Key Components of Developing and Managing an Authorized Agent Payment Network Utility Payment Conference

Key Components of Developing and Managing an Authorized Agent Payment Network

Utility Payment Conference

The Bill Payments Landscape

36.8% of U.S. Households are financially underserved

Source: MasterCard Worldwide July 2008

Why People Do Not Have A Checking Account

Reason PercentDo not write enough checks 28.6Do not like dealing with banks 22.6Do not have enough money 14.0Service charges are too high 10.2Cannot manage or balance a checking account 6.6Minimum balance is too high 6.5Do not need/want a checking account 5.3Credit problems 3.6No bank has convenient hours or location 0.4Other 2.1

Source: Federal Reserve Survey of Consumer Finances

Corporate GoalsCorporate Goals

Increase revenueDecrease costIncrease customer satisfactionIncrease employee satisfactionStrategic competitive positioning

Corporate Vendor ApplicationCorporate Vendor Application

Non-ContractedAuthorized

Authorized: Vendor Strengths Authorized: Vendor Strengths NeededNeeded

Leading edge technology and business model capability State-of-the-art data center Business continuity and disaster recovery program Custom Real time or batch reporting capabilities User friendly payment transaction entry application

Outstanding Service Agent services (recruit, monitor, manage) Client service (personal manager, quick turnaround) Benchmarking “Best Practices” Managed through a defined Service Level Agreement

Industry leading funds transfer application On time delivery of funds Reliability of delivery

Financial Stability (Security of Funds)

Electronic Bill Payment OverviewElectronic Bill Payment OverviewApplication SignatureApplication Signature

Electronic Bill Pay Sectors1. Software/Hardware Application2. Client Services3. Agent or Trustee Network (Free, Fee, Mixed)4. Data and Funds Transfer5. Data Accuracy/Exception Processing6. NSF, Return Item Processing and Check Truncation7. On-Line Data Lookup8. Service Level Agreement (SLA)9. Report Card and Business Review Meetings10. Management Developed Reports11. Non-Exclusive Contract


Software/Hardware Application Real time or batch – Custom designed FREE or FEE to your customers (or, mixed

network) Process cash, check, money order Scanning, Check Truncation, Image

Processing Custom receipt Agent balancing process (no late data

processing or funds transfer)


Client Services Single point of contact for IT and

Operations Develop Client protocol for daily

interface Timely response Quarterly performance and annual

business review meetings


Trustee Network FREE, FEE or mixed Custom selection criteria Recruit, train, manage, and monitor Strict credit approval Special signage Low turnover rate Rapid response to agent issues Immediate update of Agent/Trustee status Network coverage Monitoring


Data and Funds Transfer Real time from POS (provides most advantages

and eliminates or reduces ancillary cost)(resolves critical action issues/processes)

Customized timing for posting file Not dependent upon agent balancing Assures no unreported transactions

Client developed controls for major processes Data available via secure on-line website Reports to facilitate analysis and management Special Receipt Number Validation

Flow of FundsFlow of Funds

All funds guaranteed at the time a receipt is produced.All funds guaranteed at the time a receipt is produced.

Day Description

1 Payment processed Data transmitted to vendor server in real time Customized balance file produced Payment data transmitted to Client

2 Retailer deposits funds ACH initiated to transfer funds of all agents to

concentration account then to Client Internal application balances and identifies

deficiencies

3 Funds received by Client ACH deficiencies addressed by vendor


Data Accuracy/Exception Processing Check digit algorithm for “both” manual and

scanner application Real time Account Number Validation (ANV)

(eliminates un-postables) Do Not Accept Check process designed

within ANV for maximum efficiency Research and response to Client inquiries at

the time of call or within 72 hours Critical Action Payment Notification Custom download capabilities

Electronic Bill Payment OverviewElectronic Bill Payment Overview Application SignatureApplication Signature

Service Level Agreement (SLA) Developed to capture major electronic

payment processing expectations Specific performance measurements Daily/Quarterly review and management

of SLA

Checks are scanned at POS for Checks are scanned at POS for Back Office Conversion ProcessingBack Office Conversion Processing

Check ConversionCheck Conversion

Client Benefits:Client Benefits: Lower processing cost for merchants (helps Lower processing cost for merchants (helps

retain agents).retain agents). Allows for electronic processing which Allows for electronic processing which

lowers return rate.lowers return rate. Removes agent from return check Removes agent from return check

processing.processing. Allows for lower bill pay transaction fee.Allows for lower bill pay transaction fee. Expedites and facilitates processing.Expedites and facilitates processing. Virtually transparent to the customer and Virtually transparent to the customer and

more streamlined for the merchant.more streamlined for the merchant.

