Utilities Eyeing Payments Outsourcing

By Mark Brousseau

Declining check volumes and rising paper-check clearing costs are forcing more utilities to look toward third-party lockbox providers and banks for outsourced payments processing solutions. That’s according to Serena Smith, senior vice president, Remittance Processing Division, for Fidelity National Information Services (serena.smith@fnis.com).

Smith told me that the story isn’t much different in the other industries with which Fidelity National Information Services works. But utilities are finding that they need to consider outsourcing to reduce operations costs and update outdated processes and technology.

“Many of the larger utilities that we are courting are not taking advantage of an online archive, ARC, or automated exceptions modules,” Smith said. “Status quo seems to have been the case in the utility industry for many years, and partnering with a different technology vendor – if in-house – or services provider – if outsourced – is helping utilities leverage new technologies and achieve even greater efficiencies.”

The industry’s move towards electronic payments is another factor driving utilities to consider outsourcing. Smith noted that many utilities are struggling with how to effectively manage their various payments channels (including Web store fronts), and they often have standalone systems and processes for each channel. Outsourcing allows utilities to largely offload this responsibility and dramatically consolidate their systems and processes.

The bottom line: “Many utilities have a desire to remain in-house. But the increased cost of processing will force others to take a stronger look at outsourcing – something that would never have been an option for some of these organizations several years ago,” Smith said.

Has your utility changed its thinking on payments processing outsourcing? E-mail me at m_brousseau@msn.com.