Posted by Mark Brousseau
Some billers are taking more aggressive measures to get customers to pay bills electronically. Take a look at this article from The Beaumont Enterprise in Texas.
Jan. 11--Paying for cable television in Southeast Texas just got more expensive for some customers of Time Warner Cable.
That doesn't refer to just the bill for whatever level of service a customer might have. The act of paying for it by mail is what got more expensive.
Time Warner apparently wants to encourage its customers to pay their bill online, which means people need an Internet connection and have an established online banking capability.
If you don't, as of Jan. 1, your bills will cost 99 cents more to pay.
On the other hand, if you pay online, your bill would be 99 cents less.
"People are moving away from paper bills," said Gary Underwood, Time Warner spokesman. "It's a trend. It's not just our industry."
Jane Walker of Beaumont said she already pays online, but wants the paper statement every month to make certain she's not being charged more than she deserves.
"I pay my bills timely," she said. "For a company the size of Time Warner to charge people 99 cents to send a bill is horrendous."
Walker wrote a letter to The Enterprise in protest of Time Warner's new "Go Green" program, which is how the cable giant is framing the charge. The company said the initiative will reduce paper waste and help to "save the environment."
Walker isn't so certain of Time Warner's motives.
"I would ask them to explain to me why," she said. "They know there are people who can't say no. Isn't it enough to pay our bills timely? It makes me angry that they can do this. Isn't there anyone who oversees this?"
Time Warner enjoys something like an unregulated monopoly in many areas of Southeast Texas, unlike Entergy Texas and AT&T. Neither the electric company nor the telephone company charges customers to send pay by mail.
"Entergy has no plans to charge," spokeswoman Debi Derrick said. "We give our customers a choice. Any new charge would likely require Public Utility Commission approval."
AT&T spokesman Dan Feldstein said: "We do not charge customers who elect to have paper billing."
Wanda Luke of Port Neches said she's been paying her bills online for the last 18 months and she likes the convenience of it.
"It's worked out wonderful for me. Friends had a good level of comfort with online banking. I can look at the complete bill and I can even get more detail, like with my American Express bill," she said.
However, Luke said she didn't realize Time Warner would charge people 99 cents if they still wanted the paper bill in the mail.
"I'm thinking only about how much I can save," she said.
If all of Time Warner's customers in Southeast Texas -- numbering perhaps 100,000 -- paid the 99-cent charge, that's about $99,000 per month just to pay the bill.
Underwood said people also can pay at Time Warner's kiosks, 1420 Calder Ave., Beaumont; and 602 N. U.S. 69, Nederland. To avoid the 99-cent charge, a customer still needs online banking capability.
For those who might want another option, the Yellow Pages -- still available in print version in the free telephone book supplied by AT&T -- has plenty of listings under "satellite and cable TV equipment."
Showing posts with label retail lockbox. Show all posts
Showing posts with label retail lockbox. Show all posts
Thursday, January 29, 2009
From the Postmaster General's Mouth
Posted by Mark Brousseau
Below is a link to Postmaster General John E. Potter's testimony before Congress Wednesday where he asked lawmakers to lift the requirement that the agency deliver mail six days a week. This proposal could have a significant impact on remittance and lockbox processors, industry observers point out.
http://www.usps.com/communications/newsroom/testimony/2009/pr09_pmg0128.htm
What do you think? Post your comments below.
Below is a link to Postmaster General John E. Potter's testimony before Congress Wednesday where he asked lawmakers to lift the requirement that the agency deliver mail six days a week. This proposal could have a significant impact on remittance and lockbox processors, industry observers point out.
http://www.usps.com/communications/newsroom/testimony/2009/pr09_pmg0128.htm
What do you think? Post your comments below.
Tuesday, January 27, 2009
Coopetition in the Payments World
By Mark Brousseau
According to the results of the Federal Reserve’s last two Payments Studies, electronic payments have risen from 43 percent of all non-cash payments to 66 percent of such payments over the period of 2000 to 2006. Conversely, checks have gone from 67 percent to 34 percent during this same period.
The message is clear: electronic payments are replacing check payments at a very rapid rate. So, it may surprise you to learn that one of the most common questions heard by providers of electronic payment solutions is, “do you have any capabilities for handling our paper-based payments?”
Why the continued interest in paper? Larry Jones of Cash Management Solutions, Inc. (larry.jones@cashmgmt.com) says the answer is simple: Although there are literally billions of payments that have migrated to electronic methods, the majority of high dollar and business-to-business payments are still made by check. This means that paper-based payment processing continues to be of great importance to many of the financial industry’s most prized clients, their corporate customers, Jones said.
Jones believes payments service providers must maintain their paper-based capabilities as they add alternative electronic channels. And, it is a well-known fact, he adds, that there is no system so efficient that it can overcome the inefficiencies of having to run it separately from, and simultaneously with, the system it is replacing.
