At least one of my utilities gives a longer time for clearance of funds from a checking account; something along the lines of 2 days from checking vs. next/same day from credit. I assumed it targeted people who can’t afford that extra day such as those that have a utility turned off and are trying to get it back on or those that are about to have a utility turned off and are trying to keep it on.
That, and people who don’t understand what they’re reading.
I have to say, though, that if my choice was between paying electronically with a fee or mailing in a check, I’d totally pay the fee.
Mailing a cheque costs money (both for the cheque and the envelope and stamp), and mail can get lost.
If you do online or phone banking or even ATM banking, you can make an electronic payment for free (or whatever your bank charges you). For instance, I can input my telephone provider as a payee in my online banking, enter the amount of the upcoming bill, and program a payment a week before the due date. That cost me, in addition to the bill itself, $0.00.
As far as I can tell, a “pushed” payment costs the receiver nothing at all. If anyone has to pay anything, it’s the bank (which may pass the cost onto the bank account owner). No vendor should charge you for this. However, not every bill can be paid this way.
If you want the vendor or utility company to accept a payment by credit card, you may have to accept a fee. The vendor has to absorb the cost of the transaction, so they try to pass it onto you.
I saw a forum post where someone got flamed for suggesting a $15 “pay my mortgage fee” was unreasonable. Shouldn’t a pre-authorized debit cost nothing more than printing a PAD agreement, filling it out, and mailing it? That’s a one-time cost.
Paying a person to handle an electricity bill payment in person doesn’t make sense to me. An electricity vendor could literally have millions of customers. I used to work at a job where I literally could have been replaced by a metal sign stuck to a wall. “Here are your instructions for payment…” It was a summer minimum wage job, and I’m pretty sure it would have taken only a week or two of my pay to buy that sign.
It’s not the same thing as a retail store, where someone could steal from the store, or have problems operating those new-fangled automatic scanners. (What does the customer do if the scanner fails to pick up an item, or scans it twice?)
Yes, in the general category of trouble coming up with the money. Like I said, I can see paying with CC with a convenience fee if it’s that or a credit report ding for late payment or even lights out. Complaining about the fee in that case though, more doubtful IMO. Per the FDIC 93% of US households in 2015 had a bank account, so IMO if the discussion is about the relatively small minority who don’t, that should have been noted in OP. And if your bank doesn’t provide free electronic bill pay you’re at the wrong bank, nor has anyone said they’ve heard of a utility charging a fee to receive that way. And not having the money to pay your utility bills when they come is kind of a different and larger issue of personal finance IMO.
And some people are not price sensitive to a couple of bucks, which is fine if it works for them. It’s not material to me either, it just bugs me to pay convenience fees so I virtually never pay for anything with any method that charges them. I pay utility bills usually the same day they come in the mail, by free bill pay from checking account.
My father would delay paying the credit card bill until the final day it was due and then drive to a branch of the issuing bank to make the payment in person, just to maximize the interest earned on the payment (in fractions of a penny) and avoid the expense of a stamp. But I’d rather pay the credit card bill as soon as the statement period ends. I would even pay the credit card bill earlier than that, but if you do so, you don’t earn frequent flyer points.
Many municipalities/gov’t agencies are prohibited by law/statue from paying extra for collection services; therefore, they must charge you, the consumer, any CC fee that a ‘regular’ merchant eats. If you pay by a less expensive method (check or ACH), you won’t pay these extra fees.
There are 5 payment methods:
[ul]
[li]Wires - immediate, expensive, typically high-dollar payments; typically corp-to-corp. Most consumer wires are for things like settlement on a new house. Out of scope for this discussion.[/li][li]Cash - only in person (unless you’re dumb enough to mail it & trust it gets there & credited to your account); therefore, only possible at walk-up window. Some places won’t handle cash because of extra security & processing (armored car) costs.[/li][li]Check[/li][li]Card[/li][li]ACH - least expensive method[/li][/ul]
If you log onto your bank’s bill payment system, they’ll decide how to process it, either ACH or check. ACH is much less expensive & any merchant they deal with regularly they will be sure to sign up to pay via ACH. Someone small (ie. sole-proprietor HVAC or other home repair contractor) they may not get enough payments to make it worthwhile, especially since many people hand a check or cash to these merchants.
