FYI, FAQ sheet from Priority 1.
Thank you for your interest in the Electronic Funds Transfer services of Priority One Electronic Commerce Corporation. The following is a compilation of the most the Frequently Asked Questions (FAQ's) about Priority One's services.
Priority One was founded in 1996 by Sidney Lieberman of West Palm Beach, Florida. Mr. Lieberman, an entrepreneur since the early 1950's, has founded or acquired upwards of twelve companies in his career and now serves as Chairman and CEO of Priority One. Mr. Lieberman is also the controlling shareholder of this young, dynamic company.
What separates Priority One from it's competitors in the emerging growth industry of Electronic Funds Transfers (EFT's)?
First and foremost, Priority One has the only system that can accept uploads of both ACH and Credit Card debits in the same file. Our software then formats this information into the appropriate format for submission to the Federal Reserve or the merchant account provider. Our competitors that can process both ACH and Credit Card transactions normally require two separate transmissions and two separate protocols. This also requires that the customer learn two distinct systems. Priority One has the only system that can process both ACH and Credit Cards in one transmission by the client…ONE SYSTEM…ONE STEP…ONE LEARNING CURVE!
Second, direct debiting and crediting done through our proprietary Bill Collect ™ and Mortgage Collect™ systems is our only business. This focus has allowed us to develop and refine our system during the past three years to the point that we can provide an extremely user friendly interface. We have focused on improving our system without requiring our customers to learn anything new. In other words, we change so our clients don't have to!
Third, our system is so simple to use that most new customers are up and running within hours as opposed to days or weeks and sometimes months that our competitors require. We do not sell software and new clients do not normally have to change any of their hardware configurations. Our only requirement is that the client has the ability to transmit a "Comma Delimited Text File" to our servers via a secure telephone line or Internet connection.
Priority One is a young company with a vision for the future of the automated collection of receivables and disbursement of payables. We have spent nearly three years developing a system to process all types of receivables and payables electronically and automatically. During the years 1996 and 1997, we worked in a beta stage with about two dozen customers to prove the software system could handle every conceivable condition and problem of data presentation. Our customer base now continues to expand and client transactions have been growing exponentially. Those clients who used our services in January 1997 are now collectively providing us with over eleven times the volume than in the same months of the prior year. We are also proud to state that to date no client has ever switched from Priority One to another processing company.
Priority One has a strong management team in place who have developed a number of strategic partnerships to provide additional services and gateways for our customers as their needs arise. Priority One is on the cutting edge of receivables and payables automation. At this point in time, no one else does exactly what we do. We plan to continue to provide our clients with the best service and the highest commitment to excellence.
Our commitment to excellence is manifested by our recognition in various trade publications both domestically and internationally. Priority One has received global recognition for its articles on EFT and Electronic Commerce published in the March 1997 issue of Electronic Commerce and in the Swiss publication Electronic Markets in August 1997.
Priority One is also the only company in the world of electronic Funds transfer (EFT) who publishes a regularly occurring newsletter. The newsletter, Electronic Payments, is distributed electronically as a public service and is free of charge. Priority One circulates Electronic Payments to over 8,000 subscribers in 11 countries. It is also distributed by the Internet Banking newsgroup and the EDI-L newsgroup, which increases circulation to in excess of 11,000.
Again, thank you for requesting Priority One's publication of the FAQ's of EFT's. Should you have any additional questions, please don't hesitate to contact us directly.
Sincerely,
Thomas K. Goldman
President
Priority One Electronic Commerce Corporation
FAQ's
(Frequently Asked Questions)
General Questions:
Can you provide a general description of Priority One's direct debit/credit processing product or service?
Priority One's Bill Collect™ and Mortgage Collect ™ systems work very simply. Our client obtains authorization from their customer to debit either a checking account or a credit card account for up to a specified dollar amount ceiling (this is essential for varying debit amounts). Our client then enters the monthly invoice amount into their existing accounting or invoicing system.
