December 18, 2023

What Is Online Bill Pay & How It Works?

Thanks to online banking, you don't have to hand-deliver bills or mail them in anymore. Instead, you can send an online bill payment electronically with your smartphone or computer without leaving your couch.

Even better, a bill pay service can take care of sending payments for you. So, what is bill pay?

Once you’re enrolled, an online bill pay service can send an automatic bill pay check or invoice to the right party, and bills can be paid from anywhere via a banking app or website — no need to write and mail a paper check.

Online bill pay is almost always available through your bank's website, a payment provider, and mobile banking apps.

What is a bill pay service?

Let’s start with an online bill pay definition. Many banks and credit unions offer automated bill paying, allowing you to organize recurring bills and pay them at your leisure and on time. Paying on time bolsters your credit history — even without a credit card.

Let’s use paying rent as an example. Paying rent the old-fashioned way, you would head over to the appropriate website or physical location, like a landlord’s office, and make a transfer or drop off your rent check.

With online bill pay, rent is automatically withdrawn from your bank account and the money is sent to the biller at the scheduled time with no action from you. You can often do this with regular bills that aren’t electronic.

Bill pay is ultra-convenient for two reasons. First, it’s done via a single dashboard; you don’t have to manage several portals, services, or apps when paying your bills. Second, this makes sure your bills are always paid on time — which is pretty helpful with recurring expenses. In fact, an auto-pay method can help you catch up on your bills if you find yourself forgetting their due dates.

Banks and credit unions aren’t the only way to use bill pay. Mobile app providers can help you pay bills faster and easier as well.

Online bill pay, which complements online banking, is offered by third-party bill pay services, banks, and credit unions. Everything is managed online through a website or mobile app with a focus on automation.

Online banking lets you access these services from virtually anywhere. These automated tools are an excellent solution for intelligent debt management.

How does bill pay work?

It’s different for each financial service or institution, but generally, you enroll in an online banking service and find the “online bill pay” option in your financial dashboard, which will allow you to configure payments.

To set up a payment — either one-time or recurring — you’ll need a billing statement or account number for the account you’re paying. At the very least, you’ll need the payee’s name, address, and the amount owed.

Your checking or savings account will need to be connected to the service. This will already be set up if you’re using your bank or credit union.

Pros and cons of bill pay services

Modern bill pay services offer many benefits, but there are some drawbacks. Let’s break them down.


1. Saves time. For everyone involved, including you.

2. Cheaper. No more paying for stamps and envelopes or wasting gas to hand-deliver checks.

3. Build your credit. Because you’re more likely to pay on time, online bill pay services boost your credit score. On-time payments account for 35% of your overall credit score. It's a great way to build credit without a credit card.

4. Reliable. When you mail a check, there’s always a chance it won’t reach the recipient. If you mail it out late, it won’t be cashed on time. These problems go away with online bill pay.

5. Eco-friendly. No more wasting paper, gas, or other resources to pay your bills.


1. Ready or not, e-bill money comes out. Even if you don’t have the funds to cover it, the bill money will come out, which could lead to overdrafting. Assess whether your pay periods align with your bill pay schedule.

2. Personal audits are a must. If monthly bill amounts are always changing, you may run into balance issues. You can catch these discrepancies with regular audits.

3. Digital data concerns. Your online privacy and security may face potential risks because your personal information stored by banks and payment providers is vulnerable to nefarious actors.

4. Accidents happen. You may incorrectly schedule payments or see delays because of a technical issue. Payments may fail, missing the due date. You’ll still need to check in to avoid this.

5. Not always fast. Online services aren’t always speedy. Merchants may take up to five days to send scheduled payments, or the transaction may run into issues. It’s best to schedule payments early, if possible.

What is bill pay used for?

Bill pay services aren’t a one-size-fits-all solution. They rely on the biller to play ball too.

Your biller must accept online or mobile payments, and the process may vary depending on the merchant they use. Landlords can refuse to accept digital payments altogether, unfortunately.

Otherwise, here are some great examples of expenses you can pay electronically with bill pay apps:

  • Your rent or mortgage

  • Auto loans and auto insurance

  • Utilities like gas, electricity, or water

  • Phone, cable, internet, or streaming service bills

  • Credit card or personal loan balances

  • Leisure activities like gym memberships, sports leagues, or theme park passes

  • Recurring charitable donations

Are online bill pay apps safe?

