U S General Services Administration Strategic Payment Solutions

U. S. General Services Administration Strategic Payment Solutions GSA Smart. Pay Training Forum August 4 -6, 2020 presented by Joline Mc. Donald

Course Outline • Taking a Strategic Approach to Payments • Strategic Payments Solutions in GSA Smart. Pay 3 – Card-Not-Present Solutions – GSA Smart. Pay® Travel Tax Advantage – e. Payables • Next Steps? 2

Taking a Strategic Approach to Payments • Consider your agency’s needs – Are there situations where a physical card cannot be used? – Are my agency's payment solutions being used effectively and efficiently? – Do we use a GSA Smart. Pay payment solution for qualifying contract payments? – Do we use a GSA Smart. Pay payment solution for recurring payments (e. g. utilities, subscriptions) Smart Tip – Are we interested in increased refunds? Develop a payments strategy with a defined goal. Think convenience check reduction or improved efficiency! 3

Taking a Strategic Approach to Payments • Consider industry trends – Increased desire for personalized experiences and on-demand access to payment and account information – Contactless and Mobile Payments – Biometrics no longer “a thing of the future”! • Authentication using fingerprints, faces, voices, hands, iris’ etc. • Being used now as security features upon initiation of payment in apps such as Apple Pay, Samsung Pay, Android Pay 4

Strategic Payments Solutions in GSA Smart. Pay 3 • Card-Not-Present Solutions – Ghost Cards – Declining Balance Cards – Single Use Accounts – Mobile Payments • GSA Smart. Pay® Travel Tax Advantage Card • e. Payables 5

Card-Not-Present Solutions • A card-not-present solution is a mechanism to complete a transaction without having a physical card in place • GSA Smart. Pay 3 card-not-present strategic solutions – Ghost Cards – Declining Balance Cards – Single-Use Accounts Smart Tip – Mobile Payments Combat fraud with the benefit of one time use account numbers provided by card-not-present solutions! 6

Card-Not-Present Solutions: Ghost Card • A Ghost Card is a charge card number that is specific to an agency/organization or an entity within an agency/organization. Purchases made are charged back to the agency/organization or the entity the charge card number was issued to – Tier 1 offering in the GSA Smart. Pay 3 – Available for all business lines – A Centrally Billed Account (CBA) designated for a specific frequently used supplier – Typically managed at a central location within an agency 7

Card-Not-Present Solutions: Ghost Card • Key Benefits of this solution for the agency: – Improved operational efficiencies – Reduced administrative costs – Earn additional refunds Smart Tip Think Card-Not-Present Solutions for recurring payments such as Contract Payments, Rent, & Utilities 8

Card-Not-Present Solutions: Ghost Card • Department of State Payment Card Program – Ghost card used for recurring supplies and services such as small package shipments, services, domestic and overseas utilities, and telecommunications – Account limited to single identified vendor (e. g. Fed. Ex) • Key benefits include: – Significant reduction in number of invoice payments processed – Reduction in interest penalties and costs – Consolidation of individual charges – Improved oversight using online tools 9

Card-Not-Present Solutions: Declining Balance • Declining Balance Cards function similarly to traditional charge cards, however limits do not refresh each month. These cards can be applied for a specific purpose for a specific period of time, as identified by the agency/organization. Credit limits can either be set as needed or the card becomes inactive once the balance is used – This is a Tier 1 offering in GSA Smart. Pay 3 – Available for Purchase, Travel, and Integrated business lines 10

Card-Not-Present Solutions: Declining Balance • Declining Balance Cards can be used for recurring payments – Use a Declining Balance Card for recurring payments with limitations on a monthly or quarterly basis, such as transportation subsidies • Key Benefits of this solution for the agency: – Improved operational efficiencies – Reduced administrative costs – Earn additional refunds 11

Card-Not-Present Solutions: Declining Balance • United States Postal Service (USPS) Uniform Allowance Program – Pilot program under SP 3 for USPS employees to purchase uniforms utilized on the job – Account limits set according to USPS policy for each card and card refreshes annually (based on employee’s anniversary date) • Key benefits include: – No more need for contract outside of SP 3 which saves management fees – Ability to utilize further oversight and audit tools to increase transparency and controls 12

Card-Not-Present Solutions: SUA • A Single-Use Account (SUA) is an electronic, charge card-based payment solution that leverages a single 16 -digit virtual account number for each payment. The limit on each account is set to the specific payment amount determined by the agency – This is a Tier 1 offering in GSA Smart. Pay 3 – Available for all business lines • SUAs can be set to a specific supplier, date range and payment amount 13

