On Line Payments by Paul Hermanson

OVERVIEW
The ability to shop and pay bills via the internet is certainly popular, if not efficient and beneficial for many people these days. So, we have been looking at offering an online bill payment option for utility bills, and possibly other bills owed to the city.
We have identified one main objective online bill payments - make it easier for customers to make payments. This objective also includes things such as more convenient payment channels (24x7 online, automated phone and mobile), more convenient payment options (credit card, eCheck and debit) with real-time payment confirmation, the ability to make payments 24x7 avoiding the need to walk-in or call-in during business hours to make a payment, and make a payment from the comfort of home.
If instituted, customers could go online through the LML&W website and make a payment by credit card, debit or echeck, or call a dedicated toll-free number to make an automated phone payment by credit card, debit or echeck, or use their mobile phone to make a payment.
There are an increasing number of people who have a strong desire to use credit cards to pay bills. Perhaps they are facing a late fee or disconnection and need a real-time payment option, or are looking for another convenient payment option (automated phone or online) for after hours payments. Reasons for credit card payments include:
· Rewards, loyalty points
· Habitual, they pay all their bills by credit card
· Cash management (better option than being late or taking out an expensive cash advance)


BENEFITS
· Customer: More convenience, make it easier for customers to pay their bill. Customers receive convenient options to pay their bills anytime, 24x7, using any payment method (credit card, debit, e.check) allowing them to avoid the need to call during business hours or walk-in to make a payment. Payments can be made online or by automated phone from the comfort of their own home.

· Customer Service: Our staff will securely access an “Agent Dashboard” allowing the ability to look up and confirm payments, resolve calls faster (typically within one call), easily and securely accept payments over the phone, and access real-time reports.

· Finance: We receive an enterprise payment platform with modern functions including detailed transaction and payment reporting, reports to simplify reconciliation (G/L), simplified returns, dispute and NSF management, with no negative impact on our budget.

· Late Payments/Disconnections/Shut-Offs: Customers get a real-time credit card payment option to avoid last-minute disconnection/shut-off. Some utilities have their field staff provide a toll-free number to the household facing disconnect, to call and make a credit card or check payment, giving them an option to avoid the disconnect and expensive reconnection fees.

COST
We have spoken with two online payment providers to this point – Paymentus and Payment Services Network. Both operate similarly, but have some significant differences. Both provide services by charging a convenience fee. Paymentus has set their fee at $3.50 per transaction and Payment Services Network has set a fee of $2.099 per transaction.
This fee can be paid by the customer or the utility or a combination. One of the main discussions is who pays this fee. At this time most utilities in Wisconsin pass the cost on to the customer, while some utilities absorb this fee. The practice of charging a convenience fee to the users of this service is common in many Cities, Utilities and Municipalities across the US.


NOTES
For the purposes of discussion I am including bulleted notes from presentation from both providers we are researching. We are still in the process of examining both companies and getting feedback from other utilities using their services.


Paymentus (demonstration February 18, 2010)

· Provides an “e-bill”
· PCI compliant – 3rd party hosted – no CC information is stored – site is secure
· Harris Northstar preferred partner – seamless interconnection
· Credit cards, savings or check payments accepted
· Provides a toll free number for phone payments
· All payments deposited to our account within 48 hours
· Checks are compared to a “bad check writer’s list” prior to accepting online
· Customer receives confirmation email of payment accepted
· Some marketing materials are provided
· No cost to LM for user based model
· Cost per transaction is $3.50

Payment Service Network (demonstration February 24, 2010)

· Provides an “ebill”
· PCI compliant – some information is stored, but site remains secure
· Does not link directly to Harris Northstar – requires working through an FTP, this is provided by WPPI
· Credit card, savings, or check payments accepted
· Provides a toll free number for phone payments
· CC payments deposited within 48 hours, checks on 3rd business day – notification of NFS checks 2-3 days
· Customer receives email notification of payment accepted
· Some marketing materials are provided
· No cost to LM for user based model
· Cost per transaction is $2.99.