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 ERICSA 52nd Annual Training Conference & Exposition April 26 30 Hershey Lodge Hershey, Pennsylvania
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
Unbanked and Underbanked http://cfed.org/assets/pdfs/most_unbanked_places_in_america.pdf
Unbanked 2013 FDIC National Survey of Unbanked and Underbanked Households
Underbanked 2013 FDIC National Survey of Unbanked and Underbanked Households
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 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
Established a Partnership AMSCOT had everything we were looking for: 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
Convenient Hours
Established a Partnership AMSCOT had everything we were looking for: Locations open 365 days/year with extended hours 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
Trained and Professional Staff
Established a Partnership AMSCOT had everything we were looking for: Locations open 365 days/year with extended hours Dedicated and trained agents 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
Established a Partnership AMSCOT had everything we were looking for: 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.
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 ERICSA 52nd Annual Training Conference & Exposition April 26 30 Hershey Lodge Hershey, Pennsylvania
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
Cash Only Thank You: Innovations in cash child support collections and serving the underbanked 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
Cash Only Thank You: Innovations in cash child support collections and serving the underbanked 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
Cash Only Thank You: Innovations in cash child support collections and serving the underbanked 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
Cash Only Thank You: Innovations in cash child support collections and serving the underbanked 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
Cash Only Thank You: Innovations in cash child support collections and serving the underbanked 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
Cash Only Thank You: Innovations in cash child support collections and serving the underbanked
Cash Only Thank You: Innovations in cash child support collections and serving the underbanked 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 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 ERICSA 52nd Annual Training Conference & Exposition April 26 30 Hershey Lodge Hershey, Pennsylvania
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: 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
State & County Promotion Contra Costa County
State & County Promotion Contra Costa Outreach Letter to customers with payment in last 2 years Postcard ID Card
State & County Promotion 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