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Smart payment plan asks: why are you still writing cheques?

Mobile deposit
Mobile deposit
Photo by Chip Somodevilla/Getty Images

The team behind Smart Payment Plan wants to know: when was the last time you went to the bank? Online banking isn't a new thing, but it's become ever more popular, according to a 2013 report from the Pew Research Center's Internet and American Life Project. According to the report, more than half of all adults in the US used some form of online banking in 2013, more than double the amount in 2000.

Online banking and personal finance technology offers a number of benefits to people. You no longer need to worry about spending time in line at the bank, waiting to deposit a cheque, for example. Advances in technology can also make it easier to remember to pay your bills and to apply for loans. Bill pay programs means that you don't have to deal with the hassle of ordering or writing checks.

Mobile deposit

The Pew report found that the use of mobile devices for banking is also on the rise. Since 2011, the number of people who said that they used their smartphone for banking has nearly doubled, up to 35 percent in 2013, from 18 percent in 2011.

One convenience that mobile devices offer that standard internet banking doesn't is the ability to deposit checks using a smartphone. Plenty of banks, both large and small, now let people remotely deposit cheques, according to US News and World Report. The first bank to do so was USAA, which created a mobile app in 2009 for the iPhone.

Depositing a cheque via smartphone eliminates the need to head to the bank, fill out those pesky deposit slips and wait in line. Instead, all a person needs to do is take a picture of the front and back of the endorsed cheque. The images of the cheque are sent to the bank through the mobile app.

The technology is still coming along, though. Because there is a risk of fraud, or of having a person try to deposit the same cheque in multiple accounts, many banks limit the amount a person can deposit on a mobile device either by day or month. Mobile cheque deposit is ideal for people who only receive the occasional paper cheque. But, people who receive large sums via cheque will still need to pay a visit to their teller.

Online bill pay

Online bill pay is another technology that is changing the way people approach personal finance. Your bank most likely has some form of online bill pay. If it doesn't, you have the option of working with a company such as Smart Payment Plan. Online bill pay programs are different from the e-pay features offered by companies themselves. You work through the bill pay program, not directly with the company, for one thing.

The company you decide to pay doesn't have to accept electronic payments for you to be able to pay them using a bill pay program. If you decide to pay your car loan using online bill pay, for example, your bank will create a cheque in the amount of the payment, then mail the cheque to the lender. Any amount owed is deducted from your bank account.

Some bill pay programs, such as Smart Payment Plan, allow you to manage your cash flow by making smaller payments based on your paydays. For example, you might be paid twice a month, but need to make your car payment once a month. Instead of paying one lump sum of $500 each month, you can schedule two payments of $250 based on when you receive your paycheque.

Paying every other week instead of once a month helps you pay off any debt more quickly. If you make 12 payments of $500 one year, you'll end up paying $6,000 over the course of the year, note the team at Smart Payment Plan.

But, if you divide your payments to better match your pay schedule, and pay every two weeks, you end up making 26 payments of $250 over the course of one year, meaning you pay $6,500 that year instead of just $6,000. The extra $500 per year might not seem like much, but it can help you chip away your loan more quickly and will mean you end up paying less interest over the course of the car loan.

Online bill pay programs also help keep your credit healthy and reduce the chance that you'll owe late fees. Many programs let you schedule your payments. You can program your car payment for the first and 15th of each month, for example, and your cable payment for the tenth of each month. With automatic scheduling, the chances of missing a payment are slim.

Online IOUs

Technology has made it a lot easier to pay your friends back when you owe them money. Instead of having to wait until you see them again to give them cash or sending them a cheque in the mail, you can use an online payment service to give them what they're owed.

Many payment services, such as Paypal or Google Wallet, only require you to have the person's email address or cell phone number. Once that person receives the money over email, it's up to him or her to transfer it to their bank or leave it where it is, so that they can pay someone else down the line.

Thanks to technology, you don't have to worry about missing payments, running out of cheques or wasting a weekend day in line at the bank. Services such as Smart Payment Plan, Paypal and the mobile app from your bank are all making personal finance more convenient for everyone.

Amy Freeman contributed to this article.