Electronic bill payment is a feature of online banking and telephone banking, similar in its effect to a giro, allowing a depositor to send money from their demand account to a creditor or vendor such as a public utility or a department store to be credited against a specific account. The payment is optimally executed electronically in real time, though some financial institutions or payment services will wait until the next business day to send out the payment. The bank can usually also generate and mail a paper cheque or banker's draft to a creditor who is not set up to receive electronic payments.
Electronic billing can also feature invoices sent by e-mail or viewed on a secure web site (with notices of new invoices being sent by e-mail). The payment may be either by explicit authorization by the accountholder, or automatically with pre-authorization.
Most large banks also offer various convenience features with their electronic bill payment systems, such as the ability to schedule payments in advance to be made on a specified date, the ability to manage payments from any computer with a web browser, and various options for searching one's recent payment history: when did I last pay Company X? To whom did I make my most recent payment? In many cases one can also integrate the electronic payment data with accounting or personal finance software.
Peer-to-peer payment systems are extremely popular. One example is PayPal, a general-use acquirer. The buyer and seller must have a PayPal account. PayPal is used by many online sellers, such as 75% of eBay sellers, overstock.com, ritzcamera.com, and Walgreens.com. PayPal is also sometimes used to pay for personal debts in situations where both parties have an account.
Electronic bill payment and presentation (EBPP) includes an electronic bill payment system (EBPS). Although this technology was available from the mid 90's onward, only 26.2% of U.S. households had internet access at that time according to the U.S. Department of Commerce. By August 2000, adoption of EBPP systems started to dramatically increase. The customer is notified (typically be email) by the biller, and then is responsible to log on and pay the bill through the biller's website.
Read more about Electronic Bill Payment: Limitations (United States)
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