Thanks, everyone, for you input so far.
Let me add some more information:
Our ILS is Sirsi and we are an academic library. We would like to have this kind of service so students can pay late fees and replacement costs online. We have our system set up so as when an item becomes overdue and the fine reaches $2.10 the student gets blocked at the business office (they can't register for classes, get transcripts, yada yada yada). The business office uses a collections agency to...well...you know.
Keep your thoughts coming

Thanks!