Innovative Payment Solutions

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Innovative Payment Solutions

• Presented by Jeff Horowitz, North American Cash
  Management Group Head
• 2006 NAST Treasury Management Conference

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Agenda

• Flow of Funds and Information
• Trends and Innovations
• Web-based Applications
• ePayments
• Credit Card
• ACH
• The New Lockbox
• Check 21
• Remote Check Deposit
• Case Study
• Opportunities

Do not go where the path may lead, go instead
where there is no path and leave a trail Ralph
Waldo Emerson
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Change is in the Air
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Flow of Funds and Information
Checks
Credit
Investments
G/L
Cash
Deposit/ Concentration Account
Credit Card
ACH
Wire
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Web-based Applications
Checks
Credit
Investments
G/L
Cash
Deposit/ConcentrationAccount
On-lineAccess
Credit Card
ACH
Real TimeInformation
Wire
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Payment Trends by Instrument
Source The Nilson Report, ATM Debit News
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Image Exchange Trends - SVPCO

• SVPCO-Electronic Clearing Services, the
  electronic check and check image exchange
  business of The Clearing House Payments Company
  L.L.C., reported that99 million check images
  were exchanged in October 2006 just short of
  projected volume of 100 million check images a
  monthby the end of 2006
• An increase of 23.4 of total monthly items,
  compared to September 2006

Source The Clearing House Payments Company, LLC
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Online Bill-Pay Trends
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ePayments

• Credit Card
• On-line Enrollment
• One-time Payment
• Recurring Payment
• ACH
• On-line Enrollment
• One-time Payment
• Recurring Payment

Logic will get you from A to B. Imagination will
take you everywhere. - Albert Einstein
Not all of your constituents want to pay
electronically There are still close to 40
Billion checks clearing per year in the U.S.
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The New Lockbox

• Images available for review
• Posting
• Exception Processing
• Notification of any exceptionsvia email
• Web Interface
• View documents
• Provide on-line feedback
• Make corrections on-line
• Add information on-line
• Lockbox processes items basedon information
  received
• Interactive Services Provide Control and
  Automation
• Return Checks Available On-line Same Day

Knowledge of what isdoes not open the door
directlyto what should be - Albert Einstein
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Check 21

• As of October 28, 2004 checks can now
  bepresented as substitutechecks between
  banksand returned in statementsto customers
• Minimal impact until
• Widespread truncation of original checks
• Likely dependent on adoption rate of image
  exchange

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Check 21

• That Doesnt Look Like My Check

Sample IRD
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Remote Check Deposit and Remote Lockbox

• Checks and documents scanned locally at your
  offices/site locations
• Check images, remittance information and
  depositinformation transmitted via Internet to
  Bank
• Transactions are balanced
• Pre Image Exchange items clear as substitute
  checks
• Post Image Exchange items clear electronically

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Case Study Water Utility with Over 2.5 Million
In-coming Payments Annually

• Objectives
• Accelerate and Enhance cash flow for customer
  payments
• Timely processing of remittances
• Regular transmissions for update to internal
  receivables platform
• Cost-Effective Solutions
• Utilize innovative technology to support flexible
  payment alternatives for customers

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Accelerated Flow of Funds and Information
Lockbox
Checks
A/R
Remote CheckDeposit
G/L
Over-the-Counter
Cash
Deposit/ConcentrationAccount

• On-line Access
• Image access to documents
• Lockbox exceptions with on-line decisioning
  tools
• Return items with images
• Consolidated payment files
• ePayment information

ePayments (Web andIVR)
ACH
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Solution for Water Utility and Customers/Constitue
nts

• Water Utility
• Traditional
• Lockbox (paper environment)
• Enhanced
• Remote Check Deposit (facility level)
• On-line Decisioning (Deposit and Return items)
• Consolidating Payment Files (ie
  Medavante/CheckFree)
• Customer
• ePayments (via Web and IVR)
• Over the counter payments (with direct feeds into
  lockbox)

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Opportunities

• Flexible Options
• On-line Collections (ePayments)
• Enhanced Lockbox with On-line Decisioning
• Leverage Image Technology
• Leverage Remote Check Deposit Based on Check 21
  Legislation
• Manage Accounts On-line in Real Time

I don't look to jump over 7-foot barsI look
around for 1-foot bars that I can step over -
Warren Buffett
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(No Transcript)