Huntington Bank Hunts for Electronic Payments

Consumer credit department looks for another way to get payments in on-time.

Not everyone wants to make payments via the Internet. Huntington National Bank, a $27 billion bank headquartered in Columbus, Ohio, wanted to provide its auto loan and lease customers with an additional payment channel-a fast, efficient way to send guaranteed, immediate payments. The solution was ExpressPayment from MoneyGram, based in Phoenix.

Huntington National Bank had many offers from vendors that provided solutions to process electronic payments primarily for consumer products such as auto loans, leases and second mortgages. But the bank's vice president of consumer credit adjustments, Robert Lemke, says that the proposal from MoneyGram had the lowest cost with the same capabilities that other companies' products contained.

"We were offered different products at different costs and MoneyGram gave us the option that would get payments into the bank immediately," says Lemke.

Customers Want E-Payments

The bank needed this solution so customers who were late with their payments could submit their payments electronically. Previously, customers primarily used pay by phone. ExpressPayment does not replace the capability for customers to make payments by phone; it simply gives them another option to make payments, according to Lemke. He said the ExpressPayment feature filled in a gap that the other channels weren't providing. The electronic payment feature provided guaranteed payments on a timely basis. With this new solution, the bank provides its customers with the option to pay their bills through an electronic transaction that clears their debt immediately.

The ExpressPayment solution has more than 18,000 nationwide locations, so customers can locate a payment center and deliver their funds on time to Huntington Bank. This allows the bank to lower its collection time and receive same-day guaranteed funds, as well as revenue from its customers.

The bank's corporate supply management team is the group that began the request-for-proposal (RFP) process. The team decided in early 2001 to go with MoneyGram's product after issuing an RFP to the different vendors that were offering similar products. Lemke reports the IT team did an analysis and ranked those vendors.

Among the factors driving Huntington's selection of ExpressPayment included the bank's desire for enhancements to its current payment features and capabilities. It also required a provider that could interface with the bank's transactional files. Another reason the bank went with ExpressPayment was because of automated functionalities, such as communicating with the bank's collection agencies, directing customers to agencies, as well as the capability to verify if a payment was received by those agencies. ExpressPayment verifies those funds and insures that the payment went through. The system's implementation took 90 days, Lemke says.

According to Lemke, with ExpressPayment, employees of the bank do not have to manually touch transactions. Other than receiving payments, the system also allows the bank to track delinquencies and make sure that the department is receiving payments in a timely manner.

Good Service, Good Price

Lemke says the change was necessary because the bank needed to provide another form of payment for customers.

"This is what we want from our file transfers," says Lemke. "This is what we need to send the guaranteed funds and wire them."

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FAST FACTS

INSTITUTION: Huntington Bank (Columbus, Ohio)

ASSETS: $27 billion

BUSINESS CHALLENGE: Offer an electronic bill payment system to improve customer service.

SOLUTION: Phoenix-based MoneyGram's ExpressPayment system

KEY QUOTE: "The price was very insignificant and it was a commitment from our technology group we were able to take."