Payment options in Intelec

Helping you understand our design for setting up payments

The topic -

In any collection system, accepting payments from debtors is a key part of the system. In a flexible collection system, there would be many options for setting up payments (e.g. processing payments today, post-dated check options, managing payment arrangements etc.). With Intelec, where the method of payment can be used in decision-making, there are additional considerations to be made. This paper will describe these areas and the solutions we have built.

Background and introduction

Many years ago, there were only two types of payments we had to consider - cash and checks. Today, we have to also deal with "checks by phone", post-dated checks, credit cards and electronically processed checks and credit cards. In Intelec, our goal is to allow you to work with and accept any form of payment. Some transactions such as setting up a "check by phone" are handled by the collector, while others such as a mailed in post-dated check are usually handled within a payment processing section of the operation.

Within Intelec, we support the following. Note that the features described refer to Version 8.25 of Intelec. Some features are not available in prior releases. We can handle the following.

  • Checks that are mailed and and post-dated checks that are received

  • Cash payments

  • Direct checks (checks by phone) whether they be for today or for future dates. These can be set up by a user or added through an IVR application and API's that are utilized for interfacing that application to Intelec.

  • Credit cards can be used to make a payment today, or can be used to make the payments on a recurring arrangement.

  • We also support pre-authorized payments (arrangement with the debtor's bank). This is more common in Canada and will not be discussed in detail.

While we support these individual options, we also need to consider the practical aspects of each transaction. As an example a debtor may set up a payment arrangement to pay $200 a month, by mailing checks every month. Later on, they may call in, ask you to cancel the check option and use their credit card for the payments. One of the credit card payments may later fail to be authorized. After the due date, you may talk to the debtor and may have to process a one-time payment using the credit card. What about account processing? If the debtor is on a performing "payment arrangement" you probably do not want the account to be presented to a collector. But what constitutes a payment arrangement? Is a series of checks a payment arrangement? What about a series of payments using a credit card? Within Intelec, you can make decisions based on the "existence of a payment arrangement". As you can see, we face some significant challenges as we try to make all of these options work together.

How we approach the problem

We have tried to design the software based on the practical operational aspects of each transaction (the interaction between the collector and the debtor). The options for receiving checks in the mail are easy to understand. The challenges arise when we deal with payment arrangements, credit cards or checks that are set up by a collector. We believe that the following is a good representation of the possible transactions.

  • The collector will determine if the debtor wants to make a single payment or set up a payment arrangement.

  • If we are dealing with a single payment, then the debtor can mail a check, set up a direct check or use a credit card.

  • To set up a direct check, the collector would go to the direct checks screen and enter the information, with today's date for the check date. If the debtor wants to wait a few days, then the check date can be in the future. All transactions that are set up through direct checks are automatically added to the post-dated check system. That is because we use the post-dated checks module to generate letters to the debtor and to keep accounts away from the queues. When you set up a series of direct checks it is not necessary to set up a payment arrangement, but there are other things to consider as we will point out later on.

  • For a credit card payment, the collector would go to the credit card screen and set up the credit card information. They would next have to respond to the question as to whether the card was being used for a payment arrangement or a single payment. For a one-time payment, they should take the path of the single payment. They will be asked to enter the amount and the payment will appear on a report or be electronically processed the next time the required option is run.

  • If the debtor wants to make a credit card payment a few days from today, we need a different approach. In this case you could set up credit card information and then use the non-linear payment arrangement option to set up a single payment. The non-linear arrangement is very flexible since it can be used to set up a specific number of payments for different dates. But since most payments would be made on a specific day of the month, the standard payment arrangement will meet most requirements. We believe that both features are necessary, and that the best option should be used depending on the circumstances.

