Cash Only, Thank You: Innovations in cash Child Support Collections.

Transcription

Cash Only, Thank You
Innovations In Cash Child Support Collections And
Serving The Under-Banked
ERICSA 52nd Annual Training Conference & Exposition ▪ April 26 – 30
Hershey Lodge ▪ Hershey, Pennsylvania
Serving Underbanked and Unbanked
Child Support Customers in the
U.S. and Florida
Mike Moreno
CiviTek: Government Solutions
Banking Status in the U.S. - 2013
2013 FDIC National Survey of Unbanked and Underbanked Households
Unbanked
represent 9.6
million
households
24.8 million
underbanked
households
Unbanked
dropped from
8.2% in 2009
to 7.7% in
2013
ERICSA 52nd Annual Training Conference & Exposition ▪ April 26 – 30 ▪ Hershey Lodge ▪ Hershey, Pennsylvania
Unbanked and Underbanked
http://cfed.org/assets/pdfs/Most_Unbanked_Places_in_America.pdf
Unbanked
Underbanked
Florida’s Unbanked and Underbanked
Florida’s Unbanked and Underbanked
7.0% of all households in Florida (an
estimated 527,000 households) are
unbanked.
18.2% of households with an annual
income of $30,000 or less are
unbanked.
24.2% of Black, 8.5% of Hispanic and
6.0% of other minority households are
unbanked.
https://sites.google.com/site/bankonflorida/home/un-and-under-banked-in-florida
Florida Direct Payment Options
Travel Back in time to 2009
MyFloridaCounty.com
Pros: Great resource for fully banked
direct payors and those with prepaid
cards
Cons: Not helpful for underbanked and
unbanked that deal primarily in cash
Money Orders
Pros: Easy and inexpensive means for
remitting/mailing cash based payments
Cons:




1/3 of all direct payments were Money Orders
Often Money Orders require manual posting and
are difficult to read
Increased risk of lacking identifying information
to post to the appropriate case
Much higher likelihood of the payment being
unidentifiable
Cash Payments at the Clerks Office
Pros: Accepts cash, checks, and
money orders
Cons:





Inconvenient hours, typically 8am to 5pm
Fuel and transportation expense
Potential cost of needing to take time off
from work
Expensive for the clerks properly staff
cashiering counter and manage cash
handling tasks
Increased liability for the clerks
Other Cash Payments
Pros:



Western Union and MoneyGram offer cash child
support payments at any retailer offering their
services, nationwide
Case information validated before money is
transacted
Receipt provided with date/time stamp
Cons:




Treated as a bill payment, using a generic bill
payment form
Complicated case number formatting
MoneyGram requires a unique receive code
Both services extremely under utilized
We Had An Idea!
We loved the idea of the services
being offered by Western Union and
MoneyGram
We needed to identify a partner that
could:



provide trained customer support to assist
those making a cash payment
verify case details before money was
receipted
ensure hours of operation and locations
were convenient to targeted payors
Behind the numbers
We took a closer look at the Money
Orders we were receiving
AMSCOT Financial
43% of the Money Orders we were
receiving on a monthly basis
Why? They’re FREE!!
Established a Partnership

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Locations open 365 days/year with
extended hours
Dedicated and trained agents
Clean, brightly lite, and safe locations –
located in targeted area along the I-4
corridor and most recently expanded to
South Florida’s I-95 corridor.
Flexibility and willingness to validate case
information and adapt business
processes
AMSCOT had everything we were
looking for:



processes
Convenient Hours
looking for:



extended hours
processes
Trained and Professional Staff
looking for:



extended hours
– located in targeted area
along the I-4 corridor and most recently
expanded to South Florida’s I-95 corridor.
Technical flexibility and willingness to
validate case
Convenient Locations
Over 230 locations throughout Central
and South Florida
Already offering bill payment services
for county and city services, including
utilities payments, and traffic citation
payments
looking for:



