Transcript Allstate Insurance Payment Strategies

Utility Payment Conference
October 19, 2010
Kim Folks, Tampa Electric
Amanda Johnson, Utility Payment Conference
 Payment Organizations and Associations
 Payment Regulations
 Payment Tenders, Terms and Acronyms
 Miscellaneous Payment Information
Federal
Reserve
NACHA
• Central Bank system
• Created in 1913
• Private bank system:
 Board of Governors
appointed by the
President
 Federal Open Market
Committee
 12 regional Banks
 Member banks
 Advisory councils
NACHA-The Electronic Payments Association
(formerly known as the National Automated Clearing House)
• Not-for-profit association
• Represents more than 11,000 financial institutions through
direct memberships
 Network of regional payments associations, and 650
organizations through its industry councils
• Develops operating rules and business practices for:
 ACH - Automated Clearing House Network
 EBPP - Electronic Bill Presentment and Payments
 EIPP - Electronic Bill and Invoice Presentment and
Payment
 EDI - Electronic Data Interchange Payments
 EBS - Electronic Benefits Services
Red Flag
Regulation E
• Issued by the Board of Governors of the Federal
Reserve System
• Implemented in 1978
• Governs electronic fund transfers from a consumer’s
account
• Protects consumers’ rights and sets limits on consumer
liability for unauthorized payments
• Imposes specific obligations to billers for recurring
payments
Indicators
A pattern, practice,
or specific activity
that indicates the
possible existence
of identify theft
1. Alerts, notifications or warnings
from consumer reporting agent
2. Suspicious documents
3. Unusual use of or suspicious
activity related to a covered account
4. Suspicious personal identifying
information
1. IDENTIFY
2. DETECT
Relevant patterns,
practices and specific
forms of identifying
possible red flags
Red flags that
have been
incorporated into
the program
3. RESPOND
4. UPDATE
Program
Appropriately to
periodically to
any RED FLAG(s)
capture lessons
detected
learned and
changes in risks
Your program must be reasonable
For additional information go to: www.ftc.gov/redflagsrule
• The ACH network is a highly reliable and efficient nationwide
batch-oriented electronic funds transfer system
• Governed by the NACHA operating rules
• Provides for the inter-bank clearing of electronic payments for
participating depository financial institutions
• The ACH network can be used to send either debits (payments) or
credits (refunds)
• A credit sends funds to a Receiver’s account
• A debit takes funds from a Receiver’s account
 Originator: Company /individual initiating an ACH transaction according
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to Receiver agreement
Originating Depository Financial Institution (ODFI): Financial
institution transmitting ACH files for the Originator into the ACH Network
ACH Operator: Central clearing facility operated by a private organization
or Federal Reserve Bank for participating financial institutions, to or from
which financial institutions transmit or receive ACH entries.
Receiver: A person or organization that has authorized the Originator to
initiate an ACH entry (debit or credit) to the Receiver's account with the
RDFI.
Receiving Depository Financial Institution (RDFI): Financial institution
that receives ACH entries from the ACH Operator and posts the entries to
the accounts of the depositors (Receivers).
Third-Party Processors: Processors that participate between any
relationship within the ACH processing flow (i.e., correspondents, sendingpoint processors or payroll processors).
Each type/method of payment in the ACH “world” has its
own rules and guidelines.
These are determined by the SEC (Standard Entry Code)
used in the payment file.
Commonly used SEC codes
MTE
CIE
CCD
AAAAAHHHHHHH ! ! ! !
 ARC – Accounts Receivable Conversion (mail)
 BOC – Back Office Conversion
 POP – Includes check serial number
 TEL – Phone
 WEB – Internet
 PPD – Pre-authorized Payment and Deposit (auto draft)
 RCK – Return Check
 RDFI – Receiving Depository Financial Institution
 ODFI – Originating Depository Financial Institution







ARC – Mail-in payments
Ck21 – Mail in payments
POP – Walk-up Retail Locations
TEL – IVR (Credit card/Check) Payments
WEB – E-Lock box (Consolidators)
PPD and CCD – EFT – Auto Pay
CTX – EDI 820’s
Accounts Receivable Conversion
Through electronic Accounts Receivable Check (ARC)
Conversion; lock box or drop box received eligible consumer
checks can be converted into electronic debits and processed
through the ACH network.
 Checks drawn on consumer accounts payable in U.S.
dollars are eligible for ARC conversion.
 Checks are machine read to capture the Magnetic Ink
Character Recognition (MICR) information routing
number, account number and check serial number along
the bottom of the check.
