CASE STUDY: Southwest Gas and Western Union® Speedpay® Solutions

Southwest Gas is a major utility, providing service to more than 1.7 million customers in Nevada, southern California, and central and southern Arizona. Approximately 180 customer service representatives at Southwest Gas’ five (5) call-center locations handle an average of 12,000 calls per day.

Before the Western Union® Speedpay® service

In 2003, Southwest Gas was processing almost 20,000 credit card payments per month through another vendor. All of those payments were entered manually by Southwest Gas’ own customer service reps. The utility had no IVR or Internet options at that time, and was looking for ways to reduce costs while improving customer service by eliminating manual payment entry through the addition of the following:

• ACH and ATM payment channels
• IVR and Internet Platforms
• Recurring payments options

Western Union was able to help Southwest Gas meet its goals by offering the Speedpay® service, which provided IVR and Internet options, the training of Western Union call centers to handle Southwest Gas call volumes, and by creating a “hot key” on all of Southwest Gas ’ phones to allow reps to automatically transfer callers to the Western Union IVR.

In addition, Western Union facilitated the distribution of “billing” or statement inserts to the entire Southwest Gas customer base with information on new payment options, and by increasing the ease of use with Payment on File and recurring payment features.

Post-Speedpay implementation

By the end of 2003, 99% of all of Southwest Gas’ payments were being entered by the customers themselves using the self-service IVR and Internet options. Fewer than 1% of payments were entered by Western Union CSR’s. By 2005, Southwest Gas’ payment volume had doubled to more than 40,000 payments per month.

Currently, Southwest Gas offers consumers a variety of payment platforms, including Internet and Voice Response payment options, as well as the Western Union call-center solution.

Southwest Gas Internet Platform

Consumers who prefer to pay online can simply log on to www.swgas.com and click on the “Easy Ways to Pay Your Gas Bill” link. There, consumers are presented with multiple ways to send their bill payments.

If a customer chooses to send a payment via the Western Union Speedpay service, he or she is linked to the Western Union Speedpay payment page, where he or she is given the option to send a payment using a credit or debit card, ATM card or an electronic check.

All successful payments result in a payment confirmation screen, and the consumer is given a confirmation number.

Southwest Gas IVR Platform

In addition to the Internet option, the IVR platform Western Union was able to provide offered consumers availability 24 hours a day, seven days a week, 365 days a year, all payment types and channels, custom and standard voice talent in English and Spanish, custom verbiage and flexible business rules, as well as real-time validation of consumer information.

Consumers are also able to transfer into the Western Union IVR from another IVR, and can transfer out to a live Western Union representative at any time.

Western Union Call Center Support

The call center solution provided by Western Union offers 24x7x365 support. In addition, CSR’s are trained to focus on quality before talk-time, and all call-center personnel are equipped to handle multiple call types, including IVR training, frequently asked questions about the Western Union Speedpay service, payment entry on behalf of the consumer, PIN resets, recurring payment plan enrollment based on paper forms, and payment research requests.

Why Southwest Gas selected Western Union Payment Services

Western Union is a leader in the consumer bill-payment arena. We provide a portfolio of electronic and cash payment options that provide consumers with fast and convenient ways to send one-time or recurring payments. These services facilitate payments to a variety of organizations that receive consumer payments, including utilities, auto finance companies, mortgage servicers, financial service providers and governmental agencies.

We have offered bill payment since 1989, and we currently have relationships with more than 6,000 businesses and other billers. These relationships are a core component of our consumer-to-business payment services. In 2006, our top 20 billers represented approximately 45% of our consumer-to-business revenue. On average, we have provided our bill payment services to our top 20 billers, based on 2006 revenue, for more than 10 years.

Our consumer-to-business services strive to give consumers choices as to the payment channel and method of payment, and include the following:

Electronic payments. Consumers and billers use our Speedpay service in the United States and the United Kingdom. In the U.S., consumers can send payments to a variety of billers using credit cards, debit cards and ACH. Payments are initiated over the telephone or the Internet.

Cash payments. Consumers use our Quick Collect service to send guaranteed funds to businesses and government agencies from over 50,000 Western Union agent locations across the United States and Canada, using cash and, in select locations, a debit card. Consumers use our Western Union Convenience Pay® service to send payments by cash or check from a smaller number of Convenience PaySM Agent locations. These payments are primarily to utilities and telecommunication providers. We also offer the Quick Cash® service, a cash disbursement service used by businesses and government agencies to send money to employees or individuals with whom they have accounts or other business relationships. In addition, our recent acquisition, SEPSA, provides a walk-in bill payment service at 3,300 locations in Argentina and operates under the well-known Pago Fácil brand.

Our Agent network makes it easy and convenient for consumers to send their bill payments at an Agent location in their neighborhood. In the United States, consumers will find a Western Union Agent location in 8 of 10 of the largest grocery-store chains. In addition, many of our Agent locations are open during nontraditional banking hours, such as nights and weekends, making it easier for consumers to use our services.

Distribution and Marketing Channels

Our electronic payment services are available primarily through the telephone and the Internet, while our cash-based services are available through our Agent networks. Billers market our services to consumers in a number of ways, and we market our services directly to consumers using a variety of means, including advertising materials and promotional activities at our Agent locations. Consumers can also participate in the Western Union Gold Card program, a loyalty program with more than 8 million active cards, when sending cash payments to billers.

Industry Trends

The consumer-to-business payment industry has evolved with technological innovations that created new methods of processing payments from individuals to businesses. The United States is in the midst of a trend away from paper checks toward electronic payment methods accessible through multiple technologies. We believe that the market will reward those companies that are able to provide consumers with fast and reliable ways to send payments by the method and through the means of their choice. Historically, the majority of bills in the United States were paid through checks in the mail. In 1989, Western Union began offering an Agent-based cash bill payment solution, which provided consumers with a convenient, walk-in, cash-based way to send their bill payments. Further innovation in the industry led to the creation of electronic options for consumer payments, including telephone and online services. In a February 2005 report, Aite estimated that more than 18 billion bill payments would be made in 2005 in the United States alone.

The consumer-to-business payment industry outside the United States is at varying stages of development. In some countries, walk-in cash payments at a biller’s office or through a third-party network are widely used, while in other countries, electronic payment options are finding ready acceptance by consumers and businesses alike.