bill-pay helps prevent ID theft

by Center for Personal Finance editors

ATLANTA (5/31/06)--More consumers are replacing paper checks with online bill payment, and experts agree that the trend is a positive one in light of concerns over identity theft (PRNewswire May 17).

More than two-thirds (69%) of U.S. online households report paying at least one bill online, up from 56% one year earlier. According to CheckFree Corporation, which recently announced the results of a survey on billing and payment trends, online payments are slowly but steadily replacing check writing as the preferred way to pay bills.

Why the recent upsurge? The key benefits are convenience, ease of use, control, and speed of payment. Specifically, respondents said that online bill payment saves paper, stamps, and hassle (28%); is the easiest way to pay bills (16%); ensures that bills will be paid on the day of their choice (12%); and is faster than paying with checks (11%).

Why aren't others adopting the new technology? According to a survey of non-users, lack of information about online bill-pay was the most common barrier, followed by security concerns.

Paying bills online, however, is more secure than getting statements and sending checks through the mail; another recent study revealed that 90% of unauthorized access to sensitive information is through traditional nonelectronic channels, such as a lost or stolen wallet or theft from a nonsecure mailbox. In addition, consumers who access accounts online can monitor their account activity anytime--not just when the statement arrives--to detect fraud more quickly and take steps to minimize the damage.

Experts point out that when logging in to your accounts, you're in a secure area, and all actions you take are encrypted--even if you just check which items have cleared.