I was browsing the web when I stumbled upon this article, which is from a website called Get Rich Slowly. In it, the author talks at length about the pro’s and con’s of autopay as a method to pay your bills. I pretty much agree with everything that it says, which in summary is that autopay is great because you don’t forget bills, but a problem because you are giving everyone access to your account. It also made me think about my own experience, which has evolved to having the technology work for me quite well. Let me tell you about it….
For quite a number of years, I was hopeless at paying bills. I would often gets calls from the call centre about a missed bill or a missed payment, so much so that I was starting to expect them! Because I often waited until I got paid, the bill would end up in a drawer somewhere totally unpaid and it was costing me a fortune in late fees and driving me mad.
I used various systems to help me remember, corkboards for bills, reminders in my phone but some bills would always slip through the cracks.
Anyway, eventually I discovered autopay. It was great, no more reminders to set, corkboards to use, it just worked automatically, and most of the time I could line it up with my pay and just forget about it.
Problem was, it didn’t always work the way I wanted. The first problem I encountered was that if something odd happened with my pay, all of a sudden all my autopays didn’t work. One time, work missed paying us by a day and I ended up with hundreds of dollars in fees from the bank dishonoring the payment. The other was that sometimes the institutions would come and take the money at the wrong time or in the wrong amount. I would walk up to a shop and try and send my card and discover that my bill that month was bigger or some company had decided to take an extra payment and all of a sudden I didn’t have any money to pay for lunch.
So, I decided to put a stop to all the autopayments before I got even more fees. But what to replace it with?
That’s when I noticed that pretty much ALL my bills had a BPay number on them. In Australia, BPay is a pretty standard system where you can pay money directly out of your bank account to a company that sends you a bill. The important thing about BPay is that they don’t have access to your account, you have to initiate the transfer to make the money change hands. Some further investigation revealed that not only did my bank allow BPay, but they even allowed me to schedule it! An idea was forming.
I went through all my bills and worked out a rough fortnightly payment for each one. For bills like electricity, I divided by 13 weeks for the quarter, for bills like my mobile phone I took the minimum monthly amount and divided by two. I then went through Internet banking and set up payments for all the bills to come out straight after I got paid each fortnight.
It worked like a charm!
I discovered that pretty much everybody will keep track of your BPay payments in their system and credit them towards future bills. So, the phone company remembers you made a payment in the middle of the month and applies a credit to the value left when they send the bill. Assuming I don’t go over my call and data cap limits, it just pays itself automatically every month and I don’t need to do anything. If I do go over, then I can see it when I get the bill ($150 due in two weeks and I know only one more $70 payment will go out between now and then) and set up a once-off scheduled payment or an adhoc payment for the difference.
Of course, for some services this means that sometimes I get ahead. For instance, I am essentially paying my mobile phone bill fortnightly and it’s a monthly bill, so I am making a month more payments than I need across the course of a year, but again this is easy to spot and it’s really easy to adjust the schedule in my Internet banking to skip a payment. Sometimes it just works out because I spend too much one month and the overpayment balances it out.
By the time we got our home loan this system was working so well for us that when they had BPay as a payment option, there was basically no choice. Now we pay our home loan ourselves every fortnight and it gives me total control to pay more if I want, or to skip a payment if we are getting ahead (and I want the money for something else). I can even set up a once-off schedule payment to take the money we skip and funnel it into a savings account so I don’t spend it!
Overall, it’s a great way to work the autopayment mechanism but keep control of your own money. I’m so happy with it that when we go to London later this year for my Long Service Leave I think i will just leave it in place to continue to collect my pay and pay the bills, transferring whatever is left over into a UK bank account for us to spend.
I think this is a great example of technology enabling a better life for us. I don’t know what I would do without technology in this instance, probably just continue to pay late fees on bills or overuse my corkboard! But since it’s here, I recommend everyone give it a go.
Nick Bilton really nails it in this article when he says:
To this day, I’m not actually sure how many megahertz my iPad operates on. And frankly, I don’t care about the technology inside the technology anymore. It just works — for the most part — and therefore consumers no longer need to think about it.
This is so true. I just bought myself an iPad mini and I have NO idea what processor it has in it, how much RAM it has or even what the megapixels are in the camera. Back when I owned an AMD Athlon and built my own computer these things used to be important, but these days it’s design that rules the roost, not technology. I am more interested in how the iPad mini feels in my hand, the fact that I can hold it in one hand, or that it automatically receives all my e-mails and iMessages than what kind of processor it has.