“Until the landscape changes to the point where electronics replace all paper-payments, billers will continue to ask for methods and technologies that can affect a seamless convergence of these two distinct payment types,” Jones predicts. “Any payments service provider who is currently offering only paper processing should definitely be looking for the ability to offer on-line, direct to biller, bill payment services to their customers in a seamlessly merged deliverable.”
Likewise, any company that makes their living providing on-line bill payment systems or services should be looking for capabilities or partners who process paper payments and provide outputs that can be merged and delivered in a similarly seamless fashion, Jones adds.
What do you think? Post your comment below.
According to the results of the Federal Reserve’s last two Payments Studies, electronic payments have risen from 43 percent of all non-cash payments to 66 percent of such payments over the period of 2000 to 2006. Conversely, checks have gone from 67 percent to 34 percent during this same period.
The message is clear: electronic payments are replacing check payments at a very rapid rate. So, it may surprise you to learn that one of the most common questions heard by providers of electronic payment solutions is, “do you have any capabilities for handling our paper-based payments?”
Why the continued interest in paper? Larry Jones of Cash Management Solutions, Inc. (larry.jones@cashmgmt.com) says the answer is simple: Although there are literally billions of payments that have migrated to electronic methods, the majority of high dollar and business-to-business payments are still made by check. This means that paper-based payment processing continues to be of great importance to many of the financial industry’s most prized clients, their corporate customers, Jones said.
Jones believes payments service providers must maintain their paper-based capabilities as they add alternative electronic channels. And, it is a well-known fact, he adds, that there is no system so efficient that it can overcome the inefficiencies of having to run it separately from, and simultaneously with, the system it is replacing.
“Until the landscape changes to the point where electronics replace all paper-payments, billers will continue to ask for methods and technologies that can affect a seamless convergence of these two distinct payment types,” Jones predicts. “Any payments service provider who is currently offering only paper processing should definitely be looking for the ability to offer on-line, direct to biller, bill payment services to their customers in a seamlessly merged deliverable.”
Likewise, any company that makes their living providing on-line bill payment systems or services should be looking for capabilities or partners who process paper payments and provide outputs that can be merged and delivered in a similarly seamless fashion, Jones adds.
What do you think? Post your comment below.
Wednesday, July 23, 2008
Remote Remittance Capture Grows
By Mark Brousseau
While some lockbox providers have been disappointed by what they see as sluggish demand for their remote remittance capture solutions, Chris Rohner (chris.rohner@fnis.com), national remittance sales at Jacksonville, Florida-based Fidelity National Information Services (FIS), says the demand and volume has met her company’s expectations. FIS has about 20 financial institutions doing some form of remote remittance capture, Rohner told me.
The thing to keep in mind, Rohner notes, is that distributed capture isn’t for every lockbox client. “It works well when the customer has remote locations with walk-in payments, and they don’t want to be bothered completing the transaction,” Rohner said. “A good example of this is tax processing, where a municipality might have a lockbox, but also accepts walk in payments. At the end of the day, they want to receive one file and one set of reports. This is ideal for distributed capture.” In addition to municipalities, Rohner said FIS is seeing strong demand for its distributed capture solution from utilities and property management firms.
And she expects interest to pick up as FIS rolls out flatbed scanning capabilities for supplemental remittance documents. Today, the company only captures checks and coupons, with MICR and OCR read technology. It also offers a remote deposit capture solution to automate check deposits to a bank, and a consumer capture solution, as well. “We do a lot of due diligence before recommending a distributed capture solution,” Rohner told me.
How would you describe demand for remote remittance capture?
Post your comment below.
While some lockbox providers have been disappointed by what they see as sluggish demand for their remote remittance capture solutions, Chris Rohner (chris.rohner@fnis.com), national remittance sales at Jacksonville, Florida-based Fidelity National Information Services (FIS), says the demand and volume has met her company’s expectations. FIS has about 20 financial institutions doing some form of remote remittance capture, Rohner told me.
The thing to keep in mind, Rohner notes, is that distributed capture isn’t for every lockbox client. “It works well when the customer has remote locations with walk-in payments, and they don’t want to be bothered completing the transaction,” Rohner said. “A good example of this is tax processing, where a municipality might have a lockbox, but also accepts walk in payments. At the end of the day, they want to receive one file and one set of reports. This is ideal for distributed capture.” In addition to municipalities, Rohner said FIS is seeing strong demand for its distributed capture solution from utilities and property management firms.
And she expects interest to pick up as FIS rolls out flatbed scanning capabilities for supplemental remittance documents. Today, the company only captures checks and coupons, with MICR and OCR read technology. It also offers a remote deposit capture solution to automate check deposits to a bank, and a consumer capture solution, as well. “We do a lot of due diligence before recommending a distributed capture solution,” Rohner told me.