Checks are scanned at POS for Checks are scanned at POS for Back Office Conversion ProcessingBack Office Conversion Processing

Check ConversionCheck Conversion

Back Office Conversion vs. POP:Back Office Conversion vs. POP: BOC provides Client the flexibility to allow or disallow BOC provides Client the flexibility to allow or disallow

customers the option to opt out of check truncation.customers the option to opt out of check truncation. POP forces the merchant to decision items as eligible POP forces the merchant to decision items as eligible

for truncation. BOC allows for all items to be scanned for truncation. BOC allows for all items to be scanned and vendor decides if items are eligible based on and vendor decides if items are eligible based on NACHA rules.NACHA rules.

POP requires a customer signature authorizing POP requires a customer signature authorizing truncation. BOC requires signage indicating the truncation. BOC requires signage indicating the check will be truncated unless opted out by check will be truncated unless opted out by customer.customer.

Utilizes a change in NACHA rules for BOC introduced Utilizes a change in NACHA rules for BOC introduced in March 2007in March 2007

Check Truncation &Check Truncation & Electronic RepresentmentElectronic Representment

Processing Return Checks Returned check data is electronically

configured to re-present Electronic transaction more reliable than paper Process options allow for 1 or 2 re-

presentments

Eliminates fluctuations in NSF per item cost (sets a fixed fee)

Electronic Bill Payment OverviewElectronic Bill Payment Overview

Electronic representment provides for extremely high clearance rate

Paper checks have low clearance rates Paper can only be represented once

Representment much faster Excellent tracking and reporting

Check Truncation & Check Truncation & Electronic Re-presentmentElectronic Re-presentment


Check TruncationCheck Truncation & Electronic Re-presentment & Electronic Re-presentment

Comprehensive NSF information

Secure website Superior image display Print capability Provides information

for easy analysis


Superior on-line return item Superior on-line return item applicationapplication

Check Truncation &Check Truncation & Electronic Re-presentmentElectronic Re-presentment


SOAR lets you edit store numbers and custom data fields to improve the accuracy of your reporting and same-day Detailed Data Downloads (DDL).

Click here for more comprehensive item detail of each item.

Vendor Web ReportingVendor Web Reporting

Web site reporting to facilitate payment lookup and analysis

CUSTOMIZED TO MEET YOUR NEEDS

PAYMENT REJECTS/CANCELED

FUND TRANSFERS

RETURNED ITEMS

TRANSMISSION DATA

TRANSMISSION DATA CATEGORIZED BY GEOGRAPHY

PAYMENT ADJUSTMENT DATA

TRUSTEE PAYMENT VOLUMES BY LOCATION

ACTIVE TRUSTEE LISTS WITH BUSINESS HOURS

REPORTSREPORTS

MARKETING AWARENESS MARKETING AWARENESS PROGRAMPROGRAM

Press Release Billing Inserts Bus Shelters, Bus Backs, Metro Cable TV Novelties Bag Stuffers at Retail Stores Ethnic Festivals In-Store Signage

Meeting Corporate Meeting Corporate ObjectivesObjectives

Decrease cost Increase customer satisfaction Increase employee satisfaction Strategic Competitive

Positioning

Summary of ServicesSummary of ServicesBill Payment Services Customized to Your NeedsBill Payment Services Customized to Your Needs

Real-Time Processing Critical Action Notification Negative Check File (Do Not Accept

Check) Account Number Validation Superior Customer Services Scanning at Point of Sale Check Truncation Using BOC Agent Services Reports Electronic Processing of Check Returns Image Processing Termination for Convenience Non-Exclusive Contract

Where You SaveWhere You SaveBill Payment Services Customized to Your NeedsBill Payment Services Customized to Your Needs

Reduce customer calls Reduce customer complaints Reduce mailing and mailing errors (bills not updated

based on most recent payment) Reduce check processing cost Reduce rejected check cost (NSF) and time range for

identifying (Potential revenue stream from NSFs) Reduce special orders (non-pay disconnects, collections,

etc.) Reduce late payment charges Reduce account adjustments Reduce payment arrangement corrections Reduce drive backs to customer premise Reduce after hour reconnects Reduce charge off cost associated with compressed time

period for rejected checks

Where You SaveWhere You SaveBill Payment Services Customized to Your NeedsBill Payment Services Customized to Your Needs

Other areas of interest:• 2nd alternative to disaster recovery application

• Reduce labor cost

• Serving the under-served customer

• Reduce customer cost for paying bill (driving, public transportation cost, etc.)

• Increase employee satisfaction

• Enhanced bill payment hours (after 5:00pm, weekends, and holidays)

• Integration with other payment channels (KIOSK, Credit/Debit card pay-by-phone, internet, etc.)

Speaker Information

SpeakerWayne NorrisExecutive VP, Client DevelopmentGlobal Express Financial ServicesSilver Spring, [email protected]

Documents

Key Components of Developing and Managing an Authorized Agent Payment Network Utility Payment Conference