Once entered, they export their file into a Comma Delimited Text file that is then uploaded to the Priority One server. Our software system then formats the data into the appropriate ACH or merchant account provider format.
The ease of our system translates into an extremely short learning curve for the data processing departments of our clients. Most clients are functional within hours as opposed to days, weeks or even months for our competitors' systems.
Our system will allow our customers to easily, effectively and in a time sensitive manner begin automating both ACH and Credit Card receivables. The majority of Priority One's clients are telecommunications companies, internet service providers, charitable groups, fitness companies, alarm companies and other service providers. Our largest client is a telecommunications company.
The benefits to our clients when they use either the Bill Collect™ or Mortgage Collect™ system are numerous:
1. Reduced cost compared to traditional paper invoicing.
2. Monies are actually received on the due date..
3. Electronic audit trails.
4. Reduced "paper overload."
What is your Experience and Transaction Volumes ?
As a privately held company and for the privacy of our clients, Priority One does not release sales volumes, nor do we sell or disclose customer lists for any reason.
The following, however, is our volume history in a relational form that uses January 1997 as a base of 100:
Jan 97 = 100 Jan 98 = 557
Feb 97 = 108 Feb 98 = 1051
March 97 = 105 March 98 = 1057
April 97 = 116 April 98 = 1079
May 97 = 100 May 1998 = 1057
June 97 = 112 June 1998 = 1072
Since Priority One processes transactions using computers and networks, how much down time have you experienced?
We have experienced no down time on our system. Built in redundancy eliminates down time caused by system malfunction, power outages or phone company problems. In addition to our primary location in Akron, PA we have backup systems in place in Lancaster, PA and Quakertown, PA. Our redundancy locations provide full operational capability if required.
How extensive a history file do you maintain for transactions? How it can be accessed?
A complete file history is archived on our system. A client's transaction request can contain both ACH and credit card debit or credit transactions.
At the time of processing, the Priority One system creates separate response files for the ACH and credit card items. The response files consist of deposit records and the exceptions file for returns and/or corrections as reported to Priority One. Immediately after processing, the response files are available to be downloaded by our client.
What experience does Priority One have with direct debit/credit programs?
Direct debit/credit and credit of our clients' customer checking or credit card accounts is our only business. Because we specialize in direct debit/crediting and crediting we have made our system more advanced than any competitors in terms of what it offers and in its ease of use.
What is Priority One's view of future ACH/electronic commerce growth and your part in that growth?
Current growth levels for ACH transactions among the top 6 institutions in the nation average 20% annually. Priority One on the other hand has experienced phenomenal growth in its account volumes. Historical transaction volume increases are as follows:
"Old" Clients: (those with accounts opened prior to Jan 97)
1st Quarter 1998 vs. 1st Quarter 1997 >>> Volume Increased 824%
2nd Quarter 1998 vs. 2nd Quarter 1997 >>>Volume increased 967%
"New" Clients: (those with accounts opened after Jan 97)
1st Quarter 1998 vs. 1st Quarter 1997 >>> Volume increased 1061%
2nd Quarter 1998 vs. 2nd Quarter 1997 >>>Volume increased 1709%
We feel that the use of pre-authorized debits (both ACH & Credit Card) will grow in much the same manner as the use of ATM and Debit cards.
Since most institutions view pre-authorized debit transactions as an ancillary business whereas Priority One focuses solely on these types of transactions, we feel that Priority One is extremely well positioned to take advantage of this growth.
Product Questions:
How does a customer's bank account receive information about direct debit/credits that have been successfully processed by Priority One, and when will the account will receive good funds?
All successfully processed ACH items are in the client's account within 48 hours after transmission. ACH exceptions (returns) are received and reported within 48 to 72 hours following the effective date and are posted immediately in the client's account.
Credit card exceptions become known immediately after the time of transmission and are downloaded to the client's account. American Express and Discovery Cards sometimes require 72 hours or more to generate exceptions.
