Electronic Exceptions Take Exception to Manual, Paper-Based Processing

New Service Automates Exception Processing

When it comes to exception processing, MasterCard RPPS can read the minds of bill-payment originators, payment receivers, and billers, and they’re all thinking the same thing: How can I get rid of this manual, paper-based exceptions process? When payments that should go electronically have to go by paper, it’s slow and costly—painful for everyone from the consumer to the biller.

MasterCard RPPS now offers a simple and elegant automated solution to eliminate the pain: the Electronic Exceptions Service, introduced in late 2007.

“This patent-pending process is a logical extension of the MasterCard RPPS commitment to optimize electronic payments for our customers through a self-healing network,” says Mary Kelly, product leader, MasterCard RPPS.

“It’s a commitment that clearly distinguishes us from the competition,” she says. “The MasterCard RPPS Electronic Exceptions Service makes a significant delivery on that commitment, offering a potential savings of time, dollars, and customer service resources for participants.”

“We took an idea and ran with it,” says Phil Skaggs, vice president, MasterCard RPPS New Business Development. “While most people just thought that paper exceptions, the research, the manual scrub files were an inevitable fact of life in the payment process, the consequence of unavoidable consumer input errors, we at MasterCard RPPS thought differently.”

Automated from end to end

The service allows bill-pay originators to electronically transmit exception payments—those in which customer-entered information doesn’t track with biller data—to payment receivers and billers that have agreed to accept them.

On the receiving end, the biller or service provider generates a Notification of Change (NOC), which is routed to the bill-pay originator. This enables the originator to update its system automatically so that future payments can be routed cleanly.

“The technical requirements for implementation are pretty straightforward,” says Skaggs. “The service introduces a new format that includes a few additional fields.”

Benefits from end to end

The bumpy old exceptions process drains resources from everyone in the payment stream, but the Electronic Exceptions Service smooths the road to payment posting.

“The Electronic Exceptions Service can put all the exceptions headaches in the rearview mirror,” says Kelly. “Payments stay electronic, which means faster, cheaper, more accurate.

“The service makes it easier for our customers to do business and to keep their customers satisfied,” she adds. “It’s exactly why they choose MasterCard RPPS.”

Manual, Paper-Based Exceptions Process

MasterCard RPPS Electronic Exceptions Process

Consumer impact	•  Delay in payment posting  •  Possible late charges  •  Confusion and dissatisfaction  •  Expenditure of time to resolve any consequences	•  Faster payment posting  •  Not likely to know that payment was an exception  •  Corrected biller information (e.g., account number) provided for future payments
Bill-payment originator impact	•  Hard costs of $0.20 to $0.45 per item to generate payment by paper check  •  Potential additional costs for replacement of lost or misposted items  •  Resource-draining manual scrub process  •  Call center costs for assisting customers with delayed or missing payments  •  Exposure to 5% average return rate on checks	•  Paper-based costs eliminated  •  Replacement of slow, unreliable paper-based exception item process with electronic solution  •  Faster payment posting  •  Improved customer perceptions about online bill payment, and reduced customer service inquiries  •  Required NOCs, to help eliminate repeat exceptions
Payment processor/lockbox service provider/ biller impact	•  Delays in posting due to manual exception item handling and research  •  Expenditure of resources on manual reconciliation process and scrub file generation  •  Potential recurrence due to failure of banks or payment service providers to correct the error  •  Costly consumer inquiry calls made to biller  •  Consumer confusion and dissatisfaction  •  Exposure to 5% average return rate on checks	•  Potential reduction in paper lockbox exception fees  •  Required NOCs, to help eliminate repeat exceptions and reduce research costs  •  Faster payment receipt and reduced Days Sales Outstanding  •  Guaranteed funds via MasterCard RPPS  •  Improved customer perceptions about online bill payment, and reduced customer service inquiries

For more information

For more information on the Electronic Exceptions Service, please contact MasterCard RPPS Account Support at 800-207-7605 or rpps_helpdesk@mastercard.com.