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The Ins And Outs Of ePayments

The Ins And Outs Of ePayments

By Carla Hindman
Director of Financial Education, Visa Canada

Are you ordering far fewer cheques for your bank account these days? Does a roll of postage stamps seem to last a lot longer? Like most people, you’re probably performing many more financial transactions electronically, either by choice or because companies and government agencies are increasingly making it all but mandatory.

For example, most gyms require automatic deductions from a chequing or credit card account. Utilities, mortgage lenders, insurance companies and others strongly encourage electronic payments. And with the Government of Canada phasing out federal government cheques by April 2016, most Canadians will have some experience with electronic payments.

Electronic transactions have caught on because:

They’re cheaper. Businesses save on the costs of printing, processing and mailing millions of paper cheques and statements; and with a single stamp costing one dollar, customers paying bills electronically can rack up savings over time. And millions of tons of paper are saved.

They’re faster. Bill payments, funds transfers and direct deposits to your bank account can occur the same day, versus being delayed in the mail. And, if you sometimes forget to mail payments on time, auto payment protects against late fees and interest charges.

They’re convenient. You can choose one-time bill pay, where you first review your bill and then authorize payment; or recurring bill pay, where your bills are paid automatically at a scheduled time – either for the full amount (usually mandatory with utilities), the minimum payment due, or an amount you choose. You can usually have funds drawn from either your chequing or credit card.

However, as with email or any kind of online activity, you should take precautions to protect your computer (and cell phone) from being hacked. For example:

  • Make sure your anti-virus and anti-spyware software is up-to-date.
  • When making online payments, look for safety symbols like a padlock icon in the browser’s status bar, an “s” after “http” in the URL, or the words “Secure Sockets Layer” (SSL).
  • Review credit card and bank account statements regularly and report duplicate bill payments or suspicious/unauthorized charges to the card or account issuer.
  • Ask whether your credit or debit card offers “zero liability” which means you won’t be responsible for unauthorized or fraudulent transactions.
  • Regularly order your credit reports from the two major credit bureaus (Equifax Canada and TransUnion Canada), and review for errors or fraudulent activity. You can ask for a free copy of your credit file by mail from both bureaus.
  • Create complex, random passwords and change them regularly.

Be a savvy consumer whenever using a bill-paying service:

  • Ask if any fees are involved.
  • Before signing the agreement, make sure you understand and accept the terms.
  • To stop service, you may need to notify the merchant as well as your account or credit card issuer. Cancellation may take a month or two to become effective, so plan ahead.
  • If your payment card expires, the merchant will need new card information to ensure uninterrupted service.
  • Track expenses carefully and keep your budget up to date.

Carla Hindman directs the Practical Money Skills program for Visa Canada. More budgeting and personal finance tips can be found at www.practicalmoneyskills.ca. As always, consult a financial professional regarding your particular situation.

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