"We understand that you may be disappointed by the discontinuation of your free service," PayMyBills President Flint Lane wrote in an e-mail to the affected customers. "We hope that you recognize the economic realities of providing this service."
The customers had signed up for the special promotion about a year ago, before PayMyBills was acquired in August by Princeton, N.J.-based Paytrust.
It no longer "makes sense to carry these customers," said Paytrust Chief Executive Ed McLaughlin. The free service ends May 1.
"You never want to raise prices, but the majority of people say they understand," McLaughlin said. "The promotion was subject to change at any time, and in the current economic environment it makes sense for us to make these changes."
The affected customers have been offered PayMyBills services at a reduced price of $10.95 instead of the usual monthly $12.95 service fee.
Web freebies are for the most part long gone. Two years ago, it was common for Net companies flush with cash to draw customers by dangling free or nearly free products. The cost was enormous.
Since last March, when investors began moving their money out of the technology sector, online merchants have put the brakes on giveaways.
Paytrust, whose backers include American Express, Citibank and E*Trade, has closed the PayMyBills headquarters in Pasadena, Calif., and laid off dozens of its employees, McLaughlin said.