To address the above two comments, within ACH there are numerous different formats & two directions*. WEB & TEL are riskier transaction types than others (that doesn’t mean that they are high-risk, just riskier than other types & require additional measures on the merchants part. {ie. recording, saving, & making accessible the part of the call where you verbally authorize them to take $ from your account, which is slightly different than recoding screens/keystrokes when you logged in over the web, so they can prove you authorized it when you forget about it & say you never authorized them to take funds from your account.}) Depending upon the bank, they may not allow their customers access to TEL txns, or may charge more for it.
Debit vs. Credit has to do with who initiates a transaction; if you call/log on to your merchants website & say pay your bill, you’re initiating a Credit to them. However, if you’ve filled out the paperwork for them to debit you every month, they are initiating a Debit to your account, even though in both cases, money is flowing from you to them.
Yes, ACH gets very technical & there’s a rule book that’s about 1" thick. Yes, I have professional certifications in this area recognizing me as one of a (relative) handful of experts in ACH & other payment methods.
Honestly, they hire people to take those calls “because your call is important to them” (ie they don’t give two shits about you).
Literally the only thing that keeps companies in line are laws that require them to or… in other words…
.
.
. Regulations.
I actually AGREE with having regulations as I think they keep companies on the right track during times when profit motive will scatter them all over the place.
Companies need regulation much like how herds of sheep need sheep dogs.
Until about 1950, most ordinary people in the US did not have checking accounts since they generally required a minimum balance of $1000. My father paid all his bills at a “convenience outlet”. The alternative was to go to a bank and, for a fee, get a bank money order and mail it. My father did that too sometimes. Then banks started offering “special” checking accounts with no minimum balance and 10c a check fee. So my father did that. But I imagine really poor people even today do not have checking accounts. And maybe some of them are not responsible enough to use them correctly.
Up here, as Canadjun said, we pay all our bills online with no fees.
The % of unbanked households in Canada was 6% recently v 7% in the US. If you have a bank account in the US you can pay utility bills without fees. IOW the basis of the whole thread is questionable. If you don’t care about ‘convenience fees’ fine. But if you do you can avoid them except among a small minority (some subset of the 6/7%) who don’t have a bank account and it really doesn’t work for them to get one (some presumably don’t have one because they’re fine w/o one). I think it might be a case where internet anecdote gives you an impression of US v. Canada difference that’s doubtful in this case.
Here’s one that pissed me off a few years ago. Being in foodservice, I’m required to have a food handler’s permit. I have to take a test every few years, then pay $10 for a new card. 25-30 years ago I had to physically go down to the local health district office and take the test with pencil and paper. Eventually they changed it to taking the test on a computer at their office, and then in the last few years they finally made it possible to take the test online from home, pay the $10, and print the new card. Great!
Except a few years ago I misplaced my card and needed to get a new one. So I logged into the web site, entered my information, and clicked the link to request a new card. I was extremely indignant when the site informed me that I needed to pay the full $10 fee again for a new card.
Not to retake the test. Not to renew my permit. $10 for a fully-automated web site, requiring no human interaction, to look up my currently-valid permit and display a copy of it. A copy that I could then print out, using my own printer, paper, and ink.
I didn’t have much choice, as I needed the damn thing to be able to work (employer is required to have a valid card on file for every employee). However, since then, when I renew my permit I always save the printable page as a PDF on my desktop, just in case I need to print it again (or, in the case of my latest job change, e-mail it to the boss because my printer was non-functional).
“Why do we tolerate”… implies some sort of agreement where no one agreed to anything. It is ridiculous you can be charged for receiving a paper bill, or invent an artificial fee. It speaks to the incredible weakness of consumer advocacy groups and government watchdogs. It reminds me of the phrase “Society as a whole agreed to…” debates around technology agreements and personal privacy.
