Transcript BGE Customer Payment Options

BGE Customer Payment Channels – Current State,
Conversion Lessons Learned, and Future Opportunities
Barry DeBald
Senior Information Management Analyst
Baltimore Gas and Electric Company
Utility Payment Conference
September 26, 2012
An Exelon Company
Will it be smooth sailing for your payment systems as
you implement your new core billing system?
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Contents
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BGE History
Current Payment Channels at BGE
System Conversion Challenges
Enhancement Opportunities
Next Steps
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BGE History
• Founded in 1816, BGE is the nation's first gas utility and
one of the earliest electric utilities
• 1.2 Million customers
• Combined Gas and Electric Distribution Company
• Exelon is our parent company
• Electric Customer Choice (Deregulation) in 2000
• Retired Customer One DB2 environment in January 2012
• Oracle Customer Care and Billing (CC&B) implementation
in Jan. 2012
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Speaker’s Subject Matter Experience
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35 Years of utility experience
Customer One implementation (CIS)
Oracle Customer Care and Billing (CC&B) implementation
Customer Self Service (CSS) implementation
System Upgrades and Maintenance
Customer Choice implementation
Automated deposit implementation
Outsourcing of remittance processing
Electronic Bill Payment and Presentment
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“ Because we’ve always done it this way…..”
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Elimination of BGE tellers
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Teller functionality is not a BGE Core Competency.
Company payment locations are costly.
All other Maryland Utilities discontinued company tellers.
With rates capped at this time, cost savings were critical to
BGE’s bottom line.
• This became an important BGE Achieving Operational
Excellence (AOE) initiative.
• On July 1, 2003 we successfully completed the BGE AOE goal
of closing all of our BGE teller operations.
• The lack of resistance for this closing underscores the success
of our alternative payment methods.
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Current Payment Channels at BGE
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Description
Location /
Customer
Access
Annual
Volumes
BGE Drop Box /
Field Payments /
Internally Processed
Payments
Physical payments accepted and processed on an
exception basis
G&E Building /
Customer premises
9,000
8,800
374,000
Walk In Payment
Centers
America’s Cash Express – 35 locations; Global Express
– 355 locations
Several Hundred
Throughout Service
Territory
850,000
Mail Payments
Lockbox
Physical checks processed at CITI Bank lockbox
processing center
P.O. Box
Philadelphia, PA
5,200,000
Speedpay
Telephone and Web Payments
IVR – Automated
Phone Payments
1,400,000
Online Banking
EBPP / Checkfree
Internet
2,200,000
BGE.com
EBPP
Internet
1,350,000
BGEasy
Electronic ACH payments from customers
One-time paper
application
880,000
Electronic ACH
Payments
Payment consolidators / Corp to Corp Wires
Internet
960,000
Payment
Channel
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Electronic Bill Payment and Presentment
(EBPP)
• BGE.com / EBPP payments accounts for approximately 50% of customer
initiated electronic payments.
• First EBPP offering was implemented in 2000, Second EBPP offering was
implemented in 2006, Current offering in 2012.
− Enhanced EBPP offering increased number of customers viewing and
paying BGE bills online
• EBPP is a green solution.
• BGE has a 20% customer penetration rate which is attractive within the utility
space.
• Paper and postage savings have been significant; BGE has saved costs
associated with processing / mailing of approximately 2,640,000 bills and
envelopes annually plus the return envelopes and informational inserts.
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Bill Payment Consolidators
How Payment Consolidators work
Consumer logs into
their bank’s
website and selects
the online bill
payment option
Consumer selects
biller to pay,
enters payment
amount and
schedules payment
for today or any
future date
Consumer
information is
verified against
current BGE
business rules
Available funds and
consumer information
are validated on
scheduled payment
date
Consolidator
delivers payment
information to
biller on scheduled
payment date
Funds are
deposited into the
biller’s bank
account
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History – Credit Cards
• Early 1990’s, BGE became a credit card “merchant” accepting Visa, MasterCard,
American Express and Discover for final utility bills
• We later began accepting credit cards for active accounts pending termination, current
active accounts on Management appeal. Growth led to budget for discount/interchange
fees to approach $1 million per year.
• In 2001, we moved to the “convenience fee” model. The convenience fee model
originally included Visa, MasterCard, Discover and American Express. Visa and American
Express started enforcing “discrimination” clauses in contract not allowing different pricing
for different payment channels at merchant locations.
Many merchants had to drop Visa/American Express to keep a credit card offering or
greatly increase price to customers.
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Challenges to BGE Processing Credit Card In-House
Fees
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Interchange fees
Discount fees
Third-party application service provider (ASP) fees
Bank Fees
Fully loaded costs of accepting Credit Card is ~3.00% of
transaction
Data Breaches
• Payment Card Industry (PCI) Compliance
• Monetary damages due to data breaches
• Sourcing to ASP transfers liability
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Telephone and Web payments –
Western Union/Speedpay
• Speedpay is the vendor which processes all checks and credit cards by phone.