They certainly won't bite. As with anything online, your security cannot be guaranteed, but you can take steps to minimize risk.

When you choose the right bill pay service and use trustworthy financial institutions, there’s little to worry about. Online bill paying is much safer compared to mailing a check (which could be intercepted), or even handing over your credit or debit card at a restaurant (where someone could copy your information).

Financial platforms also use strong encryption measures to protect sensitive information, including your financial details. It's extra security you wouldn’t get with traditional bill payment options.

Just like exercising mindful spending habits, good use of online bill pay services can really improve your financial health.

EarnIn helps you handle bills on time

Before you take advantage of an automated bill pay service, you should make sure you have the funds you need to cover your expenses. EarnIn can help with that.

The EarnIn app offers flexible tools that give you a new set of options with your money. Our Cash Out tool lets you access your pay as you work — up to $100 a day and up to $750 every pay period — so you have what you need to keep moving forward, whatever life sends your way.

Download the EarnIn app today and start living with money at the speed of you.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

You may enjoy

How to Fix and Repair Your Credit: A Detailed Guide
How to Fix and Repair Your Credit: A Detailed Guide
Fixing or repairing your credit can give you more financial freedom and better rates. Here's a step-by-step process to improve your credit score.
What is a Virtual Credit Card: The Ins and Outs of Modern Virtual Credit
What is a Virtual Credit Card: The Ins and Outs of Modern Virtual Credit
When reviewing credit cards, you'll notice there are new virtual cards. Read this guide to learn what is a virtual credit card and why you need one.
Your Phone, Your Bank, Your Money: A Guide to Virtual Wallets
Your Phone, Your Bank, Your Money: A Guide to Virtual Wallets
You can use a virtual wallet to store funds, cards, and payment info, but is your money safe? Here’s everything you need to know about digital wallets.
Bank Statements 101: What They Are and How to Read Them
Bank Statements 101: What They Are and How to Read Them
One of the most valuable resources to have while budgeting is your bank statements or billing statements. Here's why, what they are, and how to read them.
ACH Deposits: What They Are and How They Work
ACH Deposits: What They Are and How They Work
Learn what ACH deposits are and how they let you move money electronically to pay bills and receive direct deposits without a paper check.
6 Mobile Banking Benefits You Should Know About
6 Mobile Banking Benefits You Should Know About
Download your financial institution’s mobile app to discover mobile banking’s benefits. Learn about mobile banking features and services.
Early Direct Deposits: How to Get Paid Early
Early Direct Deposits: How to Get Paid Early
Explore early direct deposits, how they work, and ways to optimize your financial journey. Get paid ahead with trusted online banking solutions.
What is a Transaction Dispute? Reporting Fraudulent Charges
What is a Transaction Dispute? Reporting Fraudulent Charges
Find a suspicious charge on your credit statement? You'll need to dispute the transaction to reverse it. This guide will walk you through the process.
Pay Periods: Definition, Types & How They Work
Pay Periods: Definition, Types & How They Work
Learn everything you need to know about pay periods, including the various types, how they work, and how they impact your finances.
Cashier's Checks vs. Money Orders: 7 Key Differences
Cashier's Checks vs. Money Orders: 7 Key Differences
Learn what a cashier’s check is, the differences between cashier’s checks and money orders, and the fees you’ll likely pay for each. Discover which is safer.
What is a Neobank? Examples and Benefits
What is a Neobank? Examples and Benefits
What is a neobank? Discover the difference between traditional banks and neobanks, and learn the best platforms, all in this handy, simple guide.
Big Banks Don’t Want to Help You Manage Money
Big Banks Don’t Want to Help You Manage Money
Many people are hunting for better banks since big banks don't help us manage our finances. Read here to know more.

EarnIn is a financial technology company not a bank. Subject to your available earnings, Daily Max and Pay Period Max. EarnIn does not charge interest on Cash Outs. EarnIn does not charge hidden fees for use of its services. Restrictions and/or third party fees may apply. EarnIn services may not be available in all states. For more info visit

Download on the App Store
4.7 +189K ratings
Download on Google Play
4.6 +200K ratings