However, home banking bill payment has had limited success. As home banking bill paying has evolved over time, an increasing number of institutions have offered it to their customers. In actual practice however, the vast majority of these financial institutions do not process the transactions themselves, rather they outsource the transaction fulfillment process to one of a very few providers, the most notable of which is Checkfree. The way home bill paying works today, the consumer gives a payment instruction to their institution or to the bill payment provider directly. This payment instruction is then converted, or fulfilled, into a payment of one of a variety of forms, including ACH, paper checks, or unsigned demand drafts.
Most disbursements happen electronically.
While home banking bill paying is very convenient from a customer viewpoint, and appears to be an electronic payment, as noted above, it is often not completely electronic. The systems allow for a very limited amount of information to accompany the payment, and as a result, the payee frequently has a difficult time matching the payment with a given bill. These paper transactions must be treated as exception items which delays posting to the customer's account. One result of this process is that the bill payment service is itself very expensive to offer, making it unprofitable for many institutions. Typically, this service costs the financial institution offering it between 30 and 50 cents per transaction.