Bill Pay By Due Date, Please

Tue Oct 20, 2009 5:08:41 pm by Dustin
Filed under Dealing with People, Finance, General

Ok, I am going to rant a little now. Feel free to tone out if you wish.

As you are probably aware, many banks and online stores allow you to use some type of electronic bill pay. Simply put, this allows you to specify a payee, amount, and date to make a payment. The bank will then send a (physical) check on your behalf to the payee on that date. Pretty nifty.

I use these for everything: rent, credit card payments, transfers to savings, etc. In fact, I have even used these to pay friends and family back when I owe them money. For example, my sister and I will buy gifts for our parents and I will pay her back using this method. Quite easy. I do not think I have actually written a check in three years since I started completely using this system.

Ok, history over, now rant time.

When creating a payment I have noticed banks, institutions, and otherwise will allow you to choose the date to send it. For one-time or manual payments this works groovy. It will show you (normally on a calendar) how long it takes to mail, including weekends and holidays and when it will arrive. Perfect.

Recurring payments are not as nice. I will use my rent as an example. It is due on the first of every month. It takes five business days to mail. This means it must be mailed the prior week for every month that the first is not on a Friday. Given, month lengths I have specified to have it sent on the 26th of each month. This makes it late, but my apartment does not count late payments until the fourth.

Now, image this is December with super holiday time. If the 26th is Christmas Day Observed, then the payment is not processed or mailed. Ugg. Results equal late payment. (I did not do the math, so this might be a bad example. Point is, holidays screw it up. Moving on.)

Currently, I monitor these months and manually modify their schedule. I am assuming there are a couple days a year where money is transfered earlier than needed because others follow a similar system.

Better Solution. Can I specify a due date (last day of month)? The system would then determine how many days ahead it needs to send the payment – considering holidays, USPS schedule, and such – and send accordingly.

This is a win for the consumer and the bank. The customer gets money in their account longer and more accurate payment processing. The bank gets more money in their accounts and less headache from missed payments.

Alternatively, actually using an ETF process would be even faster and accurate.