The simple answer is that bankers believe online billpay users remain customers for more years than customers who don’t use online billpay. And an extra year of your business is worth providing you with free online billpay.

Look at the math: Let’s estimate the average cost (to the bank) to offer you billpay at $0.50 per transaction and the average customer sends out 8 bills per month (I know this from banks). That means it costs the bank about $4 per month or $48 per year to offer you free online billpay. So if their assumption that you’ll stick around longer is correct, it’s totally worth offering online billpay for free. Why? The average checking account customer generates about $300 in revenue (fees, $ on your deposits, etc.) per year and new customers are expensive to acquire (~$200 per).

If you don’t want to be tied down to your bank or credit union, don’t use online billpay, set-up automatic payments or have any direct deposits. But if you’re like the rest of us, before you jump at the $100 offer, make sure the bank is convenient and that the checking account you’re opening includes all the features you’ll need.

You can check out FindABetterBank to compare features and fees for banks in your area.

Many banks today advertise ‘bonus options’ for their accounts that are already industry standard. If you’ve been the customer of only one bank for sometime, you may not know that other banks already offer account features that advertise as ‘new and free!’ or ‘coming soon!’ Here’s a list of features that are virtually industry standard. If your bank doesn’t offer these features, or if they advertise them as “NEW FREE” features, you may benefit from checking out a new bank. Chances are if your bank is behind the times with that feature, they’re are a number of other features that a better bank could offer you.

 

“Free Debit Card!”

This was a great discount when debit cards were first issued in the 70’s, but at this point, so many bank customers use ATMs and commit electronic transactions that most banks will lose customers if they don’t offer these. Still, many major banks charge card holders for debit cards. Make sure they’re not slipping in that $1 monthly fee without you knowing!
 

“Free Online Banking…!”

While initial skepticism about the safety of online banking kept many away, online banking now has an unprecedented amount of security. But it isn’t free for banks to offer online banking, so the question is: should it be free? Again, the bank wants to keep your service, and to do so, it must offer great features. Most major banks at this time do offer online banking where you can check your balance, transfer money between account, and export your account data into tools like Quicken or MSMoney. And all of this for FREE.
 

“…And Free Bill Pay!”

While bill pay is more complicated and expensive for banks to offer, there plenty of banks that allow you to schedule bill payments for free online.
 

“Free Introductory Checks!”

That initial offering of free checks is benefitical to you and to the bank because it familiarizes you with and gets you into the habit of using checks (which you’ll later have to buy). You shouldn’t have a problem finding a checking acconut that offers a free introductory box of checks. And many premium accounts come with free checks for the life of the account!
 

“Free Rewards Program!”

Many banks offer rewards programs for items like digital cameras, airline milage, and cash back, but the benefits of the program don’t need to be great. ANY sort of rewards program, (even one where you could earn points only toward porcelain toasters) can be called a rewards program. Make sure you know what you’re getting into with a free rewards program–while they can be good advertisement for the bank, a bad program is easy for a bank to offer.