Why is this free?
 

I don't get this.

To take care of local bills that dont' have their own web site, I have signed up for bill pay through my bank's online banking program.

So I just go in, tell them to send the water company a check for this amount, and they do it. I can see that the transfers are not electronic, that they are showing as a cashier's check being issued.

I'm liking it, because I don't have to write a check, pay for checks, pay for postage, or deal with getting it mailed.

But why do they do it?

I can see how it is to their advantage to have customers do as many electronic transfers as possible. I don't see how this saves them money though.

Link?....

They do it because one bank said they would do it and started to get more customers which means more deposits which means more money to loan which means more revenue for the bank and had to compete with that bank so that they did not lose customers to the other bank offering this service.

I think they also do it for free because it doesn't involve you using a teller. All but gone are the days when banks were in huge cavernous buildings and having 40 tellers on the floor at all times. More online banking means they can keep less tellers, which saves them millions per year.

I've heard that some banks actually charge you a fee if you decide to actually go up to a teller to do your banking.

Okay, that makes sense then.

Sort of like offering a freebie to lure me in and keep me happy and using only their services.

Thanks! :)

Look, how am I supposed to stalk you if you won't even give up a link to where you do your banking??

:(

I've never heard of bill payments being done via cashier's check with any online service. How are you sure they are issuing cashier's checks?

Banks would do it electronically because most utilities or companies that get numerous payments will hold an account at the main branch - they pay fees & the bank also has their investments/loans and a multitude of other services they are making money on.

CDSmith...check your q.



I'm assuming it is going out as a cashiers check, because when I look at my statement from whatever billing entity, it says "cashiers check received" with the date and pymt amount.

Edit: I am not saying every payment goes out that way. I don't use it to pay any bills of places that already have their own website, ie visa, mc, student loan, etc.

Just that for the places that don't have electronic payment capability it seems to be their way of handling it.