Card-Not-Present Solutions: SUA • Key Benefits of this solution for the agency: – Better spend control through MCC Blocks and spend limits – Better tracking of payments – Increased payment security – Increased card program spend – Reduction in erroneous payments Smart Tip SUAs act like a check. Consider these as replacement for convenience checks and to make contract payments! 14

Card-Not-Present Solutions: SUA • SUA can be used for Temporary employees – Example 1: Do. D sends new personnel to boot camp where trainees are provided a voucher to cover expenses during the training time period. Instead of a voucher, trainees could be provided with Single Use Accounts to cover those expenses – Example 2: Temporary employees for the census. (BLS) – Example 3: Temporary employees for emergencies such as natural disaster assistance. (FEMA) 15

Card-Not-Present Solutions: Mobile Payments • Mobile Payments give the ability to make payments via mobile device at the point-of-sale – This is a Tier 1 offering in GSA Smart. Pay 3 – Available for all business lines • Card account information is loaded into a mobile wallet app on the account holder’s mobile device. The account holder can then use the device to make in-store purchases where accepted by merchants Smart Tip Agency-specific policies for mobile payments should be outlined in agency policy documents or memorandums. 16

Card-Not-Present Solutions: Mobile Payments Commercial uses for Mobile Payments • Mobile payments in our everyday lives – Payments at point of sale vendors (e. g. grocery stores, coffee shops, restaurants) – Over 1 Billion people worldwide are expected tomake mobile payments in 2020 How can I use mobile payments in my agency? • Travel Expenses such as dining out on official travel, paying for transportation (e. g. Uber, Taxis), e. Tickets for airlines • Onsite purchasing at the point of sale. This could be especially beneficial during emergencies 17

Card-Not-Present Solutions: Mobile Payments Multiple agencies are currently exploring the use of mobile payments under their task orders • Mobile payments will allow for flexibility during employee travel • Mobile payments will allow for purchases at the point of sale without carrying the physical card out of the office location • Agencies implementing for use with both work and personal devices (depending on agency policy) • 18

Card-Not-Present Solutions: Leveraging • Ways to leverage Card-Not-Present Solutions – Ghost Cards, SUAs and Declining Balances cards can be used for recurring payments, such contract payments, rent and utilities – Travel Programs with infrequent traveler or international travel can use Ghost Cards, SUA or Declining Balance Cards. • SUA used for hotel payment reduces processing time • Declining Balance Card to cover cost for infrequent traveler • Declining Balance Card foreign nationals instead of cash for expenses 19

GSA Smart. Pay® Travel Tax Advantage • GSA Smart. Pay Tax Advantage Travel Card Accounts provide a means for agencies to obtain tax exemption at the point of sale for rental cars and lodging – This is a Tier 1 offering under GSA Smart. Pay 3 – Available for the travel business line only – Agencies/Organizations not eligible to receive IBAs are not eligible for Tax Advantage Travel Card Accounts 20

GSA Smart. Pay® Travel Tax Advantage • The GSA Smart. Pay Tax Advantage Travel Card Account is: – Established as a Centrally Billed Account (CBA), – Issued to an individual designated by the agency / organization in the individual’s name, – Established using IBA procedures, to include credit checks or other creditworthiness assessments • Agency / Organization Program Coordinators (A/OPCs) work with their Contractor Bank to identify Merchant Category Codes (MCCs) for rental cars and lodging to be excluded from taxes 21

GSA Smart. Pay® Travel Tax Advantage • The GSA Smart. Pay Travel Tax Advantage account has a unique design and a unique set of BINs for vendor recognition • There are no additional or different reporting requirements – Agencies/organizations can request additional reports related to this type of account in their task order requirements • Invoicing is split between the IBA and CBA charges – Individual card holders receive a statement of account for IBA charges – Agency/organization receives an invoice for CBA charges (lodging and rental car) 22