When you think about it, it’s actually an underrated change that Apple has made to the technology industry. Yes, they revolutionized the music industry, the phone industry, the tablet industry, but they also made us more interested in feel than figures, made design more important that engineering and changed the market for a whole slew of technologies. All the way back when they told us we could fit “1000 songs in our pocket” rather than telling us “comes with a 5gb microdrive”, they knew that this was more important to the consumer.
If you think about it, then perhaps this is the most important contribution a company can make.
Tim Cook in his interview with Brian Williams (good to see that the ol’ company spirit is still alive with the new CEO!)
Marco Arment, creator of Instapaper
Just reading this article by Dan Frommer that makes an interesting point about how Apple always announces price and ship date whereas other manufacturers (Microsoft being the most notable recent example with Surface) don’t announce either!
Dan makes some really good arguments as to why this is, but I think the most compelling argument is summed up really well by one of the comments, which says:
Apple does not have the issue that they have to make an announcement, regardless of the amount of vapor in their current product, just because Apple is making an announcement that week.
This couldn’t be more true. Apple don’t have to rush to make an announcement before the leading smartphone maker makes an announcement because they ARE the leading smartphone maker. They make the announcement on their own timetable and everyone listens to them.
I noted this phenomenon most acutely yesterday when I was driving to and from work. I heard people talking about the iPhone 5 on the morning drive show, the afternoon drive show and then also noted that it was mentioned on the 6’oclock news! What other smartphone manufacturer has this much awareness in the marketplace? I don’t remember the announcement of the Samsung Galaxy S III being reported anywhere and I suspect many people don’t even know who HTC or Motorola are.
I think Microsoft, Samsung, Google etc would all love to announce shipping and pricing when they announce their products, but they are always playing a game of catch-up and chasing their tales. Until they stop doing this, the phenomenon is going to continue.
Exhibit A (above) is now the contents of my pockets on a daily basis. Well, almost - this is a promotional image from TwelveSouth, the makers of the BookBook iPhone case, but it summarises quite well what I now carry with me everyday. The most important change is that I have successfully ditched my wallet in favour of the BookBook, and I wanted to write a short blog post talking a little bit about how this has worked for me.
In short: it’s great. Sure, it took a bit of getting used to and some serious wallet lightening, but the end result is something very light and easy to carry. I also love the fact that it lives in your front pocket, so no more sitting on a massive wallet or worrying that somebody will pickpocket you from behind.
There have been a few teething problems though. For starters, I had to work out which cards I had to bring with me everyday and ditch the rest very unceremoniously. The BookBook supports a maximum of 4 - 5 cards, so this was quite hard, especially because I am part of the Woolworths and Coles (two big Australian retailers) loyalty programs and both have a loyalty card. To solve this, I tried putting the barcodes for these in my phone, but then discovered that they won’t scan properly from a phone on the checkout line. This meant 2 of my 5 slots were already used up.
Luckily, I was able to streamline the other components to just a debit card, a credit card and a license, but it’s been tight.
Do I ever miss my additional cards? Well, I kept my wallet full of the other cards and keep it in my bag, so it’s easy to access them if I need them (just a little forward planning required), but the short answer is that aside from a few problems at the beginning where I would forget to get a card from my wallet before I left, it has been pretty easy. I can even find room in the BookBook to squeeze in the extra card for those times when I need it, so no extra wallet required. Score one for the BookBook.
The other that I thought I might try was getting one of those fancy new PayWave cards from visa. Since my BookBook only holds a few cards, I figured that I might be able to pay for things by just waving my phone in the general direction of the eftpos machine. This has worked ok, but I have quickly discovered that the crossover between stores that I can spend less than $35 at that also have the PayWave hardware is quite small, so I haven’t had much chance. Hopefully this will change moving forward, I quite like the idea of swiping my phone iRobot style to pay for stuff.
As for the BookBook as a case itself, I’m pretty happy. The reviews I’ve read talk about the inconvinience of folding it back on itself to make a call and also the lack of a camera hole, but I’ve found that both of those can be fixed if you’re willing to take the phone out of the case if you want to use it for lots of shots or a long phone call. The design of the case makes this easy to do with the easy to remove tab at the top (at which point the phone slides right out), and for short calls folding it back on itself works just fine.
Overall, I’m finding myself extremely happy with my wallet minimization efforts. For me, it’s working very well to replace my wallet and make my pockets quite a bit lighter. I am so happy in fact, that when I get the “new” iPhone in October, I will probably wait a little while to see if TwelveSouth come out with a “new” case before making the plunge. It’s either that or go back to the bulky wallet, and I can live without that!