I’ve been all in on using my banks bill pay system for a number of years now for property tax / water bill / etc. Stamps & check books cost money, but scheduling someone else to cut the check, stamp and envelope it, and stick it in the mail on a certain date is free. It boggles the mind.
Your bank's bill pay involves someone sending a physical check?
In Canada, we have "bill pay" for utility, property tax, credit card, etc. but all that happens is your bank transfers money to the biller's account. The biller pays a bit for this service but evidently much less than the cost of handling physical checks as I've never seen a surcharge for it. Even the small town of 3,000 I live in is set up to receive property tax and water payments through this system.
I think it depends, banks can have an established relationship with a utility or service that will accept bill pay as an ACH. At least with my bank, I can setup a bill pay for anybody. I just need to provide a name, address and account number. If I do this for someone the bank isn't familiar with, they send a check in the mail.
In the early 2010s I worked for Fiserv, who at the time provided "online bill pay" services to about 80% of US banks (I don't recall if they're in Canada or not). The overwhelming majority of the bank customers using that service held beliefs similar to what you expressed... it's an online payment through my bank, why on earth would it be a paper check?? They were wrong. The really fun thing about that system was that the customer had absolutely no way to tell what kind of payment the system was going to send to a given payee. A payment that processed electronically for years could suddenly go as a physical check for any number of reasons. Maybe the customer changed something that was slightly incorrect... maybe they should have changed something but didn't... maybe the system just had a hiccup that day.
Regardless of who makes your bill pay service or exactly how it works, my main advice if you use any bill pay service is to ready the fine print very closely and be sure you understand what you have to do to be covered (late fee reimbursement, etc) if a payment does get screwed up.
Don't read the fine print, it's always bad ("we'll charge a fee if we want") and you can't avoid it (no free market for competitors) and knowing it only increases your risk liability.
It’s hit or miss, some utilities/bills are handled in the bill pay system as bank transfers, but other utilities they fall back to issuing checks. For me I’d say it’s 50/50, in a 500k person county.