 The data elements, along with the check amount, are
used to create an ACH record. Typically, the billers bank
account is credited the next business day.
http://www.federalreserve.gov/pubs/checkconv/#what
Back Office Conversion
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•
•
•
•
Eligible checks converted to ACH debits
Controlled environment in the back-office
Authorized signature for conversion not required
Scanning equipment installation not required
Customer notification of conversion disclosed at the
register and on documents
• Checks that contain auxiliary on-us fields or those over
$25,000 are ineligible for BOC
http://www.federalreserve.gov/pubs/checkconv/#what
Point of Purchase
 Location where payment takes place
 Purchaser and seller are both present
 Information from the consumer's check is used to
create the electronic transaction
Internet Payments
 One-time or recurring
 Should include Terms & Conditions
 Privacy statement
 Appropriate authorization language
 Receipts / confirmations delivered electronically upon
completion of payment
Internal Voice Response Payments
Can be either PPD or TEL Entry
Requires written authorization if treated as PPD
One-time or recurring for PPD
If no written authorization on file then can complete only
per TEL rules.
 This requires written receipt or tape recording (actual
oral authorization)
TEL = one-time payment
Setting up PPD Payments via IVR is complex, normally
IVR should be a TEL entry
 ACH
 IRD
 MICR
 Authorized
 EDI
 NOC
 Check21
 Internet
 Non-contracted
 Contracted
payments
 IVR
 M-payments
 P2P
 CTX
 EBPP
 Electronic
Check
Conversion
 Unauthorized
 E-Lockbox
 EBIDS
Corporate Trade Exchange
 The CTX payment format combines payment information
and a variable length record (called an addendum record)
 ACH format which allows for up to 9,999 addenda records
with approximately 800,000 characters
 Allows multiple payments to creditors or billers in a single
transfer of funds
Image Replacement Document
The legal equivalent
of the original check
Electronic Data Interchange
 A set of standards for structuring information electronically
 Technical conversation between two entities, either
internal or external
 Information is the same displayed on paper documents
 Transmission method is agreed to by the sender and
recipient
Notice of Change
Information sent by an
RDFI to notify the
ODFI that previously
valid information for a
receiver has become
outdated or that
information contained
in a pre-notification is
erroneous
Pre-authorized
Payment & Deposit
Used to credit or
debit a consumer
account. (Payroll
direct deposits and
preauthorized bill
payments)
Return Check
A physical check
that was presented
but returned
because of
insufficient funds
may be represented
as an ACH entry
Electronic Bill Presentment and Payment
Is the process that enables bills to be created, delivered and
paid over the Internet.
The service has applications for many industries, from
financial service providers to telecommunications and
utilities.
• Fast
• Secure
• Environmentally responsible
☎ Mobile payment (M-payment) is a point-of-sale (POS)
payment made through a mobile device; cell phone,
Smart phone or personal digital assistant (PDA)
☎ Person to person (P2P) can be a wireless or text
enabled device which can be used to pay a variety of
bills at anytime without interacting with anyone including:
 Ability to transfer monies with a mobile phone from
person-to-person (P2P)
☞ Account number and personal identification number
(PIN) for authorization purposes required
A process in which your check is used as a source of
information for the check number, your account number, and
the number that identifies your financial institution.
Transaction types include:
ARC – Accounts Receivable Conversion
BOC – Back Office Conversion
POP – Point of Purchase
Benefits
• Privacy
• Secure and Protected
• Information of descriptive statement
• Environmental
http://www.federalreserve.gov/pubs/checkconv/#what
•
Passed in Oct 2004
•
Produces a digital image by scanning both sides of a
paper check
•
If a paper document is needed, a photo-reduced copy
of the original checks is created (“substitute check” or
IRD (Image Replacement Document)
•
Check21 is represented by:
 IRD – Image Replacement Document
 POP – Point of Purchase
http://www.federalreserve.gov/pubs/checkconv/#what
In person payment
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Authorized or unauthorized
Utility office location or 3rd party vendor relationship
Receipt issued for payment transaction
Data terminal equipment
 Kiosk – customer initiated
 Terminal – store or cashier initiated
Potential 'real-time' payment posting
•
An official
contract/agreement with a
3rd party payment vendor
• The vendor authorize
business or retailer to
accept payments for the
utility
• Cash, Check and Money
Order tenders accepted
• Advertised by utility
•
No official contract or
agreement with 3rd party
payment vendor
• A business or retailer who
accepts biller/utility
payments without contract
• Typically only accepts
cash as tender
• Usually 2 - 5 (business)
day delay of payment to
biller
• Consumer funded
convenience fee of $1 - $5
•
•
Are you currently looking to issue an RFP or RFI?
Are you currently contracted with a vendor that you are
unhappy with?
• Is your contracted vendor providing exemplary service?
• Do you believe it would be more effort to sever relations
with your existing vendor and to bring in another vendor?
Channels
Methods
Frequency
Mail In
Customer
In Person
Credit / Debit
Card
One-Time
ACH
eCheck
Web
Scheduled
Check
Recurring
Assisted Phone
Cash
Touchtone Phone
Kim Folks
Tampa Electric Company
813-275-3845
[email protected]
Amanda Johnson
Utility Payment Conference
309-762-2854 Office (CST)
[email protected]
Visit the Utility Payment Conference Exhibit Hall and
learn more about the services available to you from our
supporting vendors