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Monthly Credit Card Payments
AT&T Universal Card has recently taken on the challenge of offering its card members the option of direct debit for the payment of
their monthly credit card bill. Automated Bill Payment is not a new concept, particularly in the utility industry where customers are obligated to pay in full the amount outstanding on their account each month. With
a credit account, however, customers have a choice of paying the minimum amount due, the full amount, or any amount in between. And for most credit card users, the payment choice varies from month to month depending
on individual circumstances. This is most likely the reason why participation in this type of program is still very low. According to Bernie Lyons, Treasury Advisor with AT&T Universal Card, approximately 1%, or
80,000 people with payments totaling $8.5 million, are participants in the Direct Debit Program.
Although Treasury enjoys the predictability and the availability of funds the Direct Debit Program offers, the Program was
implemented primarily as a
convenience to card members. When AT&T Universal Card began evaluating direct payment options in early 1995, AT&T's telecommunications division had an automatic bill payment program in place. However, customers of this program had only one payment option -- pay the statement amount or have the service discontinued.
After evaluating the cost of modifying the existing application to
accommodate varying payment amounts and adding Voice Recognition Unit (VRU) capability, AT&T Universal Card decided to pursue development of their own customized application. Six months later, the company had their application interfaced directly with the billing system and generated the direct file transmission to the bank utilizing the ACH network. Although AT&T will accept this kind of payment, the method is not yet actively marketed.
"The day-to-day file transmission process runs very smoothly and we rarely have an issue with the bank," states Bernie. Return items from
the bank are also handled through a daily file transmission. Currently, AT&T is trying to take the Program one step further by automating the handling of this transmission
based on the returned item's reason code and the account's customer number.
In addition to the technical challenges, AT&T Universal Card had to overcome the obstacle of internal awareness and understanding . Treasury,
Marketing and Information Systems all had to be educated in order to make the Program a success. According to Mr. Lyons, "The Marketing group actually heads up the project team because to AT&T the Direct
Debit Program is first a value to customers and second a benefit to operations."
The Marketing group is now working with the Collections department to offer the Program to card members having trouble paying on time. Potential
card members are solicited for the Program through the application form and current card members are solicited through statement inserts.
A new program in the works, named "Click to Pay", will offer card members the opportunity to review their statement on-line. They
will then have the option of enrolling in the Direct Debit Program and initiate the first ACH debit against their bank account. The new application will interface directly with AT&T Universal Card' s existing
Auto Pay software. By offering on-line access, the Marketing group hopes to reduce the number of calls to the Service Center while increasing the number of card members enrolled in the Program.
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