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Payment Acceptance Cost: A Corporate Journey The beginning and progress of our continuing journey Presenters Patti Ritter, CPA, CTP Senior Treasury Operations Manager Patti has worked on payment-related initiatives throughout her career at Republic Services. After an initial career in public accounting, she worked in banking for 15 years in accounting, lending, and consumer loan product development and project management. She has spent the last 13 years in corporate treasury, focused on special projects. Jeff Morley, CFP Director, Customer Experience Jeff is a seasoned customer experience leader, having served in senior call center and investment advisory leadership positions for a major financial services firm for over 20 years. He joined Republic Services two years ago as Director of Customer Experience as part of Republic’s strategic initiative to become a truly customercentric organization. He holds a BA in Economics from Virginia Commonwealth University and is a Certified Financial Planner (CFP). Agenda • Our Journey − How we started − Analysis of situation • Finding Solutions − Solutions considered − Influencing the customer − Influencing the field − Corporate-level solutions Introduction • Republic Services is an $8.5 billion company operating in 40 states • Second largest provider of domestic non-hazardous recycling & waste solutions • We are not a utility, but operate under many municipal contracts Lines of Business • 339 collection operations • 198 transfer stations • 190 landfills • 62 recycling centers • 71 landfill gas and renewable energy projects Payment Channels • Numerous payment channels to accommodate the diversity of our customer base • Process 2.2 million payments per month Payment Methods • Accept payments by cash, checks, credit cards and consumer and business electronic payments • Overall, lockboxes take most payments The beginning of the journey • Due to increasing payment acceptance cost, we began a deep dive into payment costs in early 2012 • Analyzed trends in payment methods, channels and payment costs by channel • Trend is to OBP payments and more credit card payments The beginning of the journey Initial hypothesis: the volume of credit cards in our online bill pay channel and resulting cost was our primary issue Analysis • As we began digging deeper, we found the answer wasn’t that simple • We stratified payments by payment amount and consumer vs. business Analysis • We are benefiting from Durbin rates on debit cards • A disproportionate amount of our cost is from large governmental and business payments by credit card Exploring for solutions • Listen to all ideas • Other billers shared their own efforts to reduce payment costs • Service providers offered insight into their client’s efforts Exploring for solutions • A payment industry consultant helped us focus our analysis of costs and potential solutions • Consulted internal resources from customer experience and IT • Constraints with IT resources Solutions Evaluated • One major focus was on how solutions might impact the customer experience • Concern from senior management about negative customer reaction and potential defection to the competition • Customer segments Solutions Evaluated Market reality: credit card companies are aggressively marketing purchasing cards to governmental and business customers Solutions Shelved Not considered for the near term • Discontinuing credit card acceptance • Implementing a fee for credit cards, or for CSR, IVR or one-time payments • CSR incentives to sign up customers for recurring ACH • Customer rewards and cash discounts Influencing the Customer Revise OBP pages to make ACH the default payment method Improve web site “Pay Your Bill” page Promote bill-pay and recurring ACH payments in a variety of customer communications Influencing the Field Allocate credit card fees to divisions based on actual cost Provide reports to the field of customers making large credit card payments Set up a process to give feedback on major customer bids Corporate Initiatives Implemented Level 3 credit card data, which qualified us for lower fees on corporate purchasing cards Suggested invoice messages provided to field Awareness messages The Journey Continues • Ongoing process • What’s up next? Share your feedback! Patti Ritter [email protected] Jeff Morley [email protected]