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Royal Cole, Executive Vice President of The Western Union Company’s Payment Services division, explains how to integrate new payment technologies into utility billing operations.

Since 1987, Western Union Payment Services has provided a complete suite of electronic and cash bill payment services backed by a trusted, reliable brand. Western Union offers the ability to capture payments through channels such as the internet, interactive voice response (IVR) units, e-mail bill presentment, call centers and walk-in locations.

NGP&E. What challenges do power utilities currently face in terms of their billing operations?
RC. The utilities industry is faced with challenges such as increased costs, deregulation, population growth and increased consumer expectations. Because of this, utilities are looking at new payment services that will reduce costs, increase efficiencies and enhance consumer satisfaction. Utilities must be able to streamline their payment operations while keeping their systems current with software upgrades.

NGP&E. How does Western Union address biller and consumer needs to provide payment solutions that accommodate both? And how is this proving advantageous to the power utilities market?
RC. When utility companies work with Western Union, we give them the option to provide multiple ways for consumers to send their utility bill payments – credit, debit, PIN-less and PIN-secured, ACH, via the internet, at a Western Union Agent location or through an IVR or phone. By enabling consumers to use these methods and for billers to receive payments through these options, we are able to meet the needs of both.

By integrating new payment technologies into their billing operations and providing flexible payment options to consumers, companies are experiencing increased on-time receivables, decreased disconnects and increased consumer satisfaction, all resulting in higher revenues and reduced costs. Consumers have choice and control over the payment option that fits their current situation – whether they prefer to pay with cash, want to send a payment quickly via the internet or need to send a late payment to avoid an interruption in service or to maintain good credit.

The advantages of multiple payment options are that by giving consumers fast and convenient ways to send their bill payments, utilities can reduce the number of late payments and service interruptions and also manage their cash flow.

NGP&E. How do Western Union’s service offerings compare to other payment processors? In what ways do you differentiate your services?
RC. Our clients choose Western Union over other payment processors for a variety of reasons, with one of our major differentiators being our extensive experience in managing bill payment operations. In 2006, we handled nearly 250 million consumer-to-business transactions worldwide, and we maintain more than 6000 biller relationships across various industries, including utilities, mortgage and auto finance.

Another distinguishing feature is our customized solutions that provide clients with access to near real-time payment data, so businesses can track and manage consumer payments and consumer relationships from start to finish.

NGP&E. What are the benefits of working with one payment processing service provider for billing solutions as compared to working with several different companies?
RC. When evaluating potential vendors for management of bill-payment operations, we recommend that billers listen to consumer demands, assess existing bill payment operations and evaluate the diverse array of benefits offered by each vendor.

By working with one payments processor, billers can achieve increased efficiency of service, reduced costs and enhanced consumer satisfaction. For example, a company that outsources bill payment operations to Western Union would benefit because our work is done behind the scenes and can be seamlessly integrated into existing technology. Billers and their consumer may never notice the difference technically; what they will notice is overall business improvements. As a comprehensive bill payment provider, Western Union helps businesses gain a competitive advantage in their industry, and also improve customer satisfaction and reduce turnover by providing consumers with the choice to pay how and when they want, with support when something goes wrong.

NGP&E. What are the adoption rates of bill payment methods such as walk-in bill payments, e-mail bill presentment and payment, internet, outbound calls and inbound IVR? How are you working with utilities to drive uptake of these methods? And what are the benefits of these different methods?
RC. While the adoption rates for each of these payment options differ, what Western Union is acutely aware of is the need for billers to provide a variety of bill payment options to consumers. What we’re seeing is that consumer preferences drive usage and adoption rates. For example, there is a tendency for billers to think that their consumers are turning to the internet to send their bill payments since the payments industry is increasingly implementing electronic options. However, according to Tower Group, walk-in payments make up approximately six percent of US consumer bill payments and are expected to rise steadily in the next few years. Also, only about a quarter of consumers say they are likely to change their bill payment method in the next year, demonstrating that billers should continue to offer consumers choices in how they send a bill payment.

We take a consultative approach with our clients and provide customized, easy-to-implement payment solutions, serving as a single source for payments. Therefore, by knowing our clients’ needs and understanding the financial obligations of consumers, we work with our clients one-on-one to determine how to increase usage and adoption of a particular payment option.

The benefits of all the payment options mentioned above – walk-in, e-mail bill presentment and payment, internet and IVR – are essentially the same: through these multiple payment options, consumers are able to choose a method that fits their budgetary and lifestyle needs. The benefit for businesses is that their payment processes are fast, easy efficient and accurate. Consumers can send payments however, whenever and wherever they want, and businesses are equipped to enable consumers’ payment method of choice.

NGP&E. How do Western Union’s alliances enable you to provide fast, convenient and secure payment options for billers’ customers?
RC. By forging alliances with companies such as Striata, Western Union is able to provide bill payment alternatives to our biller clients that are easy and fast to implement due to the fact that we’re combining the technology and experience of two companies. Alliances enable us to build upon a service or offering that already exists, to provide a comprehensive and innovative bill payment service for our business clients.

We seek alliances with other companies such as ourselves that are committed to serving the needs of billers, which include the ability to provide their consumers with fast and convenient bill payment methods.

For example, we have received many requests from billers, particularly those in the utilities industry, to offer an e-Billing option that is quick and convenient for consumers and easy to implement. Western Union’s e-mail bill presentment and payment to billers in industries such as utilities benefits our billers by significantly reducing costs associated with printing and posting paper bills as well as improving the management of payments, customer service and efficiency.