How would you describe demand for remote remittance capture?
Post your comment below.
ECP Implementation Tips
By Mark Brousseau
Electronic check presentment (ECP) is becoming an increasingly important part of the lockbox services mix. With electronic clearing, billers can achieve significant benefits when processing their receivables through a lockbox, including reduced deposit fees, faster funds availability, improved collections, later deposit windows, and streamlined returns handling.
But like any other business process change, electronic clearing requires billers to consider the potential operations and customer service impact of implementing the technology, or they might find its benefits to be elusive. That’s according to Lesa Brooks, general manager, Data Capture Services, Western Region for CDS Global (lbrooks@cds-global.com). An early adopter of ECP, CDS Global electronically deposits checks to four major financial institutions on behalf of several dozen lockbox clients, Brooks recently told me.
The first consideration, Brooks said, is ensuring that the biller has the right banking partner. “Billers need to make sure that their bank is experienced with the process,” Brooks said. “Most of the larger banks have teams dedicated to implementing ECP projects. They have the process down pat, and their fees are usually much lower. But we have seen cases where clients have worked with a local bank that is unfamiliar with ECP and it has made the process more confusing. Local banks might also have higher fees since they are working a vacuum.”
And deposit fees are a key consideration, Brooks said. Billers should expect banks to pass along some of the internal cost savings they achieve from electronic clearing. “But fees for ACH conversion, on-us items, check image exchange, and substitute check printing are all over the board, so it’s a good idea to shop around. In general, ECP fees are coming down.”
Billers should also make sure that their lockbox provider is experienced with ECP, Brooks said. Billers need to determine whether their provider allows for the use of multiple banking partners; whether the lockbox provider can handle opt-outs for ACH conversion; and whether the lockbox provider can customize X9 files to allow the deposit record to be marked based on the type of deposit (Check 21, ARC, BOC). “If your lockbox provider isn’t experienced with ECP, and it doesn’t offer flexibility for managing the process, it can add a significant amount of time to development and testing, as well as higher upfront costs,” Brooks said.
Another consideration for billers is whether to use ACH conversion or just Check 21. Depending on the biller’s business, it can be a no-brainer (utilities) or more complicated (non-profits), Brooks said. Once the biller determines it will use ACH conversion, it must consider how to handle customer notification for ARC conversion. Billers must think through what to say (and get the necessary approvals), where to put it, and whether to include a toll-free number for opt-outs. They must also leave time for printing. “Finding the space in customer mailings to put ARC notifications has been the biggest implementation delay, hands down,” Brooks said. Since this notification needs to be made 30 days prior to going live, Brooks said this task should be near the top of a biller’s implementation project list.
Similarly, billers must plan to educate their customer support staff on ECP. “Consumers still have questions about whether their check was cashed,” Brooks said, noting that checks presented via ACH look different on a consumer’s bank statement. “This is an especially big issue for non-profits and direct mail companies.” Customer service reps must understand that converted items might appear in a different location on a consumer’s statement. “We’ve chased our tails researching whether an item was processed, only to discover that the consumer was not looking in the right place on their statement,” she said. As part of their customer service planning, billers should also think through returned item handling.
Have any tips for implementing ECP at the lockbox?
Post your tips below.
Electronic check presentment (ECP) is becoming an increasingly important part of the lockbox services mix. With electronic clearing, billers can achieve significant benefits when processing their receivables through a lockbox, including reduced deposit fees, faster funds availability, improved collections, later deposit windows, and streamlined returns handling.
But like any other business process change, electronic clearing requires billers to consider the potential operations and customer service impact of implementing the technology, or they might find its benefits to be elusive. That’s according to Lesa Brooks, general manager, Data Capture Services, Western Region for CDS Global (lbrooks@cds-global.com). An early adopter of ECP, CDS Global electronically deposits checks to four major financial institutions on behalf of several dozen lockbox clients, Brooks recently told me.
The first consideration, Brooks said, is ensuring that the biller has the right banking partner. “Billers need to make sure that their bank is experienced with the process,” Brooks said. “Most of the larger banks have teams dedicated to implementing ECP projects. They have the process down pat, and their fees are usually much lower. But we have seen cases where clients have worked with a local bank that is unfamiliar with ECP and it has made the process more confusing. Local banks might also have higher fees since they are working a vacuum.”
And deposit fees are a key consideration, Brooks said. Billers should expect banks to pass along some of the internal cost savings they achieve from electronic clearing. “But fees for ACH conversion, on-us items, check image exchange, and substitute check printing are all over the board, so it’s a good idea to shop around. In general, ECP fees are coming down.”
