Western Union Sees Demand for Multiple Payment Options

For many consumers, the days of paying bills by sitting at a dining room table one night a month and writing checks are all but over.

These days, many prefer to make payments electronically or via telephone services, and that is opening up new opportunities for companies like Western Union Commercial Services, which offers alternative payment options to mortgage lenders as well as creditors in other industries.

Western Union's alternative payment business focuses on helping creditors manage electronic bill payment and check drafting efficiently while managing risk associated with alternative payment delivery and collections.

"We have a big client base within the mortgage industry," said Brett Noser, vice president for alternative payments at Western Union Commercial Services. In fact, he says Western Union is the largest payment processor serving the mortgage industry.

Unlike some Western Union services, such as Swiftpay which has a large customer base within the telecom sector, the alternative payment division largely functions as a non-branded unit. In fact, consumers who are using an alternative channel for paying their mortgage loan may not even realize that Western Union is involved in the process.

Easy Pay, Phone Pay and Consumer Web Pay are Western Union's three offerings most applicable to the mortgage industry.

Easy Pay, usually used in the collection of delinquent accounts, allows customer service representatives to take payments from borrowers over the phone. Most often the call is initiated by a mortgage servicer's customer service staff.

Phone Pay, more often used for borrowers who are current on their mortgage, allows consumers to pay their mortgage over the phone through an interactive voice response system, so that a customer service agent is not required on the call. Both services draw funds from the consumer's checking account.

The payments are typically initiated by the consumer via a Phone Pay toll-free number.

And Consumer Web Pay allows consumers to make a mortgage or other bill payment through a lender's website.

Many clients will offer one, two or all three of those services, Mr. Noser said.

"Consumers are demanding flexibility in making payments, and they want options," Mr. Noser said.

Mr. Noser said that most consumers have made telephone or online payments before, often using an automated voice response system that does not require a customer service agent.

And Western Union can build logic into payment services to suit a lender's needs. For instance, clients can create parameters that might exclude some borrowers from Phone Pay. Customers with a history of bounced checks might be directed to a Western Union cash payment service, such as Quick Pay.

Consumer resistance to automated payment options is melting as people become more comfortable using technology.

"Consumers are accustomed to utilizing a telephone response unit to make payments," he said. "The acceptance of paying on the Web is really growing."

In fact, he says consumer payments via the Internet on Western Union's Web Pay service are growing by a double- digit rate each month.

Mr. Noser said Western Union continues to look for ways it can add value to its alternative payment products. For instance, the company may add options that would allow consumers to pay with credit cards or debit cards. It may also add recurring payment options for consumers who would like to set up more than one automated payment.

"We are constantly looking for tools for risk management, to help clients take good payments and avoid taking bad payments,"

Mr. Noser said. Western Union, a member of the National Automated Clearinghouse Association, also monitors ACH rules.

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