Different Digital Payment Options During Social Distancing
Digital payments offer a convenient and safe way to make purchases, pay bills or send money without an in-person trip or handling cash. Always convenient, these at-home options become essential during this time of social distancing.
Disclaimer: When using any online banking or digital payment service, make sure the website and connection are secure and private. We do not endorse any specific provider or third-party app. The overview provided here is for information only, and based on services available as of April 2020.
What are my digital payment options?
There are many ways to make a digital payment, so let’s break this down into three categories:
1) Through online banking
2) With a third-party payment app
3) Direct payment through a company’s website or app
1. Through Online Banking
Your financial institution most likely has a mobile app or website to access all your accounts in one place.
You can make digital payments with Bill Pay:
Bill Pay is a service within online banking that allows you to make a single or recurring payment directly from your financial institution.
How does Bill Pay work?
In your Bill Pay menu, you’ll begin by adding info for the “Payee” who will receive your payment. You’ll need to know your billing account number and payment address, which is typically located on your bill or by logging into the company’s website.
Advantages of Bill Pay:
· You can give your bills nicknames for better organization
· Your payments are centralized within your financial institution. Get a new debit card? No problem. You won’t have to update account details, unlike setting up payments on your payee’s website.
· No need to share your account or card numbers with a third party, helping to protect your financial info.
2. Paying With a Third-Party App
There are many third-party apps that can make sending payments easier, whether to companies or family and friends. Some of the more well-known apps are:
· Venmo
· Zelle
· Paypal
· PopMoney
* PopMoney and Zelle are used within many financial institution’s online banking and/or apps. Utilizing these apps within a financial institution’s platform may change your user experience.
How do third-party payment apps work?
After downloading the app, you will enter your account and routing numbers to connect directly with your financial institution. The app may make very small deposits to your account and ask you to verify the amounts to ensure the connection is working.
Once your account is set up, you’re ready to send money. Each app works a little differently, but you will usually just need the email address or phone number of your payee to get started.
What makes these apps so popular:
It makes payments to friends and family streamlined. And, if you receive payments through these apps, there’s usually no fee to transfer the funds to your bank account and receive them within 1-3 business days. (Editor’s note: third-party apps may charge a percentage or small fee to receive funds directly or make specific payment types. Make sure you read the fine print before making and receiving payments.)
While we love how convenient these apps are, remember: Your funds may not be completely protected.
Most of these apps will allow you to hold those funds within the app after you receive a payment, in case you’re waiting on additional transfers, or expecting to pay another person with your balance in the app. But it’s important to know what happens to those funds if something goes wrong.
For example, if you make a payment to the wrong payee many of these apps are built on the trust of the payee to return the money to the sender or to contact their support teams to resolve the issue.
We recommend checking with each app before downloading them to see what kind of protection they provide.
Essentially, a lot of these apps run on a trust system between the payer and payee, so make sure you’re always aware of who you’re making a payment to and the potential risks that come with it.
One way to make using these platforms safer is to opt-in to receive notifications for every transaction.
It’s also important to remember that you are sharing (and storing) sensitive account info with a third party, so always be cautious.
Be sure to use a strong, unique password and the same level of security settings that you would use for online banking. For example, you might decline to save your username and password in the app. If the app offers biometric security options like fingerprint or face recognition, you may want to turn those on as well for additional protection.
Note: not all apps will be compatible with all payees. Check with the companies you make payments to before attempting to set up your payments from a third-party app.
3. Paying Directly through a Company’s Website or App
Making digital payments directly to the company’s website or app can also streamline the process of paying bills.
How most companies will set up your digital payments:
When you first set up your payments, they will typically ask you to enter your bank account and routing number or debit/credit card number. Then you can select if you’re making a one-time payment or want to schedule recurring transactions.
*Some companies may charge a small fee to process debit/credit card transactions.
Once you’re set up, you should be able to opt-in for notifications via text or email to verify when payments have been completed.
When you’re making a payment online to a company through their website or app directly…
· Check for the SSL certificate for their website. This certificate means your financial information will be submitted securely
· Make sure you’re logged in to the website or app safely and securely. Setting up two-factor authentication, such as texting a password to your phone, can help protect your account.
Most importantly, if you have questions about setting up digital payments you can always reach out.
At Together Credit Union, we know that many of us are changing our financial habits during this time, and you may have questions or need advice on how to best make digital payments. We’re here for you.
Visit our page about Access and Convenience Services to see what the credit union offers for streamlined options or contact us at 1-800-325-9905.