Billers should also make sure that their lockbox provider is experienced with ECP, Brooks said. Billers need to determine whether their provider allows for the use of multiple banking partners; whether the lockbox provider can handle opt-outs for ACH conversion; and whether the lockbox provider can customize X9 files to allow the deposit record to be marked based on the type of deposit (Check 21, ARC, BOC). “If your lockbox provider isn’t experienced with ECP, and it doesn’t offer flexibility for managing the process, it can add a significant amount of time to development and testing, as well as higher upfront costs,” Brooks said.
Another consideration for billers is whether to use ACH conversion or just Check 21. Depending on the biller’s business, it can be a no-brainer (utilities) or more complicated (non-profits), Brooks said. Once the biller determines it will use ACH conversion, it must consider how to handle customer notification for ARC conversion. Billers must think through what to say (and get the necessary approvals), where to put it, and whether to include a toll-free number for opt-outs. They must also leave time for printing. “Finding the space in customer mailings to put ARC notifications has been the biggest implementation delay, hands down,” Brooks said. Since this notification needs to be made 30 days prior to going live, Brooks said this task should be near the top of a biller’s implementation project list.
Similarly, billers must plan to educate their customer support staff on ECP. “Consumers still have questions about whether their check was cashed,” Brooks said, noting that checks presented via ACH look different on a consumer’s bank statement. “This is an especially big issue for non-profits and direct mail companies.” Customer service reps must understand that converted items might appear in a different location on a consumer’s statement. “We’ve chased our tails researching whether an item was processed, only to discover that the consumer was not looking in the right place on their statement,” she said. As part of their customer service planning, billers should also think through returned item handling.
Have any tips for implementing ECP at the lockbox?
Post your tips below.
Friday, May 2, 2008
Regulus Sale Just The Start?
By Mark Brousseau
The sale of Regulus Group LLC earlier this week to 3i Infotech, a global information technology company (see TAWPI Top Stories), could be the start of a wave of consolidation among lockbox providers.
Regulus is the largest independent remittance provider and one of the leading providers of document processing services in the United States – addressing the full document lifecycle from print and electronic bill presentment to remittance. Under the terms of agreement, 3i Infotech has proposed to acquire 100 percent of Regulus, including the company’s products, trademarks and product brands.
John Mintzer, vice president at Citizens Bank, expects more consolidation among lockbox providers, some of it simply as a result of mergers and acquisitions among regional banks.
But the real driving factor, in Mintzer’s view, is the declining number of consumer checks. “The ability for lockbox processors to meet their fixed costs gets increasingly difficult as check volumes decline,” Mintzer told me. “The single biggest challenge that lockbox processors face is the cost of labor, including benefits. This is a significant expense, and one that harder and harder to cover as customers require more exceptions-type processing.”
Serena Smith, senior vice president, Fidelity National Information Services, agrees with Mintzer. “All of us our facing economic pressures as volumes decline,” Smith told me, adding that consolidation among lockbox providers will be biggest story in the market over the next 12 months. “Providers will need an aggressive approach to the market, which means expanding their product offerings or exiting the business altogether. Providers who have not embraced a complete payments offering will miss the boat.”
Smith said that many in-house processors already are looking to outsource, to find the best mix of price, quality and functionality. “Processors have to be creative to differentiate themselves on something other than price,” she noted.
Mintzer believes that survivors of the coming lockbox market shakeout will need to have significant automation that makes their operations less dependent on heads-down labor. “Surviving processors also will require the ability to combine inputs of information received from multiple sources into one concise file or report, essentially providing the customer with an information dashboard.”
Smith said survivors would need to demonstrate robust product offerings, a commitment to the business, sustainable market share, and ready capital for investment.
With consolidation on the horizon, the obvious question is why companies like 3i Infotech are entering the lockbox space. Smith said the trend of in-house processors outsourcing their volume is very compelling, and can offer successful providers a large amount of volume.
But Mintzer warns that the financials don’t seem to support new entrants: “The significant investment in plant and equipment is extremely hard to make up in this ‘penny’ business, and this is before factoring costs associated with disaster recovery.”
Do foresee more consolidation in the lockbox market? Post your comments below.
The sale of Regulus Group LLC earlier this week to 3i Infotech, a global information technology company (see TAWPI Top Stories), could be the start of a wave of consolidation among lockbox providers.
Regulus is the largest independent remittance provider and one of the leading providers of document processing services in the United States – addressing the full document lifecycle from print and electronic bill presentment to remittance. Under the terms of agreement, 3i Infotech has proposed to acquire 100 percent of Regulus, including the company’s products, trademarks and product brands.
John Mintzer, vice president at Citizens Bank, expects more consolidation among lockbox providers, some of it simply as a result of mergers and acquisitions among regional banks.
