Convenience generally comes at a cost. When it comes to paying utility bills, no one wants to pay a penalty because he/she simply forgot to pay a bill on time.

But given all the work that one has to deal with, people loath to stand in long queues just to pay a municipality bill, a monthly life insurance premium or a telephone bill. Just keeping track of all the bills one needs to pay is harrowing enough.

Thanks to technology, life has just got a little easier. You can pay all your monthly bills sitting at home. All you need is a personal computer and an Internet connection.

Where do you pay?

Almost all utility service providers these days offer electronic payment facilities. Banks and financial institutions, in tie-up with these utilities, offer direct debit facility from customers’ bank or credit card accounts.

Once you register with the online bill payment facility provided either by the utilities or banks, the system works like this: The utility sends your monthly bill details to your bank, which then sends you an SMS or e-mail alert about the payment amount and due date. You will have to give the bank a standing instruction to debit the bill amount from your savings or credit card account. Once the amount is debited, you are intimated through an e-mail.

You can avail yourself of online bill payment services in three ways — registering with utility service providers or with your bank where you have a savings or credit card account.

You can also register with websites set up just to provide this facility.

Individual utilities provide online bill payment facilities in association with banks and financial institutions.

So, irrespective of where you bank, you can pay bills online by subscribing to the service provided by the company and giving a standing instruction to your bank to debit your account whenever the utility raises a bill.

Almost all banks offer online bill payment facilities for utilities with which they have a tie-up. However, banks offer this service to customers who have either a savings account with them or hold the bank’s credit card.

Alternatively, www.visabillpay.in or www.billjunction.com — the two dedicated websites from where you can pay your mobile and landline telephone bills, insurance premium, energy bills, magazine subscriptions online — have tied up with various billers in different cities and allow you to pay irrespective of who you bank with.

Visa International in association with BillDesk offers an online payment facility to all visa credit card holders in the country.

Billjunction.com provides the online facility only through the ECS mode and doesn’t accept credit cards. This service is owned by ICICI Bank-promoted TechProcess Solutions.

Then, there are government initiatives. Governments of Andhra Pradesh, Delhi and Karnataka offer online payment facilities for various utility services, including property and water tax payment and electricity bill payment through ECS or credit card.

Safeguards

If you pay your monthly bills through plastic, set a credit limit for all your payments. You can easily detect any unauthorised bill payment or fraudulent use of the credit card number when you get the card statement.

Moreover, you don’t have to maintain the requisite balance in your bank account all through the month to pay for the bills.

The billing cycles differ for each service and one needs to settle bills at various dates in a month. A credit card fills this gap nicely.

But there’s a caveat here: every transaction through a credit card attracts service tax and you must settle the outstanding in time to avoid penalties.

The direct debit facility from bank accounts or the ECS wins over credit cards because you can set a cap on the ECS debit. So, in case of a wrong billing, you don’t have to pay the excess. However, for every debit instruction, your bank may charge a one-time fee between Rs 20 and Rs 50.

Road ahead

Online bill payment is still in its infancy in India. According to the Internet and Mobile Association of India, the number of Indians paying bills online was 300,000 in 2005-06. The study saw the number going up to 1.8 million in 2007-2008.

An average Indian household in the top 10 cities pays 42 bills annually, most of it to finance, insurance, telephone and utility companies.

For billers, electronic payment is a cost saver as it reduces default and keeps a better record of payments.