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
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
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,”
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
“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
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
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.