A few years back when my Mom was still alive, there was a two dollar fee for paying on-line, so I wrote the check. But that was ten years ago.
90 percent of my bills are done automatically on-line and there are no fees whatsoever. The other 10 percent are my one check a month for rent and another check for union dues. [The latter is BS as the local union will accept payroll deduction but the owners want to be dicks and not allow it). So I have to buy boxes of checks for rent and monthly union dues.
I pay my bills electronically also, and in those cases where the payee isn’t set up for an electronic funds transfer (such as the apartment building management), they will mail a paper check. I was having the bank send that to the building manager a week or more in advance of month-end but the building manager claimed not to have received it a couple of times, so I have the check made out to the building management but sent to my address. I just hang onto it until the first of the month and drop it off then.
I often pay utility bills on the company websites.
Is it just my imagination, or do these payments take longer to process than they used to? If so, it may be the reason behind an infuriating new thing I’ve noticed, namely the bank falsely adding the amount of the payment back into my balance for several days before it is actually “presented” and cleared–in other words just like an outstanding paper check that I have to keep track of.
I’m pretty sure it used to work like this:[ol]
[li]I initiated the payment on the utility website, using a debit card linked to my checking account[/li][li]Payment appeared on my bank account almost immediately as a pending transaction, showing the amount and the payee[/li][li]Amount of payment was subtracted from my available funds balance[/li][li]Within a day or two the payment moved from Pending to Completed Transaction status. Over and done with.[/li][/ol]
But now it works like this:
[ol]
[li]I initiate a payment to the utility on their website[/li][li]Payment appears on my bank account almost immediately as a pending transaction, showing the amount and the payee[/li][li]Amount of payment is subtracted from my available funds balance (So far, so good)[/li][li]Within a day or two, the utility still hasn’t “presented” the item for collection, so now the bank cancels the pending transaction and adds that amount back into my available balance.[/li][li]Some days down the line, as much as a week or ten days later, the utility FINALLY sends the transaction to the bank, and it’s only then that it clears. [/li]
[/ol]
I’ve learned not to rely just on the balance shown on my phone or my computer, so I don’t get burned this way anymore, but I consider this kind of service to be abysmal. I can’t think of any reason it should be like this, except that it generates a nice stream of overdraft charge revenue for the bank. There is no excuse for canceling or dropping a pending bill payment, because there’s no earthly reason to imagine that either I or SDG&E is going to decide that we don’t want to have the payment processed. There’s no reason for the bank to imagine that SDG&E isn’t going to collect on that payment. Any other possibility would be absurd. Moreover, we know that the final amount of the payment isn’t going to change; it’s not like at a restaurant where they have to add the tip in after they run the card.
Indeed. In Britain at least, one can pay by debit card — from a balance of say, £100 pay £95 — have the money instantly paid, but going to an ATM still see the original £100 hanging around for a few days ( but with only £5 actually available for withdrawing ).
Since it’s all instant electronic payment, I assume high finance doesn’t work in this way.
More or less this exact thing just happened to me, with my electric bill, and I’ve been meaning to ask my bank about it. Before I left for work the other day, I checked my balance online, then headed out. I stopped at the convenience store for a few items, and my debit card was declined on an $11 purchase. WTF?
I went by my bank later in the day to find out if there was a problem with my card. They looked things up, and it turned out that my utility payment had cleared that morning (with perfect timing, it cleared during the 10-minute window between checking my balance at home and swiping my card at the store). I was all, “What? I paid that online three days ago, and it just clears now?”
This wasn’t the first time something like that had taken longer than expected to clear, and in my case it seems to always happen if I pay the bill on the weekend. Pay on a weekday, and it clears immediately. Pay after 5:00PM on Friday and before 9:00AM on Monday, and suddenly it takes 3-4 business days. It’s as if somehow it takes that long for somebody’s server to process all of the transactions that piled up over the weekend, as if the computers can’t talk to each other during that time or something.