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May 27, 2009updated 04 Apr 2017 4:17pm

Online Resources resolves one-time payments problem

Upping the ante in the one-time payments market, US internet banking outsourcer Online Resources is aiming for the company-to-consumer angle, promising an end-to-end solution to all those troublesome one-time payments.The Virginia-based company announced that its eCommerce Services has developed a disbursement system focused on small, often one-time payments by companies to their consumers It is another way to serve the emerging market for outsourced payments services, and it extends the potential for electronification to a segment currently wholly dependent upon paper-based payments.The technology, which the company began offering to large billers late last year, is based on the pay anyone capabilities of its online bill payment software, which sends paper cheques to billers that cannot accept electronic payments, Robert R Craig, an executive vice-president at Online Resources and the general manager of eCommerce Services, told EPI.The disbursement solution satisfies a range of applications across a variety of industries including mortgages, credit cards, insurance, utilities, health care and others There are a host of uses for such a disbursement system, including refunds of overpayments, rewards, card balance transfers, insurance claims and flexible spending account reimbursements, to name but a few, Craig said.Electronic and paper combo Its a combination of electronic and paper payment solutions really aimed at the business-to-consumer market, Craig said

By Stafford Thomas

Upping the ante in the one-time payments market, US internet banking outsourcer Online Resources is aiming for the company-to-consumer angle, promising an end-to-end solution to all those troublesome one-time payments.

The Virginia-based company announced that its eCommerce Services has developed a disbursement system focused on small, often one-time payments by companies to their consumers. It is another way to serve the emerging market for outsourced payments services, and it extends the potential for electronification to a segment currently wholly dependent upon paper-based payments.

The technology, which the company began offering to large billers late last year, is based on the “pay anyone” capabilities of its online bill payment software, which sends paper cheques to billers that cannot accept electronic payments, Robert R Craig, an executive vice-president at Online Resources and the general manager of eCommerce Services, told EPI.

The disbursement solution satisfies a range of applications across a variety of industries including mortgages, credit cards, insurance, utilities, health care and others. There are a host of uses for such a disbursement system, including refunds of overpayments, rewards, card balance transfers, insurance claims and flexible spending account reimbursements, to name but a few, Craig said.

Electronic and paper combo

“It’s a combination of electronic and paper payment solutions really aimed at the business-to-consumer market,” Craig said.

“It will work for any recurring biller really, any businesses that need to send money back to the consumer. Take cable or satellite television for example. When people move – and we move a lot – they will owe customers some of the monthly fee. What we are saying is ‘if you send us a flat file of the customers you owe money, that will be the last of your worries.’”

Craig said that Online Resources would first look to its ever-growing network of 6,000 electronic biller endpoints for the customer owed money and at the data of the biller, and, if possible, make the entire transaction electronic.

“That is the goal, because that provides faster, more efficient and accurate payment posting,” he added. “Then, if we don’t find them in our own files, we cut a paper cheque and make sure it gets there and is cashed and that we have a good address. These are all functions that businesses struggle with every day.”

Online Resources said five major billers, including DirecTV Group Inc, have agreed to use the system. Other users are in the credit card and mortgage industries.

Disbursement lifecycle covered

For billers looking to consolidate their costly, disparate processes, Online Resources will manage business-to-consumer and business-to-business payments through the entire disbursement lifecycle.

The company manages end-to-end payment origination, clearing and settlement, reconciliation, exception processing and escheatment – when the customer fails to cash that refund cheque and the money becomes the property of the state. Compared to in-house processing, clients typically reduce their processing costs by 30 percent or more, Craig said.

“Escheatment really adds up, and we can turn to a biller and take that off their hands and they’ll see more money back as a result,” he added.

Disbursement is part of Online Resources’ eCom Advantage Suite, a comprehensive set of electronic billing solutions for presentment, payment and receivables to billers in many industries including healthcare, consumer finance, telecommunications and utilities.

“The disbursement product really evolved from ongoing conversations with a number of large billers who work with these sorts of issues every day,” Craig said.

“Escheatment, for example, is a real hassle for billers, because the laws are different in every state, and so many large billers are sending cheques to multiple states.

“It is an outsourcing play, and it is a natural extension of the electronic bill presentment and payment and electronic receivables business.”

The key, he said, is the end-to-end service approach that Online Resources has taken to disbursement, and the company’s realisation that those paper cheques are not going away.

“We had to go at this as a single point of entry and multiple points of disbursement, with a full reconciliation capability, so billers can track these payments in real time, and can see if they have good addresses, if the payments cleared, then know they have a good address,” Craig said.

“This is the only way to really make this work – you have to take it off their hands entirely.”

Craig said that the market for a disbursement service generally tracks the large billing markets.

“Think about any biller that routinely pushes a lot of money to consumers, and you think of credit card companies doing balance transfers, mortgage companies doing credit balances, car loans, and healthcare as well,” he said.

“It is an enormous potential market for us.”

Online Resources has also worked to expand its expedited payments business, announcing a deal recently with TIO Networks, a bill payment processor for a host of telecommunication, wireless, cable and utility companies that enables consumers of more than 500 US financial institutions to make expedited payments to select approved TIO biller partners.

Starting this summer, bank customers can make time sensitive bill payments to a select group of TIO's wireless, utility and cable billing partners through Online Resources banking and bill pay portals.

TIO is an important addition to Online Resources' Biller Endpoint Network and offers another rich revenue stream for billers and the firm itself, something Craig sees as yet another opportunity to yield profit from payments.

“We are really excited about the opportunity to bring electronic payments to a broader segment of the market, and we see a lot of room for growth in the outsourcing market ahead,” he said.

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