Verizon Looks to POS System to Cope with Rising Walk-in Payments

Hoping to process a growing volume of bill payments customers make in its 76 stores, Verizon Communications Inc. is installing a new point-of-sale system that when complete will speed up check transactions, offer customers real-time payment posting, and allow the telecommunications giant to archive transaction information from multiple payment forms, including checks, money orders, and credit cards. Verizon is acting, in part, to cope with a rising volume of walk-in payments, which now account for 6% of transactions in its landline business, or about 1.6 million transactions a month, up from about 5.5% a year ago, estimates Angeline Depauw, director for electronic remittance processing and electronic payments at Verizon. Walk-in bill payments generally now account for some 500 million transactions annually, with 32% of these transactions originating as checks, according to Aite Group LLC, leading some billers to look for ways to convert payments to electronic processing. Verizon's new system, which processes checks either through image exchange or the automated clearing house, is in pilot currently in a few Verizon stores. The company hopes it will allow its locations to spend more time selling and less time handling transactions. “They're supposed to be revenue centers, but they spend most of their time taking payments,” Depauw told attendees this week at a Chicago trade show sponsored by The Association for Work Process Improvement. “Some stores have to close during business hours to process bill payments. You can imagine what that's doing to sales.” Indeed, Verizon worries about how lengthy waits in line to pay a bill could be affecting customers. “If you've stood in line for 30 minutes and it takes five to 10 minutes to process a payment, you don't want to hear about what other products and services we have,” Deapauw said. With the new POS system, she said, payment processing time has been cut to “about 30 seconds.” Depauw says that up to now the company has not been able to track walk-in payments by payment type. As is the case with other billers, some are cash transactions made by last-minute payers. Checks, money orders, and credit cards account for the rest, though Verizon accepts credit cards in only five states. With respect to all U.S. walk-in payments, 64% are cash, with the remainder made up of checks and money orders, according to Aite Group. Randy Malchar, director of product marketing for Metavante Image Solutions, the unit of Milwaukee-based processor Metavante Corp. that is installing the payment system, confirms walk-in volume is climbing among billers it talks to, with so-called expedited payments driving the increase. “In many cases, it's that customer who needs to come in and pay a bill at the last minute,” he told the TAWPI audience. The Metavante system allows Verizon to capture, for later archiving, images of all payment documents, including credit card receipts, at each of the four or five cashier stations located in each store. It scans checks and processes them through image exchange or through the accounts-receivable (ARC) application of the ACH, depending on clearing times and fees. Depauw said payments can be posted to customer accounts the same day they are made. ACH and card payments are processed by Chase Paymentech Solutions LLC. The biggest challenge Verizon has faced, Depauw said, is data encryption, which has turned out to be a massive project. “That's a big issue,” she told the audience. But expected payback on the project, she said, is favorable. “This is a nine-month [return on investment],” she said. “Not a no-brainer but easy to do.”