WACHOVIA'S INTERNATIONAL ACH SIMPLIFIES CROSS-BORDER FOREIGN CURRENCY PAYMENTS

Virginia Child Support Enforcement and its Clients Enjoy Immediate Benefits

Working with Wachovia to implement international ACH (IACH) is yielding good results for the Virginia Child Support Enforcement agency and its international clients.

International Payment Challenges

Like many organizations, the agency lacks an efficient way to make repetitive low-value foreign currency payments.  Typically the agency pays custodial parents located outside of the U.S. by check, denominated in U.S. dollars and drawn on its U.S. bank account.  Besides paying retail FX rates, clients pay steep fees for currency conversion and check collection, and funds are delayed for weeks.  According to Cheryl Parker, Electronic Funds Transfer Manager for Virginia Child Support Enforcement, “Given the low value of the payments and the high fees, custodial parents can literally end up owing money.” 

Checks can be an expensive and error-prone way to make cross-border payments. They must be issued, mailed, reconciled, and protected against fraud.  Extra postage for foreign mail adds to the cost.  As a disburser of approximately $47 million in child support payments per month, Virginia also devotes significant resources to issuing stop payments, reissuing lost checks and investigating checks that are outstanding for more than six months.  Address management exacerbates the problem of lost checks, since formats vary by country and addresses change frequently.  “Ensuring that clients receive payment is like trying to hit a constantly moving target,” explains Parker.   

Faster, Better, Cheaper

Since the agency began piloting IACH to Canada in January 2006, nearly half of its clients have chosen to participate in the program.  Implementation takes minutes and Wachovia’s Web-based solution is easy to use for securely initiating payments, says Parker.  Clients can review payment status online, and the agency’s own payment research is greatly simplified.

“The solution ensures that custodial parents quickly receive payment without the hassle and cost associated with check collection and currency conversion,” says Parker.  “I can’t say enough good things about this solution.  Our clients are getting something for nothing.  Within three (i.e. Monday for Wednesday value) business days of initiating a payment electronically, funds are safely, conveniently and cheaply deposited in Canadian dollars into a client’s account.  So few solutions are truly a win/win.   It’s almost too good to be true.” 

According to James E. Clark, SVP, Wachovia Treasury Services, Product Management, “IACH is an ideal cross-border payment solution for those organizations with repetitive low-value payments that wish to avoid the complexity and cost of establishing in-country local currency accounts.  Wachovia is committed to providing cost-effective global solutions that support the evolving requirements of our clients.”

Stepping Stones to Simplified Payments

According to Parker, “The agency has long recognized the value that electronic payments could bring to our international clients and it has been our intent to replicate internationally the success that we’ve experienced with our domestic direct deposit program.  We are eager to leverage IACH as it becomes increasingly available with other countries to better serve our international clients.”

Working with Wachovia, the agency is extending the pilot to Europe in April 2006.  “Wachovia is seriously committed to IACH, and we are very pleased with the bank’s responsiveness to our needs,” says Parker.  “As we continue to transform our process for global child support payments, we are confident that Wachovia can support us at every step.” 

Wisdom is everywhere.  Uncommon wisdom is knowing how to apply it.

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