One of the most convenient things about the Internet is the ability to pay bills online. Luckily, today’s websites make electronic bill paying as secure and safe as possible. Paying bills online saves time, paper, stamps and gasoline, and can also prevent the mistake of accidentally missing a payment. There are, however, a few rules to follow and precautions to take.
Most banking institutions offer Internet banking as an added value service, free of charge. To begin, simply visit the bank’s website and follow directions to sign up for online banking. The process involves creating a set of credentials that you will use to login to your private account pages. Once successfully logged in, you can do nearly anything that you could do inside a branch office. Check your balance(s), transfer money between accounts, pay credit cards issued from the bank, and so on.
There are two different methods to pay bills online. There is automatic bill paying, and manual bill paying. If you opt for automatic bill paying, money is electronically transferred from your banking account each month to pay creditor(s). You can assign as many or as few of your bills as you like to automatic bill paying. It does not have to be an all-or-nothing proposition. The other option is to manually pay bills online as they become due by logging into the necessary institution(s) and completing the transactions.
Online financial transactions are accomplished through a point-to-point encryption protocol. Everything sent from your computer to the website is encrypted before leaving your computer, and visa versa. Data gets decrypted upon arrival at either endpoint, making it unreadable en-route. Webpages that use point-to-point encryption have addresses that start with https, the “s” indicating the connection is secure, allowing you to safely pay bills online.
With banking websites doing their part, you'll also need to take a few precautions to make the process safe. Following the four tips below will go a long way to reducing risks.
1. Avoid clicking on email links to get to financial institutions. Malicious emails are designed by thieves to get you to reveal passwords and other sensitive information by appearing to come from your bank or other financial institutions. Clicking on embedded links can take victims to look-alike websites (called phishing sites) where visitors unknowingly compromise their own security by providing personal information like usernames, passwords and account numbers to thieves. To avoid falling prey, if you need to go to a financial institution, use a bookmark or utilize a search engine to navigate there.
2. Assume that all email requesting personal or “updated” information is a scam, even if it appears to come from a legitimate source. Email "from" addresses can be spoofed (faked) to appear to come from a real business. If you really think an email might be legitimate, call the institution that supposedly sent the email. Use your phone book or a bill to get the phone number. Do not call phone numbers included in the email, as these can be manned by scammers posing as employees of the institution. Note that banks do not use email to ask for personal or updated information.
3. Use your own computer to pay bills online. The company computer, a friend’s computer or a public computer might have rootkits or keylogger programs present without the owner’s knowledge. These programs can record keystrokes to a secret log, stealing usernames, passwords, account numbers, credit card numbers and more. The logs can be retrieved remotely by thieves without the owner's knowledge whenever the computer is online, which brings us to the final tip.
4. Scan your computer for viruses and malware before beginning online banking. Most people have a firewall and anti-virus program installed, but fewer have anti-spyware or programs that scan for rootkits and keyloggers. Check with credible websites like PCWorld, PC Magazine, TuCows and CNet to get the scoop on recommended scanners. Many of these programs are freeware. Choosing an established program with a solid reputation is a must, as many so-called scanners actually install spyware while masquerading as “cleaners.” If a scanner has to be run manually, it’s a good idea to re-scan your computer every month before preparing to pay bills online.
In today’s electronic world hackers will always remain a threat, but banks have a large stake in keeping you safe. They key is to practice good habits, minimizing risks while maximizing benefits: if you pay bills online, your checks won’t get delayed or lost in the mail; you won’t have to stand in lines to transfer money; you can see all of your statements, balances and due dates with a few clicks of the keyboard; and you can make direct payments in your swimsuit from a vacationing shore, or in your pajamas from your favorite recliner. You can’t say that about traditional banking.