But the real driving factor, in Mintzer’s view, is the declining number of consumer checks. “The ability for lockbox processors to meet their fixed costs gets increasingly difficult as check volumes decline,” Mintzer told me. “The single biggest challenge that lockbox processors face is the cost of labor, including benefits. This is a significant expense, and one that harder and harder to cover as customers require more exceptions-type processing.”
Serena Smith, senior vice president, Fidelity National Information Services, agrees with Mintzer. “All of us our facing economic pressures as volumes decline,” Smith told me, adding that consolidation among lockbox providers will be biggest story in the market over the next 12 months. “Providers will need an aggressive approach to the market, which means expanding their product offerings or exiting the business altogether. Providers who have not embraced a complete payments offering will miss the boat.”
Smith said that many in-house processors already are looking to outsource, to find the best mix of price, quality and functionality. “Processors have to be creative to differentiate themselves on something other than price,” she noted.
Mintzer believes that survivors of the coming lockbox market shakeout will need to have significant automation that makes their operations less dependent on heads-down labor. “Surviving processors also will require the ability to combine inputs of information received from multiple sources into one concise file or report, essentially providing the customer with an information dashboard.”
Smith said survivors would need to demonstrate robust product offerings, a commitment to the business, sustainable market share, and ready capital for investment.
With consolidation on the horizon, the obvious question is why companies like 3i Infotech are entering the lockbox space. Smith said the trend of in-house processors outsourcing their volume is very compelling, and can offer successful providers a large amount of volume.
But Mintzer warns that the financials don’t seem to support new entrants: “The significant investment in plant and equipment is extremely hard to make up in this ‘penny’ business, and this is before factoring costs associated with disaster recovery.”
Do foresee more consolidation in the lockbox market? Post your comments below.
Wednesday, April 2, 2008
The Economy And Lockbox Demand
By Mark Brousseau
The recent economic volatility has got many people wondering whether lockbox providers are seeing a change in demand. To find out, I asked three lockbox industry veterans.
John Mintzer (john.d.mintzer@citizensbank.com), vice president at Citizens Bank, said interest in outsourced remittance processing continues to be steady even during the most recent economic volatility.
“Remittance processing is similar to the gaming industry in that the demand for remittance services doesn’t necessarily retrench or diminish during difficult economic times,” Mintzer explained. “However, the comparison stops there. While the client of the casino takes on more risk in the pursuit of wealth – capital – the remittance processing client is looking to reduce risk in the pursuit of protecting its capital.”
Customers with in-house lockboxes continue to evaluate whether it makes more sense to outsource, Mintzer told me. “There is significant appeal to outsourcing, because it simplifies the budgeting process by boiling the expense down to a per item basis. This eliminates the need to worry about changing labor costs, software and hardware upgrades, and the significant expense associated with business continuity.”
Steven Nugent (steven.nugent@firstdata.com), director, product management, at First Data Corp. doesn’t believe that economic factors have influenced the market’s interest in outsourcing as much as the ever-increasing unit cost per item due to electronic migration. “Companies have historically measured the value proposition of an outsourced lockbox against internal pressure to achieve margin goals,” Nugent told me. “It would surprise me if most in-house processors weren’t contemplating outsourcing prior to the latest economic downturn.”
Ron Victor (ronald.j.victorjr@jpmchase.com), vice president, Receivables Product Management for JPMorgan Chase, said his bank is seeing a decline in B2B check volumes of approximately 4 percent in the first quarter. “In my opinion, the key factors are the economic downturn, remote capture adoption [which flows into a separate P&L at JPMC] and electronic payment adoption.”
Victor added that the economic downturn certainly places a greater focus on intra-day collaboration (exceptions repair, data augmentation, invoice matching), straight-through processing, and remote deposit capture. “One key thing we have found is that the on-line user experience and ease of browser use are important to customer satisfaction,” he said.
Nugent also sees a stronger focus among billers on working capital management. “Value-added services designed to decrease time-in-process, such as intra-day exceptions processing and remote payment capture, take center stage in almost every conversation we have,” Nugent said. “Many of the payments processed through these channels carry a disproportionately higher dollar average. Image cash letter has become a standard for accelerating the back end.”
Mintzer, who will be a panelist with Nugent and Victor at TAWPI’s Payments in Transition conference this month in Las Vegas, added that his bank’s existing remittance customers continue to focus on line item processing charges. Some wholesale lockbox customers, as an example, are evaluating whether they can transition to retail lockbox services to reduce per item costs. “In some cases, this can work,” Mintzer said. “But there are many factors that need to be considered, including the return rate of the remittance coupon and the ability of the customer to absorb the upfront programming charges,” he explained.
What are you seeing? Post your comments.
The recent economic volatility has got many people wondering whether lockbox providers are seeing a change in demand. To find out, I asked three lockbox industry veterans.
