Online Collection Series: Online Resources Combines Collections and Processing

Online Resources Corp. (Nasdaq: ORCC) moved into the online collection arena after several years serving the online, and later, the payment needs of financial institutions. The company began providing remote banking services in the late 1980s, before the majority of people had discovered the Internet. By the early 1990s, a few consumers and numerous banks were starting to migrate from privately developed programs to commercially available systems, giving rise to Online Resources’ online banking program.

A billing element was a natural evolution for the company, which started in the business in 2005, then enhanced its presence through the purchase of Princeton eCom in 2006.

Online Resources expanded into the collection business in 2007 through its acquisition of Transaction Solutions.

Online Resources now offers Virtual Collection Agent, an online collection technology that four of the 10 largest U.S. card issuers, financial institutions, collection agencies and others use to help them recover funds from debtors.

“Thirteen of the top 20 receivables management companies are our clients,” says Bill Kinnelly, senior vice president of marketing for e-commerce services.

The product users (debtors) include the hard-to-reach and high-balance accounts, according to Kinnelly. Almost half of the users had not had a right-party contact within the last six months (if ever) and two-thirds of them were late stage or post-chargeoffs.

According to Kinnelly, the main benefit in the post-chargeoff environment is enhanced collections. “Virtual Collection Agent produces more than 10 times the result of a live agent for each dollar invested.”

According to the company, one national collection agency working pre- and post-chargeoff debt had liquidation rates via the Web at three times the portfolio average and payment rates that were four times the average.

The online application enables the collecting party to work with Online Resources to ensure it has the same look and feel throughout the process. If a branding element is changed (e.g., logo is changed), it changes throughout all customer-facing screens. Other elements can also be changed through various manager screens on the back end.

Kinnelly says that Virtual Collection Agent’s ability to combine the debt collection and the payment processing in the single application is a major element of what sets it aside from other online payment technologies. Other companies offering online payment solutions don’t have the payment processing engine, so that portion of the process needs to be handled through a third party, Kinnelly explains. Online Resources is the only vendor of online collection products that is PCI compliant and is audited by banking regulators, he notes.