How long has the current version of Priority One's product been in use?
Priority One's system was first developed in 1996. Since then we have incorporated a number of enhancements and upgrades. We modify and upgrade our system as necessary while maintaining the same process for our clients. We make the changes seamlessly so there is no interruption in our clients' method of operations.
Are there any plans to change Priority One's product/service in the next two (2) years?
Priority One does not plan to change its Bill Collect ™ or Mortgage Collect™ system except to accommodate new technologies and standards. The goal is to make these changes seamless, i.e. our client will see no difference in how they process through Priority One.
We do plan to introduce a Bill/Document Presentment service. This service will be able to deliver bills, documents, contracts, etc…via the internet. The service will be able to certify identity of sender and receiver.
What is Priority One 's capabilities to track payment details?
Priority One archives all transactions, deposit and exception files. In other words, we "track" all activity and make it available to our client at no cost. The client benefits by having an off-site audit and tracking system which can help reconstruct information in the event of data loss on the client's side.
What audit features does Priority One offer with its service?
On request, Priority One can provide a "zero" audit report. This means we chronologically list all the activities related to a specific file with the results by date. Once again, there is no additional charge for this service which is available upon request on a 24 hour x 7 day basis.
Again, this also functions as an off-site depository for a client's financial transaction records.
What happens when a customer's bank account does not recognize a direct debit/credit processed by Priority One for one of their clients?
When the customer's bank rejects a direct debit/credit, Priority One receives a report, and an exception file is created. If the credit card processor rejects a direct debit/credit an exception file is created at the time of transmission. Our client should first attempt to rectify the problem with their customer and then make the determination whether or not to submit the data a second time.
Does Priority One provide an ACH warehousing capability for their client's direct debit/credits? If so, what are the maximum warehousing periods and how long can changes still be made before debits are released from warehouse status?
Priority One can warehouse client files for a period of 30 days. Priority One does not accept the responsibility for changes nor will we make changes to a client's transmission. If changes are required, the client informs Priority One to delete a warehoused file and then submits a new file with the appropriate changes or corrections. Since the warehoused file was not transacted, there is no charge to the client for changes.
Priority One does not charge for any changes made by the client to a file. Competitors will normally charge $3.50 and more for any changes made to a customer's files.
Can Priority One accept any input format, including nonstandard record formats, and convert them to a standard ACH format?
Our clients enter our system with a comma delimited text (CDT) file format. CDT can be exported from almost all software that is in use today. By using CDT we have eliminated the need for our clients to make expensive software and/or hardware purchases or changes.
What are the procedures, reports, notification times and methods, etc. associated with returned items?
As soon as Priority One is notified of returned items, an exception file is created and placed for retrieval by the client. Files are created as often as needed and can be accessed by the client 24 hours per day, 7 days a week.
How does Priority One handle notifications of change?
Any changes made to a client's files are automatically accepted by our system at the time of the next file transmission. Priority One needs no manual notification of change to its customer accounts.
In other words, the client merely makes the changes on their system and sends the changed file to Priority One. There is no need for the client to create a totally new file .
Does Priority One provide any electronic check presentment (ECP) services to enhance returned item processing for direct debit/credit programs?
Priority One does not provide any electronic check presentment services per se. We do offer the client the option of resubmitting the transaction in a future file or asking us to prepare laser checks for presentment. Laser checks, if requested, are labor intensive and require manual data entry on Priority One's part. The cost of preparing a laser check is $2.50 per check.
Does Priority One have access to ACH members, ABA transit routing numbers, etc.?
We have resident on our system a database with bank names, locations and ABA routing numbers.
How can Priority One help correct ABA transit routing numbers for closed or merged institutions?
We receive reports through the ACH channel of invalid or changed ABA numbers. These are then incorporated into an exception file so client can change their database.
How does Priority One verify the accuracy and suitability of potential receiving points for direct debit/credits?
