PNC manages complex portfolio conversion with MasterCard RPPS solution Error-free conversion via MasterCard RPPS smoothes the process Paced with a challenging portfolio conversion, Mark Voionmaa, vice president and senior product manager, Treasury Management, PNC Bank, N.A., did the smart thing: he called his trusted partner MasterCard RPPS for help. PNC Bank had won a contract with a large credit card company to service its installment loan (IL) portfolio, whose 675,000 accounts were commingled with the credit card portfolio, with approximately 9.5 million accounts. "The idea was to move the loan origination, loan servicing, statement mailing, payment processing, and some collections to PNC," said Voionmaa—without inconveniencing end customers. Conversion obstacles The first phase of the process, which ran from January through May 2006, was to convert 80% of loans (approximately 420,000 accounts) to the PNC system, with the remainder following later in the year. Both the paper and electronic payments presented major issues. On the electronic side (this case study's focus), the previous servicing bank was getting feeds from multiple sources: Another financial institution, with payment data from MasterCard RPPS and online processors with direct feeds to the institution Processors with direct feeds to the bank Online originators with direct feeds "The major issue was, how do we keep track of this thing once we flip the switch, without turning every electronic payment into a paper check, or having everything misrouted?" said Voionmaa. "That's when I called [MasterCard RPPS]." Managing the flow To get payments flowing to the right places and keep exception items to a minimum, PNC had to find solutions to Separate and correctly route credit card and IL payments Separate and correctly route converted and nonconverted IL accounts Inform consumers, originators, processors, and walk-in payment providers about the new account numbers associated with converted accounts The first step was to create, prior to conversion, a new biller ID at MasterCard RPPS for the IL payments. (Credit card and IL payments had been coming in on the same biller ID.) To consolidate all online payments and centralize the conversion processes, originators were notified that at conversion, they would begin sending their payments through MasterCard RPPS. (A single online bill payment provider continued to transmit payments through a direct feed—an arrangement Voionmaa argued against.) In addition, walk-in payment providers were also directed to transmit payments through MasterCard RPPS at conversion. This helped PNC maintain same-day cutoff for walk-in payments by effective-dating payments back to the originator ID. To sort converted and nonconverted IL payments, PNC distributed an old number/new number file to the interested parties: MasterCard RPPS and the single online bill payment provider. Flipping the switch At conversion, MasterCard RPPS began sorting payments automatically, changing the account numbers on converted IL accounts and sending those payments to PNC. The remaining payments were routed to the credit card company and the original bank. After the conversion, MasterCard RPPS began sending out Notification of Change alerts so that originators, processors, and providers could update their systems. For consumers and originators, the conversion was entirely transparent. "The originators had to change nothing," said Voionmaa. He added: "The client was really pleased. They had tried this particular conversion two or three times [without success]." The MasterCard RPPS conversion process went exceptionally well, with no misrouted payments, Voionmaa noted. The single online bill payment provider, however, generated 5,000 rejected transactions that had to be manually processed. Voionmaa's advice to those facing a conversion process is simple: "Plan. Plan. Plan. Simplify. Simplify. Simplify." He added: "It's important whom you partner with." For PNC, said Voionmaa, MasterCard RPPS is the network to rely on for the best solutions to complex issues. RPPS Update Newsletter Main Back to Top