  • What about a series of checks? Do you set them up as direct checks (and postdates) only? Do you need to also set up a payment arrangement? As long as we have a direct check or post-dated check, an account is kept out of the queues. But what if one payment does NOT get processed on the due date and there are other checks to be processed in the future? The account will not be automatically presented to a collector because we have post-dated checks pending. On the other hand, a payment arrangement would have picked up the missed payment and handled the situation based on the rules that were defined. The same logic applies to a series of credit card payments. It is for this reason that we have suggested that a payment arrangement is set up for all recurring payments. It allows you to control the process and allow smart codes to make decisions within the automated thinking you can set up. Try to look at the payment arrangement options as the "workflow driver", and the direct checks or credit cards as the "payment methods" - We believe that it will help everyone understand how the modules interact with each other.

  • For a payment system to be effective, it must be flexible. It must allow all options to be handled.

  • With regard to payment arrangements, the standard and non-linear options allow you to set up any form of recurring payment. For a single payment in the future, you can utilize the "Promise amount" on the account detail screen or a non-linear arrangement with a single payment. We recommend the latter option, because it allows you to send a reminder in the future!

  • With regard to the payment options, direct checks allow you to process a payment today and in the future, using a debtor's checking account. The future dates will be shown as post-dates and letters will be generated from within the post-dated checks module. The direct checks can be transferred to a check printing system or a clearing house such as EPP for which Quantrax has an interface. The post-dated checks that were created by the direct checks, can be electronically put into a payment batch, edited and posted.

  • With reference to credit cards, this is more complex because there could be several exceptions.

    • You can set up a single (one-time payment for today, using the credit card window)

    • You can set up the credit card window and link the credit card to a payment arrangement. This can be a standard arrangement or a non-linear arrangement.

    • If the down payment on a standard arrangement, or the first payment on the non-linear arrangement, is for today, the credit card logic will usually take place during nightly processing. If we are at the end of the month, you will probably want to run that credit card today. The system will pop a warning window saying that the date of the first payment is today, and that you can have the credit card process today and link the arrangement to the credit card. If the user accepts, the due amount is moved into the "One-time" amount on the credit card screen. That amount will not be picked up again. The reason we do NOT automatically set up the first payment on the credit card is because it is possible that the collector needs to review the information stored (e.g. the card may not have been used for several months.)

    • What if one payment does not get authorized and you want to process the payment again, 2 days after the due date? No problem. There is a function key from the credit card screen, for "adding an amount". This can be used even when the credit card is linked to the payment arrangement. It prompts for the one-time payment amount and will add that to the credit card window. It will be processed when the credit card interface is run the next time.

    • Once a credit card has been linked to a payment arrangement, you can send a letter before the due date, through the payment arrangement features. But in this case, it is not a reminder to pay, but a notification that a credit card will be used against the promise. For this reason, we have different letters that can be generated for credit cards, through the payment arrangements reminder feature.

    • What if you are using the credit card to make payments on an arrangement, and you want to always process the credit card a few days before the due date? This is also possible - Once the credit card has been set up for use with the payment arrangement, you can use the field to the right of "Use for payment arrangements" to set up the days in advance that the payment should be processed. (Days in advance is the title on the screen). This field is only displayed when the credit card is linked to the payment arrangement. This field is protected if the user does not have access to the "area" of payments within system security. This field must be used with caution, since it changes the payment processing date. This may affect the legal requirements since you may be required to notify the debtor before using a credit card for recurring payments. It is for this reason that there is additional "security" for this field.

We do understand that the options may seem somewhat complex. We feel that some complexity can be expected, because we are offering -

  • Flexibility
  • The ability to handle very different types of payment methods within the same system
  • Control of the queues based on the types of payments pending
  • The ability to meet the letter requirements for credit cards, payment arrangements and checks
  • The ability to make decisions based on the promise status of a debtor (e.g. On a payment arrangement that is performing or not performing)
  • Operational tools such as the automatic creation of payment batches, reducing the amount of manual work required

Quantrax Corporation Inc.
4300 Montgomery Avenue Suite 106
Bethesda, MD 20814

© Quantrax Corporation, Inc. 2008