Electronic bill payment
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 transaction account to a creditor or vendor such as a public utility, department store or an individual to be credited against a specific account. These payments are typically executed electronically through a national payment system, operated by the banks or in conjunction with the government. Payment are typically initiated by the payer but can also be set up as a direct debit.
In addition to the bill payment facility most banks will also offer various convenience features with their electronic bill payment systems. These include the ability to schedule payments in advance to be made on a specified date and various options for searching one's recent payment history. For example it allows the account owner to ask: when did I last pay Company X? To whom did I make my most recent payment? In many cases this data can also be downloaded and into accounting or personal finance software.
Although this technology was available from the mid 90's onward, uptake was initially slow until internet access by households increased. By 2000, adoption of electronic bill payment systems started to dramatically increase.
Using electronic Bill Presentment and Payment enables companies to fast-track customers payments online and get access to funds faster, which in turn results in cash flow improvement
For banks the advantages of electronic bill payments are reduction in processing costs and an increase in customer loyalty. In 2003 in one study the banks said that "customers who pay online show more loyalty and are more receptive to other offers".