Know the "Two-Step"

If you choose to pay bills online, it makes sense to understand the online bill pay process. There are two basic steps to paying a bill online: presentment and payment. Presentment is simply the receipt of -- and ability to view -- a bill or statement electronically. Payment is the act of electronically transferring money. When you come across the acronym EBPP as you pay bills online, you'll now know it simply stands for Electronic Bill Payment and Presentment.

What Can Go Wrong Paying Bills Online?

The real shocker? It may actually be safer to manage your personal finances electronically. In fact, researchers find it's more likely a thief will lift financial information -- like a bill or a bank statement -- from your mailbox than from your computer [source: Huddleston].

Yet there are dangers. Although it's possible to pay bills electronically while you're away from home, we have one word of advice: Don't. Putting personal information into a public computer, like the ones you'll find at libraries, airports or hotel business centers, introduces risk. Criminals can access these computers, install key-logging software and voila, your credit card numbers, passwords and PIN numbers are ripe for the picking. You're not much safer on your personal laptop or smart phone if you connect to a public Wi-Fi network, where even moderately tech-savvy criminals can steal your data right out of the air.

So now that you're back in your home office to pay bills, which browser offers the most security? The three primary Internet browsers now available -- Opera, Internet Explorer and Mozilla Firefox -- each have security measures like encrypted connections or warnings when a Web site appears unsafe. Of course, if you're not updating your browser as each new browser version is released, these safety measures will lag.

It's also a good idea to change your personal finance passwords once every two months; buy and install anti-virus and anti-spam software and update the software frequently [source: SafeShopping.org]. Type Web addresses into your browser instead of clicking on links sent via e-mail. This will help protect you from phishing, which occurs when a bank, company or organization is impersonated by e-mail; consumers receive fake e-mails, believe them to be legitimate, and then share personal or financial information. The e-mails also may contain links that, when clicked, lead to fake Web sites that capture user identities and passwords.