Banking Technology in Receivables Collection Strategy Overview Trends

Banking Technology in Receivables Collection Strategy Overview

Trends in Consumer Behavior § Movement towards electronic based solutions – Decrease in paper bills/statements – Decrease in sending payments to lockboxes § Desire for consumers to have multiple ways to make payments such as – Direct debit – Web-based – Phone-based – In-person – Kiosk – Wireless § Desire to use alternative payment channels such as – ACH – Credit cards – Debit cards 2

C-2 -B Strategy Trends in Consumer Behavior 3

How to Get Ready for the Future? § Focus on electronic payments – Paper is declining, so many billers who process internally should really examine their cost structure – As paper payments continue to decline, the cost of maintaining in-house lockboxes will continue to increase – US Postal changes likely to hasten migration to electronic payments § Focus on consolidating vendors for electronic payments and standardizing the posting and financial settlement of the payments § Don’t try to build everything yourself – Use valued vendor relationships to accomplish the transition to electronic collections § Strategize how you want your collection process to look in the end prior to starting projects – Get the game plan first before running plays – This will reduce the chance of moving down paths that conflict with one another 4

C-2 -B Paper and Electronic Presentment Model Billing File(s) Print/Mail AR Customer Billing File Paper bill print and mail (To consumer) Biller branded web presentment of bill to consumer AR Master File EBPP/EIPP BANK bill payment sites web presentment of bill to consumer 5

C-2 -B Paper and Electronic Collection Model Payment Sources ACH Services & E-Lockbox ACH Direct Debit program Online bill payment transactions Walk-in payment centers AR System EBPP/EIPP BANK info systems and internet reporting 1. A single A/R posting file 2. Financial settlement for all transactions 3. Detail reporting of all payment streams for reconcilement and control Collection agencies, etc. Biller direct EBPP solution Merchant Services IVR (interactive voice response) Deliver bills to consolidation sites Mobile/SMS Lockbox services 6 Paper checks & return items

E-Lockbox Online Bill Payment Consolidation

E-Lockbox Overview and Benefits § Questions – Do payments coming to you via a computerized check from bill-payment providers require manual data entry? – Are you getting transmissions of bill payments from multiple sources such as Check. Free, Metavante, Online Resources, Western Union, IPay, etc? § What is it? – An efficient, streamlined process to collect incoming payments that have been initiated by consumers using various financial institutions, collection agencies, credit counseling agencies or walk-in payment center § Benefits – By automating the collection of these bill payments with a single transmission, you can reduce the number of check and list remittances you receive – Also, eliminates the need to manage multiple electronic transmissions from individual vendors that produce these types of payments – Gives your company the ability to perform customer service using an internet based platform for paper and electronic transactions 8

E-Lockbox Process Flow Pay Bills Consumer Internet based Client Service Module Collection and Credit Counseling Agencies, and Walk-in Payment Centers Biller 1. 2. Dollars Immediately Available Invoice Information in A/R File. Information can be combined with BANK Lockbox data file. Dollars and Consumer Payment Information Consumer’s Online Banking/Bill Payment Provider Customized Filtering/routing available 9 BANK

EBPP/EIPP Services Biller Direct Electronic Bill/Invoice Payment and Presentment

EBPP/EIPP Overview and Benefits § What is it? – A secure way to present invoices to your customers online and an electronic payment collection system that enables your customers to make timely, reliable payments in a secure, online environment § Benefits – Allows you to eliminate paper invoices, while streamlining and receiving automated payments – Secure – presentment and receipt – Can be accomplished without major investment or complex implementation (BANK developed and maintained website) 11

EBPP/EIPP Process Flow Payment Channels A/R Posting File Web (Download Or Lockbox Merge) IVR EBPP/EIPP Engine CC Settlement Instr. BANK Merchant Svc ACH File BANK ACH Ops Generate Files Call Center E-mail Notification Payment Options Billing File Loading (upload Or file transmission) 12 Next Day Settlement Biller Account @ BANK Next Day Settlement

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