John Mintzer (john.d.mintzer@citizensbank.com), vice president at Citizens Bank, said interest in outsourced remittance processing continues to be steady even during the most recent economic volatility.
“Remittance processing is similar to the gaming industry in that the demand for remittance services doesn’t necessarily retrench or diminish during difficult economic times,” Mintzer explained. “However, the comparison stops there. While the client of the casino takes on more risk in the pursuit of wealth – capital – the remittance processing client is looking to reduce risk in the pursuit of protecting its capital.”
Customers with in-house lockboxes continue to evaluate whether it makes more sense to outsource, Mintzer told me. “There is significant appeal to outsourcing, because it simplifies the budgeting process by boiling the expense down to a per item basis. This eliminates the need to worry about changing labor costs, software and hardware upgrades, and the significant expense associated with business continuity.”
Steven Nugent (steven.nugent@firstdata.com), director, product management, at First Data Corp. doesn’t believe that economic factors have influenced the market’s interest in outsourcing as much as the ever-increasing unit cost per item due to electronic migration. “Companies have historically measured the value proposition of an outsourced lockbox against internal pressure to achieve margin goals,” Nugent told me. “It would surprise me if most in-house processors weren’t contemplating outsourcing prior to the latest economic downturn.”
Ron Victor (ronald.j.victorjr@jpmchase.com), vice president, Receivables Product Management for JPMorgan Chase, said his bank is seeing a decline in B2B check volumes of approximately 4 percent in the first quarter. “In my opinion, the key factors are the economic downturn, remote capture adoption [which flows into a separate P&L at JPMC] and electronic payment adoption.”
Victor added that the economic downturn certainly places a greater focus on intra-day collaboration (exceptions repair, data augmentation, invoice matching), straight-through processing, and remote deposit capture. “One key thing we have found is that the on-line user experience and ease of browser use are important to customer satisfaction,” he said.
Nugent also sees a stronger focus among billers on working capital management. “Value-added services designed to decrease time-in-process, such as intra-day exceptions processing and remote payment capture, take center stage in almost every conversation we have,” Nugent said. “Many of the payments processed through these channels carry a disproportionately higher dollar average. Image cash letter has become a standard for accelerating the back end.”
Mintzer, who will be a panelist with Nugent and Victor at TAWPI’s Payments in Transition conference this month in Las Vegas, added that his bank’s existing remittance customers continue to focus on line item processing charges. Some wholesale lockbox customers, as an example, are evaluating whether they can transition to retail lockbox services to reduce per item costs. “In some cases, this can work,” Mintzer said. “But there are many factors that need to be considered, including the return rate of the remittance coupon and the ability of the customer to absorb the upfront programming charges,” he explained.
What are you seeing? Post your comments.
Tuesday, April 1, 2008
Managing Lockbox Relationships
By Mark Brousseau
Developing a strong working relationship with your lockbox provider is critical to the success of any payments outsourcing initiative, says Craig Bjork (cbjork@cds-global.com), director, account & business development, Data Capture Services, at CDS Global.
As a first step, Bjork recommends that billers make sure that their business rules are well documented and clearly understood by their lockbox provider. To be sure everyone is on the same page, ask the lockbox provider to share a copy with you. Review these business rules with your provider to understand why things are done a particular way, and what benefits they provide. If you hear, “I’m not sure,” or “We’ve always done things this way,” you’ve probably found a process that needs changing. “But don’t concern yourself too much with how the work gets done,” Bjork warns. “It is the results that you should worry about.”
Similarly, billers should make sure that their contract or service agreement is specific, and that they understand all of the billing points and how volumes are derived, Bjork explained.
In addition, whenever billers change their forms or remittance documents, they should give their lockbox provider an opportunity to adequately review and test them, Bjork said. “And listen to your lockbox provider’s comments and recommendations,” he said. “Documents that create issues in lockbox processing can also create exceptions and posting delays.”
Bjork noted that lockbox providers may want ‘perfect world’ scenarios, but this might not work for the biller. “Work with your lockbox provider to find the best solution for both parties,” Bjork said. “Everyone’s goal should be the same: timely and accurate processing.”
Bjork also recommends that billers visit their lockbox provider’s facility, to build personal relationships with the people servicing their accounts, and to see firsthand how their work will be processed. And know the chain of command for your provider. You also want to get at least two alternate contacts so you have options if your primary contact is unavailable.
Any strategies you would like to share? E-mail me at m_brousseau@msn.com.
Developing a strong working relationship with your lockbox provider is critical to the success of any payments outsourcing initiative, says Craig Bjork (cbjork@cds-global.com), director, account & business development, Data Capture Services, at CDS Global.