• Customers can make payments through Speedpay via:
− Phone / IVR 1-888-232-0088
− Intranet with BGE customer service representative
− Internet – customer initiated payment
• Customer contact center processes payments online when customers call in to make
payment; Many of these payments are customers in arrears and are often seeking a
payment plan which is processed by BGE call center representatives.
• Field payments are also processed by Speedpay with the aide of collections department
representatives.
− Initiative is under way to have field representatives process payments through IVR
with out the aide of collections department
• $1.65 nominal fee compared to other utilities and other lines of business; Commercial
payments cost customers 3.2% of transaction.
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Conversion Lessons Learned
• Retention of existing customer account numbers is the optimal
solution.
• Effectively communicating new account numbers to customers
is a challenging process.
• Never underestimate the power of a check – digit routine.
• Check digit routines virtually eliminate the possibility of a
payment going to the wrong account number because of
transposed digits.
• Without a check – digit routine, even one account number digit
off can cause the payment to be placed on another customer’s
account. This one action impacts two customers and causes
back office manual correction.
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Checklists build understanding of conversion activities
Issue
Proposed resolution
Owner/ Status
Action date
Bill ready e-mail text appended
to advise of upcoming changes
and need to re-enter banking
information
Updated file from Payment
Vendor containing customers
who received bills in the last 30
days.
Mailing to Payment Vendor)
customers who consolidate
and thus will not get e-bill
content
Future scheduled payments –
preferred solution
Future scheduled payments –
backup solution
Last Bill Delivery e-mails sent
Facilitate changes through
Biller Console
Rhea Lewis
In progress
11/28/11 Afternoon change for
e-mails starting 11/29/11
Payment Vendor to provide
Barry / Payment Vendor
Complete
12/2/11
Rhea Lewis working on mailing
to describe customers
alternatives to going back to
paper bills
Block scheduling of any
payments beyond 12/27/11
Block scheduling of any future
payments effective 12/6/11
December 29 (from the 12/28
evening last bill run of CIS
Rhea Lewis
In progress
12/15/11
Investigating
12/6/11
Investigating
12/6/11
Investigating
12/29/11
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Continuity
• The nature of projects carries with them an inherent fluidity of
personnel.
• As you learn of the roll-off of a project resource, formalize
transition plans as soon as possible.
• Transitioning activities to one person carries a risk of losing
items in translation, particularly if the second party departs (It
happened to us).
• Contractors are a great resource; planning their knowledge
transfer to company employees should begin early and be an
on-going process.
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Testing
• Test thoroughly, resist the temptation to test ‘Vanilla‘ accounts
and / or ‘Vanilla’ conditions.
• Test with a reasonable number of accounts.
• Volume testing is critical.
• Regression test any time you make a change.
• Don’t forget to ‘Live’ test when the system goes live. Test small
payments of a dollar or so to select accounts to verify all the
payment methods are operating smoothly across all channels.
• Don’t assume that if the IVR is processing ACH payments
correctly, the in-house EBPP ACH is processing payments
correctly.
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Enhancement Opportunities
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Current Payment Channel Initiatives
• Add Visa and MasterCard to our credit card offerings.
• Implement a custom payment IVR exclusively for the use of our
Field Collection Representatives.
• Obtain Public Service Commission approval to stop accepting field
payments from commercial customers.
We anticipate completing the first two initiatives in Fall 2012.
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Future Payment Channel Strategies
Plan now for Generation Y payment preferences
• Generation Y is considered the 18 – 25 yr old customer segment
• Members of Generation Y prefer less costly self-service channels
like online banking, ATMs and mobile banking
• 2 in 5 Generation Y consumers have already tried mobile banking
• Mobile banking security less of a concern to them
• More likely to carry unlimited wireless phone plans
• More likely to own a smart-phone (smart-phone owners are the
most loyal mobile bankers)
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Enhancement Opportunities – Future
Social Networking sites
• Add “How to Pay” info to
BGE’s Facebook page,
directing consumers to
the IVR and/or internet
site to make payments.
• Advertise with a BGE
logo and link to a
payment option web
page. This would come
up on other profile pages
so the user wouldn't
have to come directly to
the BGE profile page.
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Future Initiatives
• Monitor electronic payment options, social media sites and
mobile banking to ensure BGE is a leading edge utility.
• Mobile Payments – Enable phone applications and text
payments.
• Continue to listen to our customers requests for new payment
options.
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Contact Information
Barry DeBald
110 West Fayette Street
Baltimore, MD 21201
Telephone: 410-470-1035
E-mail: [email protected]
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