Banking Technology in ReceivablesCollection 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

AR Customer Billing File

Paper billprint and mail

(To consumer)

ARMaster File

Billing File(s)

Billing File(s)

EBPP/EIPP

Biller brandedweb presentment of bill to consumer

BANK bill payment sitesweb presentment of bill to consumer

Print/Mail

5

C-2-B Paper and Electronic Collection Model

1. A single A/R posting file2. Financial settlement for all transactions3. Detail reporting of all payment

streams for reconcilement and control

Payment Sources

MerchantServices

ACHServices

&E-Lockbox

Lockbox services

BANK info systemsand internet reporting

ARSystem

EBPP/EIPP

Walk-in paymentcenters

ACH DirectDebit program

Online billpayment

transactions

Collection agencies, etc.

Paper checks &return items

IVR (interactive voice response)

Biller direct EBPP solution

Deliver bills to consolidation sites

Mobile/SMS

6

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

CheckFree, 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

Biller

Consumer’s Online Banking/Bill Payment

Provider

Consumer

Pay Bills

Collection and Credit Counseling

Agencies, and Walk-in Payment Centers

Dollars and Consumer Payment Information

1. Dollars Immediately Available2. Invoice Information in A/R File.

Information can be combined with BANK Lockbox data file.

Internet based Client Service Module

Customized Filtering/routing

available

9

BANK

EBPP/EIPP ServicesBiller 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

Web

IVR

EBPP/EIPPEngine

GenerateFiles

CC Settlement

Instr.

ACH FileBANK

ACH Ops

BANKMerchant

SvcBiller

Account@ BANK

Next DaySettlement

Next Day Settlement

A/R PostingFile

(DownloadOr

Lockbox Merge)

E-mailNotification

CallCenter

Billing FileLoading

(uploadOr

file transmission)

Payment Channels

Payment Options

12

13