Used to facilitate payment of bills, lockboxes
in the US usually take the form of a post office box accessible to
a biller’s bank. Now, Wausau and ClairMail are aiming to harness
mobile short message services to provide an alternative that is
both highly user friendly and secure. Charles
Linking the ever-popular short messaging
service (SMS) feature of mobile phones with payments, two US
companies, payments services provider Wausau Financial Systems and
mobile financial service developer ClairMail, hope to tap into a
whole new category of consumers: phone-savvy text users.
Using SMS two-way messaging to transmit billing
messages, reminders and payments, the companies hope to make the
service “a mobile alarm clock for bills,” Reetika Grewal, director
of product marketing for ClairMail told EPI.
The system, which is being described as a
mobile lockbox, is aimed at simplifying the enrollment process for
receiving and making mobile bill payments, and provides billers
incentives who promote the service.
Consumers can enroll in the service by checking
a box on a participating biller’s paper bill and providing their
mobile phone number.
The lockbox uses image-scanning software to
identify the account and send the relevant information, including
the consumer’s account number, banking information and phone
number, to Wausau’s data center, which hosts the service for the
When the biller produces its next monthly
statement, the consumer receives a text message that includes the
amount due and the option to pay it immediately, for free, by
responding. Payments are routed over the automated clearing house
system; no personal account information is transmitted over the
airwaves. Once a consumer pays the first bill through the system,
they are fully enrolled and can use it at will, without further
data entry or logins.
“We think that once people use this once to pay
a bill, they’ll be hooked,” Grewal said. “It’s so easy that it
requires no education – you just look down at your phone and it
says ‘You have a new bill from the power company for the amount,
and it asks if you want to pay it. So instead of sitting down once
a month with a pile of bills, people can pay as they go,
By integrating ClairMail’s Mobile Lockbox
technology with its remittance processing managed service, Wausau
will enable its customers to include payments via mobile phones as
part of their receivables processing offering to their clients in a
way never before offered in mobile payments.
With ClairMail’s Mobile Lockbox technology, a
two-way alert message is sent to the payer’s mobile phone with bill
payment details such as payee name, dollar amount and due
ClairMail’s mobile banking and payments
solution works on all mobile phones and supports all three mobile
user interface types – messaging, mobile web and client
Grewal said that the two-way nature of the bill
payments through the lockbox promises to break bill payments into a
series of single messages rather than a huge monthly chore,
representing a fundamental change in the way people pay
“This service combines alerts with our mail
platform so that bills coming in form a series of alerts, as people
receive bills and pay them, so we’re carrying the texts along with
a lot of our logic that drives the system. There may be different
thresholds for different bills, configured by the biller,” she
The lockbox terminology comes from the fact
that Wassau will handle the bills and switch payments – and it’s a
term that bankers are familiar with. Grewal said the companies are
working on a more environmentally appealing name for the
customer-facing side of the service, one that stresses the
paperless nature of the mobile payments.
The service also can be set to deliver reminder
messages when a certain bill is due, giving people the option to
pay it immediately, for a fee, which could help them avoid being
charged a late fee by the biller. The expedited payments service,
tied to alerts, is seen as a key revenue opportunity for
Wausau expects to start an internal test this
month and a test with biller-clients later this year.
Wausau is in a strong position to introduce a
mobile lockbox service, because it has a 48 percent market share in
the wholesale and retail lockbox markets, the bank said. It
processes 3 billion cheques a year for about 250 clients. Banking
and financial lockbox operations account for 63 percent of its
remittance system customers, with non-bank third-party lockbox
operations and in-house lockboxes for utilities and telecom
companies comprising the rest of its lockbox businesses.
Of course, some alternative payment providers
already let people transfer funds into one another’s accounts with
their phones. And some banking companies are already offering
mobile bill payment services, using their existing online banking
infrastructures. None have linked payments with two-way messaging
in the way that the Wausau-Clairmail service does, though.
For customers, two-way alerts provide the
obvious comfort of being informed in real-time when issues arise
with their financial accounts, and the convenience of being able to
immediately resolve the problem via their mobile phone. They are
non-intrusive yet deliver valuable information in real time, and
empower customers with simple control of their account.
The attraction of two-way alerts may far exceed
payments. For financial institutions, alerts can significantly cut
costs and generate new revenue. Banks can avoid huge losses from
fraud and identity theft by utilising two-way alerts as a fraud
prevention tool.
These alerts divert traffic away from more
expensive customer interaction channels, such as call centres and
interactive voice response (IVR) systems. Mobile alerts are
estimated to cost pennies, compared to $14 for each call centre
call or $3 for each call to the IVR system, according to
Clairmail’s research.
Wausau and Clairmail think that mobile bill
payment has been slowed by the fact that customers can set up
billers for payment online but not through a mobile handset. By
removing a significant hurdle in setting up accounts, the mobile
lockbox service could provide a real spark in mobile
“It’s truly instant payments, and it’s so easy
that we think this is what the market has been waiting on,” Grewal
said. “The SMS text message is going to become a major delivery