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I live in a retirement home, which I will call RH. Until recently, RH allowed us to pay our monthly bills (which are not the same amount each month) automatically with a credit card. Because of high charges from the credit card companies, RH decided to discontinue payment by credit card altogether.

I assumed that we would be able to switch over to "checking account auto pay." This option was not previously avalable to us. But as long as we had the auto pay through credit cards, that was not important. But RH says NO they won't allow checking account auto pay. They refuse to say why.

Question: Could someone with a banking background tell me why RH might have good reason not to do checking account auto pay?

  • Is dropping off a check at the front desk each month inconvenient? – JoeTaxpayer Mar 5 '13 at 0:09
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    You can also use bill payment from your bank which most likely would mail the check to them as they won't be accepting electronic payment. Since the monthly amount changes, you would still not be able to do it automatically unless you don't mind paying "expected max" every month and then adjusting it every quarter, six months or annually. – amit_g Mar 5 '13 at 2:17
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For the same reason - costs. Checking auto-pay is not significantly different in its essence from the auto-pay through credit cards. Many times the merchant gateways used are exactly the same, and there are fees attached to these transaction that might be lower than CC, but still significant to your RH which is apparently running on a tight margin.

You mentioned that currently there's no checking auto-pay option, which means that in order to start providing it they'll need a new contract with their merchant gateway provider (or get a new provider), billing system adjustment for the new payment method, stuff training, etc etc. These are significant start-up expenses.

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