If your business pays bills electronically, setting up payments with vendors directly through your bank can prevent security risks. A bill paying service is offered by most banks, and they have a vested interest in maintaining the highest security. Your vendors may not have the same security infrastructure.
Setting up a bill pay through your bank provides one login at one location and secures your information, instead of having multiple logins and transactions in multiple places.
Learn more by watching the video below...
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If you pay bills electronically, and most people do these days, you have a couple of different ways you can approach this. You can go to each vendor and set up a payment.
Let’s say you set up payments to an auto insurance company or a utility company and you're setting up each one of these payments directly with the vendor. Now with that you are giving credentials and setting up usernames and passwords. You're setting up a credit card number or you're giving them a bank account number, and they're storing that on their website.
The problem is that this can be a little bit of a security risk. It would be better if you can set it up through your bank website. Most banks now offer a bill paying service and have this capability. With that, you log into one place, one website. They already have your bank account number since they’re your bank.
Your bank has a vested interest in maintaining security, but your vendor’s websites may not spend as much on security. Your bank will. You have one login. You can set up each of your vendors as a designated vendor in your account and then do a bill pay out of your banking account. You're not passing out all those credentials and all that information, credit card numbers, bank account numbers, etc stored on other outside websites.
Banks will pay utility companies, insurance companies, Lowe's, Home Depot, etc because they have established relationships with them directly. If you need to pay an individual you can set it up so the bank will generate a check and mail it to that individual. It’s much more secure if you go to one place, enter your bills in, and do your payments directly that way