extended hours
Flexible and Adaptable Partner
For a $5.00 fee customers can make a
verified cash payment on their child
support case
Agents are trained to assist customer
through the process from start to finish
Customer receipt provided with date
and time stamp
Provides frequent marketing mail outs
and marketing collateral for clerk’s
offices at no cost.
Marketing Materials
The Success of the Project
Not overnight, but strong growth
One Problem…
Why would anyone use this fee based
service over a FREE money order?
We hoped that it being a guaranteed
payment would drive people away
from money orders and to this new
service
Guess what?
Providing a
guarantee and a receipt with date/time
stamp was invaluable to the customer
Strong Year-Over-Year Growth
34% Increase
29% Increase
24% Increase
First full year –
306% increase
Live for 7
months
Success!
Customers are converting to a fee
based service over free money orders
2015 is project to exceed $25 million in
cash payments received at AMSCOT
locations
No more unidentifiable payments!
New Project
Partnership with a kiosk vendor that
accepts cash and credit/debit card
payments
Pilot Project deployed in Santa Rosa
County Clerk of the Courts office
Planned roll-out across Florida in late
2015 and 2016
Another Great Partner
Already doing business in child
support and other government
services
Kiosk can offer an add value for other
units of county government
A Kiosk Vendor Should:
 Own the responsibility of all cash
monies from payment to ACH
deposit
 Accept Cash, Credit/Debit – AMEX,
MasterCard, Visa and Discover
 Guarantee all funds accepted at
the kiosk
 Have a bill validator that detects
counterfeit notes
 Have a camera and reports that
include picture of payer
 Be easy to use – quick to learn
CiviTek: Government Solutions
mmoreno@civiteknational.com
(850) 443-0340
Cash Only, Thank You:
Innovations in cash Child Support Collections
and Serving the under-banked
Robert Riddle
SMI
Cash Only Thank You: Innovations in cash child support collections and
serving the underbanked
Why Would Cash Child Support Payers become
Prepaid Debit Card Users?
•
•
•
•
Greater access to funds
Safer than carrying cash
Avoids “overdraft” fees
More payment and purchasing options
─ ATM, POS signature, teller, internet, recurring payments, rent, etc.
• Better control over spending
─ Less cash and more direct purchases/payments
• Can be FDIC insured, Regulation E, Zero liability
protection
J-Hook Cards Available in Retail Locations
Retail cards generally have a purchase fee from $2.95 to $4.95
• All have minimum and maximum load limits
• Are loadable at a merchant or wire transfer location
• Are not insured against loss or theft
• Cannot be used at ATMs
Debit cards can have transaction
fees or monthly fees associated
with their use.
• All are reloadable and may offer other
features such as Bill Pay
• Can be used at ATMs
• All are generally FDIC insured
• All have daily deposit and account
limits
Example of Reloadable Card Fees
Get The Card
•
Online (card has no value until loaded) No fee
•
In a retail store (includes initial cash load) Up to $4.95
•
Monthly Charge. Have this charge waived in any billing cycle when you load
at least $1,000 or have at least 30 qualifying purchases posted to your account. $5.95
•
•
•
USE AND RELOAD THE CARD
Direct Deposit your paycheck or government benefits Add cash at participating retail locations with Reload @ the Register -
•
•
•
•
•
USE ATMs AND GET CASH
Withdrawal or balance inquiry at MoneyPass® ATMs Non-MoneyPass ATM withdrawal Non-MoneyPass ATM balance inquiry Bank teller cash withdrawal $2.50
Other
Replacing a lost, stolen or damaged card Transaction fee for purchases with merchants outside the U.S. Other optional services may be available -
•
•
•
•
No fee
Up to $4.95
No fee
$2.50
$0.50
$4.95
3%
Fees vary
•
Allows purchases at retail locations
accepting associated network brand
 In store, online and by phone
•
•
•
Limited to the balance in the card
account
Available to everyone – no
application or credit check
Mirrors debit card features:
- Bill pay
- Purchase protection
- Text Alerts Available
Prepaid cards provide the unbanked or under banked
a mainstream product with greater cash access, more
security and convenience than cash
Funds Access
• Use card to purchases and pay
bills everywhere Visa Debit cards
are accepted
• Access cash at ATMs and from
tellers at member banks and credit
unions
• Get cash back with purchase at
participating merchants
Account Management
• Interactive website
 Balance inquiries
 Bill pay
 Text and email account
activity alerts
Customer Service
• Typically 24/7, 365
• By phone and online
Protection
• Regulation E
• Regulation P
• Zero Liability
Added Value
• Reloadable
• Financial literacy education
• Merchant offers and discounts
Single Card Solution
Cardholders can easily add funds from other payment
sources like payroll, unemployment insurance and
personal income tax refunds
Robust Mobile App
Functionality
Inform
Educate
Alert
Reward
Optimize
Mobile App Features
• Card-based enrollment
• Balance inquiry
• Funds transfer
• Transaction history
• ATM locator
• Suspension/re-activation
• Integrated balance and
transaction alerts

