Fees for electronic bill paying

[matt819]

Any bankers or credit card processing types here?

I do some of my bill paying online or via telephone bill pay services (Verizon, for example). Fees for these services varies, as follows:

My bank: I can pay my bank-related bills (credit card, insurance, etc.) online at no charge.
Verizon: Online (frankly, I'm not sure and am too lazy to check).
Verizon: By phone - $1.50 fee
Cell phone company: By phone (providing payment data to a human), $3.00 fee.
Gasoline card: By phone (again, via a human), $8.00 fee

You get the idea.

There is little question that most banks and large companies are out to screw the little guy (and their customers) because most don't give a damn. Either their customer base is sufficiently large that losing a handful of pissed off customers doesn't even merit a decimal point on the bottom line. Or they are the only game in town (especially the case with cell phone companies given that coverage by all companies is not ubiquitous).

My point is not to rant and rave about banks (in short, consider the rant as being implied in the post). My question is about the real costs for companies to process such payments. In other words, if I send my payment by mail, it costs me 37 cents, and then someone, somewhere has to do something with my check, though I'm not being charged for this service. If I pay online, it's all automatic, and yet I'm still being charged a fee. If I pay by phone (via touchtone), again, it's all automatic).

The question is, does it really cost the bank something to process these payments online or by phone, or is this simply a way to generate additional fees?

I certainly don't object to anti-bank or anti=corporate ranting in reply, though I would really appreciate a knowledgeable response, if anyone knows.

Thanks.

[Florida_Geek]

1. I can understand up to 2:00 to talk to a service rep to do this

But I have heard of 8-10 dollars for the "service". To take the time of a human CS rep does cost money and a 1-2 dollar service fee is understandable. BUT no higher it becomes a rip off.

[KC21304]

2. I know that I am not addressing the specific questions

you asked, but have you thought of having these bill taken directly out of your checking account, if you have one ?

We have our gas, water and light, cable with internet, land phone, cell phone and insurance all taken out of our checking each month and it doesn't cost a cent.

[matt819]

5. Sure. . .

but inflows do not always coordinate neatly with the outgos - thus the need to take care of these things on a one at a time basis.

[mcscajun]

3. Yes, it really does cost the bank...

I worked in Operations & IT for a major bank in NYC for many years.

Costs: servers, telecommunications, records retention, IT & support staff, and more. Once you're done telling us what you want paid, when and how much, those are aggregated and transmitted electronically to most payees, but not all. And yes, there's even a cost for that; also, for some payees, we still have to cut one big check representing all the payments to that vendor/company and mail it.

All that said, there's still profit needed to be made on everything a bank does, so yes...fee income is in there.

Find a bank that doesn't charge for online bill paying...they're rare but out there. And personally, I prefer to pay my bills through my bank online rather than let vendors tap my account on their own. I just feel safer.

Good luck!

On edit: And I forgot to include costs for payment tracking and government compliance :P

[matt819]

6. Thanks. (nt)

[Cleita]

4. A good old fashioned postage stamp is a lot cheaper.

These services should be free, I think, anyway.