Simpler ways to pay

The Co-operative Bank’s comprehensive Payment Collection Service is helping large public sector organisations to cut costs, without cutting corners

In the June 2010 Budget the Chancellor, George Osborne, announced the Government’s intention to slash public sector spending by 25 per cent, leaving public sector organisations facing increased pressure to improve their provision with ever decreasing revenues.

Some organisations are still wondering how this target can be achieved without having a direct impact on their capability to deliver the wide range of frontline services so many people rely on. But in the quest for efficiency many organisations, including registered social landlords and local authorities, have already turned to The Co-operative Bank for help.

Seeking a more cost-effective way to manage their cash payment operations they found the answer in The Co-operative Bank’s Payment Collection Service.

“The Co-operative Bank has a dedicated and regionally based Public Sector Team and, with our origins in The Co-operative Movement, we also have a strong synergy with the specific challenges faced by the public sector and the unique way in which it operates,” says Stuart Nicholson, the bank’s Manager within its Public Sector Banking Unit. “Our expertise has enabled us to develop a range of solutions, such as our Payment Collection Service, that meets the precise needs of this sector.”

The Co-operative Bank’s Payment Collection Service is a fully automated payment system that is helping organisations to achieve the ultimate goals of saving money, reducing administration and improving levels of customer service.

Part of an expansive portfolio of specialist provision for the public sector, the Payment Collection Service has helped to establish the bank as a preferred provider and enabled it to grow this section of its customer base by 80 per cent during the past 10 years. Over 250 local authorities and housing associations across the UK use the service with almost 50 new business wins in the last two years alone.

One of these customers is CDS Co-operatives, a housing association that provides services to 3,500 homes on behalf of 46 independent primary housing co-operatives. “We were looking to introduce new methods of payment for our clients and we went out to competitive tender,” says Stephen Brown, administration manager and society secretary at CDS.

“We were attracted to The Co-operative Bank solution because it offered all the new methods of payment we were seeking to introduce in one contract, and as a co-operative organisation we were keen to support another co-operative organisation that shared our values.”

Before signing up to the bank’s Payment Collection Service, CDS’ customers could only pay their rent by cheque, standing order or using a payment card, which was only accepted at a limited range of outlets.

Uniquely, The Co-operative Bank is the only provider that has a payment collection agreement with all three major payment networks; The Post Office, PayPoint and P ayzone. This provides access to a nationwide network of over 50,000 payment outlets, thereby offering organisations and their customers more choice and convenience.

“With The Co-operative Bank solution we’ve been able to introduce a payment card that can be used in all three payment networks, giving our customers much more flexibility in where they can pay their rent,” says Brown. “We’ve also been able to introduce Direct Debits and payment by debit card over the phone or on the internet. This has given much more flexibility to our customers in how they pay their rent and service charge.”

Organisations can order payment cards from the bank’s fulfilment service, or print their own bar codes. Customers are then issued with a card or bar-coded bill, which they can use to make their payments at any Post Office, PayPoint or Payzone agent. The organisation receives one daily consolidated payment transaction data file from the bank which can be loaded onto their computer system, and can access cleared funds in their Co-operative Bank account no more than four banking days after the day of transaction.

And the ability to tailor specific elements is supported by a traditional Relationship Banking ethos. This means customers have access to an experienced and dedicated Relationship Manager and a Payment Collection Service Team who work with them every step of the way to implement the new payment system, which can result in mutual benefits for the customer and the bank.

“At The Co-operative Bank we have a Relationship Manager and the advantage of this approach is a single point of contact. As the project has progressed we had formal review points that enabled us to feed back as to how things were going and adjust the programme to suit,” says Brown. “It’s also helped the whole thing run much more smoothly than it might otherwise have done and we’ve had the opportunity to contribute ideas for developments for the future.”

One idea, currently at the initial stage, is to find a way of allowing customers to pay by text. The Co-operative Bank is looking at how it can develop a solution and hopes to be able to introduce it in the near future. For Brown the major advantage will be “being able to offer an additional service, all within the single contract.”

The Co-operative Bank is also the only supplier to be awarded access to the Official Journal of the European Union’s (OJEU ) contract to provide payment collection services to Procurement for Housing (PfH) members. The agreement required the bank to fulfil very rigorous criteria, but it gives customers a guarantee about the quality of provision and sets the benchmark for complete transparency with respect to transaction limits, clearance timescales and transaction pricing.

Brown points out that transparency was essential to CDS . “Another advantage of The Co-operative Bank solution is that our branding appears on all of the paperwork; the customers’ bank statements and the website pages that customers see, which means they know exactly who they are paying. But the bank deals with all the security and technical issues associated with ensuring that our customers’ information is stored in a secure way, so we can be confident that potential data protection issues are dealt with.”

Public sector organisations have always sought out financial partners that can offer a comprehensive portfolio of products and services, supported by knowledge and expertise. But following the recent events in the financial markets, working with a bank they are certain they can trust has become a key priority. So it is to The Co-operative Bank’s credit that in this somewhat challenging market, it continues to welcome an increasing number of new customers who have lost confidence in their competitors, and are benefiting from a traditional approach to relationship banking.

In fact, it is largely The Co-operative Bank’s prudent and responsible lending policy, which has underpinned its financial strength, and enabled it to emerge from the financial crisis with its reputation as a trusted provider intact. This is evident from the customers who have entrusted the bank with significant deposit balances. The total value of deposits placed with The Co-operative Bank by its corporate customers rose by 120 per cent in the last year and now stands at around £3 billion – a record level. In addition, customers have the peace of mind knowing they are working with the only UK high street bank that has a customer-led Ethical Policy.

For Brown, the benefits of being a customer couldn’t be clearer. “The Co-operative Bank adds value because they listen to our ideas,” he says. “They’ve given us a solution that’s economical. It’s also transparent in that our branding appears throughout. We now have multiple methods of payment through a single contract. And finally, it’s a real advantage for us to work with an organisation that shares our principles.”

For more information about The Co-operative Bank please contact Stuart Nicholson, Tel: 0161 829 5175 Email: stuart.nicholson@cfs.coop Web: www.co-operativebank.co.uk/corporate