As a first step, Bjork recommends that billers make sure that their business rules are well documented and clearly understood by their lockbox provider. To be sure everyone is on the same page, ask the lockbox provider to share a copy with you. Review these business rules with your provider to understand why things are done a particular way, and what benefits they provide. If you hear, “I’m not sure,” or “We’ve always done things this way,” you’ve probably found a process that needs changing. “But don’t concern yourself too much with how the work gets done,” Bjork warns. “It is the results that you should worry about.”
Similarly, billers should make sure that their contract or service agreement is specific, and that they understand all of the billing points and how volumes are derived, Bjork explained.
In addition, whenever billers change their forms or remittance documents, they should give their lockbox provider an opportunity to adequately review and test them, Bjork said. “And listen to your lockbox provider’s comments and recommendations,” he said. “Documents that create issues in lockbox processing can also create exceptions and posting delays.”
Bjork noted that lockbox providers may want ‘perfect world’ scenarios, but this might not work for the biller. “Work with your lockbox provider to find the best solution for both parties,” Bjork said. “Everyone’s goal should be the same: timely and accurate processing.”
Bjork also recommends that billers visit their lockbox provider’s facility, to build personal relationships with the people servicing their accounts, and to see firsthand how their work will be processed. And know the chain of command for your provider. You also want to get at least two alternate contacts so you have options if your primary contact is unavailable.
Any strategies you would like to share? E-mail me at m_brousseau@msn.com.
Tuesday, March 25, 2008
Small Banks Seek Lockbox Solutions
By Mark Brousseau
Demand from community and mid-sized banks for image-based lockbox solutions is on the upswing, says Bob Pangrac (rpangrac@creditron.com), national account manager for bank lockbox providers at Creditron. The reason? Smaller banks are looking to defend their commercial account base from large “national banks,” which Pangrac says are now showing up in regional and small markets with cash management services such as wholesale and retail lockbox processing.
“Previously, the cost of an image-based payments solution was cost-prohibitive for a smaller financial institution,” Pangrac told me. “With the introduction of Microsoft-based solutions, smaller banks can now afford a solution that will provide new revenue streams for the bank.”
But why not outsource?
One reason is that banks can keep more of the revenue from their lockbox services, Pangrac said. Another factor is that in-house systems offer better cost-controls than outsourced providers. Finally, in-house systems allow banks to clear exceptions “as they happen” or at the end of the day, rather than waiting for them to arrive from the outsource provider. “With an in-house system, exceptions can be handled the same processing day, benefiting the bank and the bank’s customer – retail or commercial – alike,” he explained.
As an example, Pangrac recounts the story of a $250 million bank that sensed that they were experiencing holdover with their lockbox provider. “By bringing their lockbox processing in-house, they seldom have holdover, which translates into more efficient customer service, deposit management, and cash management. The bank can also handle their ‘on-us’ accounts, such as the bank-branded Visa card, and their home and car loans,” Pangrac said.
So what functions are smaller banks looking for in image-based lockbox systems? Pangrac said ease of use tops the list, followed by ease of account setup, an R&D path for electronic payments, and the ability for customers to research items and receive invoices via the Web.
Are you a small bank that has successfully deployed an image-based lockbox solution? E-mail me at m_brousseau@msn.com.
Demand from community and mid-sized banks for image-based lockbox solutions is on the upswing, says Bob Pangrac (rpangrac@creditron.com), national account manager for bank lockbox providers at Creditron. The reason? Smaller banks are looking to defend their commercial account base from large “national banks,” which Pangrac says are now showing up in regional and small markets with cash management services such as wholesale and retail lockbox processing.
“Previously, the cost of an image-based payments solution was cost-prohibitive for a smaller financial institution,” Pangrac told me. “With the introduction of Microsoft-based solutions, smaller banks can now afford a solution that will provide new revenue streams for the bank.”
But why not outsource?
One reason is that banks can keep more of the revenue from their lockbox services, Pangrac said. Another factor is that in-house systems offer better cost-controls than outsourced providers. Finally, in-house systems allow banks to clear exceptions “as they happen” or at the end of the day, rather than waiting for them to arrive from the outsource provider. “With an in-house system, exceptions can be handled the same processing day, benefiting the bank and the bank’s customer – retail or commercial – alike,” he explained.
As an example, Pangrac recounts the story of a $250 million bank that sensed that they were experiencing holdover with their lockbox provider. “By bringing their lockbox processing in-house, they seldom have holdover, which translates into more efficient customer service, deposit management, and cash management. The bank can also handle their ‘on-us’ accounts, such as the bank-branded Visa card, and their home and car loans,” Pangrac said.
So what functions are smaller banks looking for in image-based lockbox systems? Pangrac said ease of use tops the list, followed by ease of account setup, an R&D path for electronic payments, and the ability for customers to research items and receive invoices via the Web.