GSA Smart. Pay® Travel Tax Advantage Department of Interior (Do. I) Travel Tax Advantage Accounts – Implemented as a follow on to the Do. I integrated card utilized under GSA Smart. Pay 2 program – Worked on implementation with Contractor bank starting in March 2018 – Transactions for certain MCCs automatically divert to CBA Account with additional flexibilities to request IBA/CBA transaction reversals • Key Benefits Include: – Ability to avoid paying taxes on hotel and rental car purchases – IBA and CBA billing separated by transactions for payments • 23

e. Payables • e. Payables are solutions that augment or replace the accounts payables process such that electronic transactions take place directly between the Government and the supplier. e. Payables solutions are typically used with merchants who are traditionally paid by check or EFT or merchants who do not accept charge card payments (e. g. , utility companies) • Examples: Straight-through processing, buyer-initiated payments, supplier-initiated payments, procure to pay, and other card not present solutions Smart Tip e. Payables do not include virtual cards or other products/services presently defined under business lines. 24

e. Payables: Supplier-Initiated Payments • Supplier-Initiated Payment (SIP) is the process of electronically connecting suppliers (or other merchants) to the government’s payment systems – This is a Tier 1 offering under GSA Smart. Pay 3 – Available for all business lines 25

e. Payables: Supplier-Initiated Payments • Supplier-Initiated Payment process flow 26

e. Payables: Supplier-Initiated Payments • Supplier-Initiated Payments are a great payment option for payments to retail operations – Recurring payments such as monthly subscription services • Make regular payments to the same merchant • Agency/organization and GSA Smart. Pay 3 bank work together to enroll the merchant and establish a direct payment relationship • Example: Monthly subscription to receive industry data for research. Once enrolled, the agency/organization is invoiced and payments are made to the vendor through the EAS on the same date every month 27

e. Payables: Buyer-Initiated Payments • Buyer-Initiated Payment (BIP) is a type of transaction that requires no action by the supplier, no point-of-sale terminals or other hardware/software required to receive payment – This is a Tier 2 offering under GSA Smart. Pay 3 – Available for all business lines 28

e. Payables: Buyer-Initiated Payments • Buyer-Initiated Payment flow 29

e. Payables: Buyer-Initiated Payments • Buyer-initiated payments are a great option for specialized or complex invoicing processes – Useful for agencies/organizations dealing with large vendors at large dollar values • Streamline and control timing of payments to vendor • Vendor must enroll to establish direct payment relationship • Example: Ongoing purchases of lab supplies and equipment under an existing contract. Orders and payments all go through the EAS, removing the need for a new financial document for each order 30

e. Payables: Straight-through Processing • Straight-through Processing (STP) is an automated payment transaction processing service where the purchasing organization sends the payment file directly to the Contractor’s acquiring institution. The networks process the payment automatically on behalf of the Contractor and deposit the funds directly into the Contractor’s bank account – This is a Tier 2 offering under GSA Smart. Pay 3 – Available for all business lines • Straight-through Processing is a payment mechanism within the commercial industry and is continuing to evolve 31

e. Payables: Straight-through Processing • Straight-through Processing flow 32

e. Payables • EPayables solutions are continually evolving within the payments sector • Becoming more available commercially • Greater opportunities for agencies to expand their programs and utilize these solutions Smart Tip Learn what e. Payable solutions your contactor bank offers under your task order today! 33

Next Steps • Ready to get started? • Here are some next steps: – Use the GSA Smart. Pay Savings Calculator to assess potential refund opportunities – Request an AP File Review and evaluate the results – Review your agency’s GSA Smart. Pay 3 Task Order offerings – Talk to other agencies that are piloting or have implemented strategic solutions – Develop recommendations for you management’s review and approval based on Review findings and available offerings – Work with your bank to implement strategic solutions 34

Final Thought • Did you know that on average the Federal Government spends approximately $560 billion in contract payments annually? – Imagine if you moved just a portion of that spend to a GSA Smart. Pay strategic payment solution. – Contract Payments is one of the largest areas of opportunities to move payments and to greatly increase your agency’s refunds! Smart Tip Take a strategic approach to your payments and watch your rebates soar! 35

Questions? 36

Links • Strategic Payment Solutions Publication – https: //smartpay. gsa. gov/sites/default/files/downloads/1900264_Smart. Pay%20 Payment_Folder_w. Slipsheets_508. pdf • e. Payables: What Makes Them Different? – https: //smartpay. gsa. gov/sites/default/files/downloads/e. Payables_082417_extrasmal l. pdf • GSA Smart. Pay Tax Advantage Travel Card Handout – https: //smartpay. gsa. gov/sites/default/files/downloads/SP 3_Tax_Advantage_Travel_ Card_Acct. Handout_v 3 -1 -2019. pdf • GSA Smart. Pay 3 Master Contract – https: //smartpay. gsa. gov/content/gsa-smartpay-3 -master-contract • GSA Smart. Pay Savings Calculator – https: //smartpay. gsa. gov/about-gsa-smartpay/program-statistics/savings-calculator 37

Contact Information Joline Mc. Donald joline. mcdonald@gsa. gov GSA Smart. Pay Customer Support gsa_smartpay@gsa. gov 38

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