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SMS “BAL” inquiry
Daily balance
Approved pending transactions
Declined transactions
Change of card status
Low Balance alerts
Profile update alerts
• Account management
• iPhone, Android and SMS text
Cash Only
Hal Carl
Xerox
The Unbanked
Source: Consumers and Mobile Financial
Services 2014. Published by Consumer and
Community Development Research Section
of the Federal Reserve Board’s Division of
Consumer and Community Affairs.
Unbanked Level Constant
2011
2012
2013
10.8%
9.5%
10.5%
Reasons for not having a bank account
Don't have enough money
25%
Don't need or want an account
24%
Refused to answer
15%
Banking history, credit, or ID problems
10%
I wouldn't use an account enough
8%
Other
7%
I don't like dealing with banks
6%
I cannot manage/balance an account
2%
The fees are too high or unpredictable
2%
Banks do not have convenient hours or locations
1%
Banks don't offer the products or services I need
1%
0%
5%
10%
15%
20%
25%
30%
MoneyGram
Retail Locations for Clients
39,000+
Agents
Other
Retail Agents
MoneyGram
Customer Convenience for Less


Flat fee regardless of face amount for child
support
Real-time payment notification on every
transaction

Patented tracking and collection tool

Simple consumer payment message and value

Reduced account processing issues

Strong national retail partners (Walmart & CVS)
47
MoneyGram
Payment Tracker
 All detail collected at time of payment is available within PaymentTracker.
48
REAL-TIME VALIDATION
AT POINT OF SALE
Payment Flow to SDU
49
What do you need to do?
If you are one of the 26 states that
accept “Direct Payor” payments
electronically: NOTHING!
You may already be
receiving
payments
50
What do you need to do?
Provide information about payment
options:
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
On state and county websites
Posters in the child support offices
Forms explaining payment options
handed out in court and the child support
offices
Inform clients through call center
Educate courts and child support staff
Notification to cash payers of new service
State & County Promotion
Texas
Contra Costa County
Contra Costa Outreach
• Letter to customers
with payment in last 2
years
• Postcard
• ID Card
Contra Costa Outreach
• Outbound dialing
campaign
• E-mail campaign
• Postcards in lobby,
court, drive-thru, mail
with new orders
• Posters on website &
Facebook
• Posters to partners –
FLF, court, VA,
fatherhood programs
Client Benefits
Convenience



Locations
Hours of operation
No security processes to go through
Fewer payments misapplied/lost
Payment receipt at time of purchase
Guaranteed delivery of payment
Agency Benefits
Additional payment source
Opportunity to stop handling
payments in office

Texas and Contra Costa County
don’t take cash payments in the
local office(s) anymore

More Cost Effective

Protects Employees

Preserves the Public Trust

Improves Customer Service

Cash Only, Thank You: Innovations in cash Child Support Collections.

Transcription

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