Are you a small bank that has successfully deployed an image-based lockbox solution? E-mail me at m_brousseau@msn.com.
Wednesday, November 28, 2007
Taking Some of the Pain Out of Lockbox Conversions
By Mark Brousseau
To be sure, transitioning to a lockbox provider from an in-house payments processing environment can be a stressful process with lots of hurdles along the way. But taking time early on in the process to evaluate your legacy systems and true business requirements can keep your conversion from getting tripped up, says Craig Bjork (cbjork@cds-global.com), director, account and business development, Data Capture Services, for CDS Global, a subsidiary of The Hearst Corporation. Bjork provided me with the following tips for corporate billers looking to streamline the conversion to a lockbox provider:
… Evaluate your billing systems capabilities. “A good lockbox provider will want to limit the number of exceptions clients receive by working through all of the transactions a client’s billing system can handle,” Bjork said. “This goes beyond payments to things like change of address requests and requests for information. Knowing what your billing system can handle means you can offload this work to the lockbox provider, freeing your internal staff.”
… Clearly define business rules and expectations, early on. “Moving to a lockbox provider is a good time to evaluate business processes and the value they provide,” Bjork said.
… Don’t get too hung up on the mechanics of how your lockbox provider will process your work (the models of machines, version of software, etc.). The corporate biller’s primary concern should be whether the work is getting done correctly and on time, Bjork explains. In this vein, also be sure to regularly monitor the work being done on your behalf: ask for measurements and appropriate reports (be sure to read them!), and make periodic visits.
… Outline critical times for file and information delivery. But make sure that these times correspond to key deadlines, such as billing cut-offs or customer service postings. Don’t set delivery times solely based on convenience or the way things have been done in the past.
… Assign one individual on your transition team to handle communications and deliverables handoffs. While your transition team should include a cross-section of project stakeholders, having a single point of contact helps ensure timely and accurate project status updates.
… Trust your selected service provider, and let go. “This is why it’s so important that you choose a lockbox provider that is as concerned about your customers as you are,” he said.
Any strategies that your organization found useful? E-mail me at m_brousseau@msn.com.
To be sure, transitioning to a lockbox provider from an in-house payments processing environment can be a stressful process with lots of hurdles along the way. But taking time early on in the process to evaluate your legacy systems and true business requirements can keep your conversion from getting tripped up, says Craig Bjork (cbjork@cds-global.com), director, account and business development, Data Capture Services, for CDS Global, a subsidiary of The Hearst Corporation. Bjork provided me with the following tips for corporate billers looking to streamline the conversion to a lockbox provider:
… Evaluate your billing systems capabilities. “A good lockbox provider will want to limit the number of exceptions clients receive by working through all of the transactions a client’s billing system can handle,” Bjork said. “This goes beyond payments to things like change of address requests and requests for information. Knowing what your billing system can handle means you can offload this work to the lockbox provider, freeing your internal staff.”
… Clearly define business rules and expectations, early on. “Moving to a lockbox provider is a good time to evaluate business processes and the value they provide,” Bjork said.
… Don’t get too hung up on the mechanics of how your lockbox provider will process your work (the models of machines, version of software, etc.). The corporate biller’s primary concern should be whether the work is getting done correctly and on time, Bjork explains. In this vein, also be sure to regularly monitor the work being done on your behalf: ask for measurements and appropriate reports (be sure to read them!), and make periodic visits.
… Outline critical times for file and information delivery. But make sure that these times correspond to key deadlines, such as billing cut-offs or customer service postings. Don’t set delivery times solely based on convenience or the way things have been done in the past.
… Assign one individual on your transition team to handle communications and deliverables handoffs. While your transition team should include a cross-section of project stakeholders, having a single point of contact helps ensure timely and accurate project status updates.
… Trust your selected service provider, and let go. “This is why it’s so important that you choose a lockbox provider that is as concerned about your customers as you are,” he said.
Any strategies that your organization found useful? E-mail me at m_brousseau@msn.com.
Sunday, October 7, 2007
Benchmarking Blues
By Mark Brousseau
In a column in the October 15th issue of FORBES, Publisher Rich Karlgaard notes that a flaw common to business and rampant in government is the failure to benchmark. In sports, performance and relative performance are laid bare for anyone to see. But in business, the instincts are to shut our eyes to benchmarking, Karlgaard wrote. “We don’t want to see,” he claimed. Karlgaard’s recommendation is to start the benchmarking process with three questions:
... What does our competition do better than we do?
... Are our shortcomings rooted in our personnel, our system or something else?
... Which companies that are not competitors now could step in and eat our lunch tomorrow if they wanted to?
As another benchmarking tool, TAWPI just launched a survey to track error rates in remittance and retail lockbox operations. The results will be available by year’s end. Want to learn more? E-mail me at m_brousseau@msn.com.
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