Not all of us have the luxury of time to go to banks and other establishments to pay bills. Driving, falling in line and waiting for your transaction to be processed just takes too much of your time, which you could have been using in other more important and useful ways. When it comes to online banking, the ability to pay bills online is one of the top considerations for most people.

Free and Popular

Many Internet banks offer bill paying, together with other services including online account and transaction record transfers. Because you already have an account, they usually offer bill paying free-of-charge in an attempt to compete for more clients. In fact, some online banks add more enticements. Wells Fargo & Co., Citibank, the Bank of America, JP Morgan Chase & Co., and several other banks add sophisticated and impressive personal finance tools. They allow their customers to pay their bills faster, track where their money is spent, and monitor their accounts.

Since many of bill paying services are free, countless customers are signing up. A recent comScore Networks survey reveals that the number of payment services online rose 36 percent in 2005 from the previous year. Wachovie gets the top spot for the most satisfactory online banking website. Wells Fargo, the Bank of America and Chase follow closely.

CheckFree vs Paytrust vs MyCheckFree

Most online banks use CheckFree. This online banking service provider allows customers to pay paper bills and e-bills (virtual bills) from any participating company. What sets CheckFree apart from other services is that paper bills will still arrive at your doorstep even if the transaction is done online. If you use your bank’s online bill payment service, you will be paying bills electronically whenever possible. Should the biller refuse to accept electronic payment, your bank will be mailing out a paper check that will be drawn from your account.

If you spend much time away from home or if your bank does not offer any online bill payment service, you might consider signing up for a paid service such as Paytrust. Unlike CheckFree, your bank does not send bills to your home physically. Instead, these bills go directly to Paytrust, who will present them to you online. This means that you don’t have to worry that your paper bills might go missing, making it a very good option for you if you are not always at home. Paytrust allows you to take care of your bills whether or not your biller entertains electronic payment. In case your biller doesn’t, Paytrust will send you a paper check. Aside from that, you can view any of your bills online even if the biller does not issue bills electronically. With Paytrust, you can conduct up to 30 transactions a month. Keep in mind, however, that paying a bill and receiving a bill are two separate transactions. This means that you will be paying a maximum of 15 bills only. With Paytrust, there will be no need to worry about dealing with piles of paperwork. Another thing you should not forget is that your current billing address will be replaced by a Paytrust address. Nevertheless, you don’t need to worry about missing your other mail because any misdirected mailings will be sent to your home address.

If the idea of forwarding your bills to another address doesn’t sound appealing to you, you might want to check out MyCheckFree, the sister website to CheckFree. MyCheckFree is different from CheckFree because you won’t be filtered through a bank or other financial institutions if you sign up for MyCheckFree. It is also different from Paytrust because it accepts credit card payments provided that your biller will take them. The best thing about it is that it is totally free. There is a tradeoff, however. You may only pay billers that are affiliated with the site.

Bill Pay Software: Money vs Quicken

Naturally, every bill-paying service you will find handles bill payment. It should be noted, however, that not all of these services provide a complete finance management system. This is where software programs come in. Two of the most popular software applications are Quicken 2007 Premier ($75, usual price) and Microsoft Money 2007 ($60).

Microsoft Money 2007: Money 2007 allows users to pay bills via MSN Bill Pay for an additional charge. If you purchase the Premium version of this program, though, you will get two years of Bill Pay for free. It works pretty similarly as your bank’s online bill pay system. With this program, you will be able to pay e-bills as well as track your bills.

Quicken 2007: Quicken offers a more expensive system, Quicken Bill Pay. This software can manage your payments and bills. It can also provide a redesigned home page, which will let you see your balance information and transaction history.

Although most people may consider these programs to be an exaggerated approach to financial management, you can take a look if you are really conscious of your bill payments. If you choose to purchase any of these software programs, make sure that your bank supports information downloads into Money or Quicken first.

Online Wallets: PayPal vs Google Checkout

If you are looking for an easier ways to purchase items and receive funds, then you might want to consider taking a good look into online wallets. These are not really full-featured services for paying for purchases you make online but still enable you to make payments through the Internet.

PayPal: You may have heard of PayPal, which employs an online wallet system. An online wallet requires a credit card or a bank account. You will have to enter your bank account information or credit card number once and come up with an account name and password. Then, you can make payments to any online establishment or individual participating on eBay.

PayPal allows you to both pay bills and receive funds. While making payments through PayPal is free, there are also some limitations with regard to receiving payments especially if you want to accept debit and credit cards. For example, if you own an eBay store and you wish to receive payments through credit cards, you will have to pay a certain percentage (1.9 to 2.9 percent) as fees for credit card payments. Receiving payments from another individual’s PayPal account, however, is totally free, even for clients with basic accounts.

Google Checkout: Google joined the online wallets race by introducing Google Checkout. This service isn’t really as popular or as established as PayPal but early reviews seem to be suggesting that it can give PayPal a run for its money. A JP Morgan Securities survey states that Checkout is still having trouble with delays and not-so-reliable customer service. Currently, you can only use Checkout to pay sellers and not to pay individuals or receive payments.

Both Google Checkout and PayPal take security seriously. They have fraud-prevention policies in place. In case a fraudulent charge or a payment dispute arises, both allow you to file a claim. It is recommended that you use your credit card as payment method because you’ll get double protection. Credit card companies also have their fraud policies in place and working. Banks have policies, too, but they are not as strict as credit card companies.