Priority One can prenote any or all accounts. Prenoting is the act of submitting a "zero balance" transaction to determine validity of ABA and account numbers. Prenoting requires six to ten days to be effective. However, "live" processing produces the same result and is reported to the client in an exception file.
How long is Priority One's normal turnaround time for file inquiries?
Our clients have the ability to access their files 24 hours a day, 7 days a week. If Priority One technical or customer service is required to resolve a file inquiry, it can normally be resolved within minutes.
Communications and Security Questions:
What are Priority One's file delivery and transmission deadlines? For instance, when is the latest a client can submit a file for direct debit/credit on a Friday?
For funds that are to be debited on Friday the deadline would be Wednesday at 12:00PM EST. This is a limitation placed upon us by the Federal Reserve who requires two business days (Thursday & Friday) prior to the posting of debits on Friday evening in the appropriate institution.
Can transactions be transmitted to Priority One by personal computer?
Transactions can be submitted to Priority One, in either of two ways, from any computer with the following capabilities:
A. Format One: Direct Dial Up Server
Requires a 28.8k or higher modem connection and an error correcting terminal program such as Procomm. Provides user with simple file access, 24-hour system access, and manual uploads/downloads of files, and access to transaction reports.
B. Format Two: Intrapay Internet Based Server
Requires a 28.8k or higher internet access and Java enabled browser. Provides user with multiple file access, 24-hour system access, automatic uploads/downloads, internet based access to journals and reports. Also provides middleware software application interface, EDI interface and customizable user interface.
Priority One is unique in that it offers two separate gateways in order to accommodate customer needs. Competitors only offer one type of transmission environment.
What controls does Priority One use to prevent file loss, duplicate transmissions, acceptance of duplicate transactions (debits or returns), or partial transmission loss?
Priority One's system features input error recovery and file validation which rejects any file that is incomplete, damaged or duplicated. In addition, individual items within a file maintain their relationship to the original file as they move through the processing system. This includes debits, credits and returns.
What are the communications protocols that Priority One uses to transmit files?
The Direct Dial Up Server uses standard Xmodem, Ymodem, and Zmodem file transmission protocols.
The Intrapay server uses standard Internet http/shttp, xml/x12 protocols in addition to the proprietary SetX secure electronic transmission exchange protocol which protects data as it transfers across the internet.
What are the options offered by Priority One to transmit files (e.g., direct, Internet, Extranet)?
Priority One offers customers the option and ability to securely transmit files in four (4) ways:
1. Direct dial up via dedicated phone line.
2. Internet
3. Intranet
4. Extranet
The ability to transfer files in four separate environments is unique to Priority One. Our competition normally only offers one option to its customers.
What system security does Priority One use specifically relating to direct debit/credit programs?
Both the Direct Dial Up and Intrapay payment processing systems use a unique client password and user ID's to grant authorized access to the system. Priority One is also in the process of adding a second level of protection called "Dynamic Session Password Authentication." Every time a file is downloaded to the system, the system will generate a new dynamic password that must then be used in conjunction with the static password and user ID for the next processing session.
Additional security is provided by the SetX system that implants a unique User ID in the customer's computer, which then automatically validates the gateway address and physical location of the downloading system to verify that the transmission is being generated from the location of an authorized user.
What options or features does Priority One offer that deals with file encryption and/or authentication?
Priority One, through the Intrapay system uses a private SetX transaction protocol that is much more secure than public encryption methods. However, our private SetX protocol can be configured to incorporate the public encryption protocols of RSA/DES56, SET and SSl encryption methods.
Marketing and Customer Support Questions:
How can Priority One provide assistance in marketing preauthorized debits to its clients customers?
Priority One will work closely with its client's sales and marketing teams to develop an appropriate program when requested to do so.
The majority of our clients have used legal counsel (to interpret state disclosure requirements) and their advertising agencies to develop a "conversion program."
Methods that have been successful include:
1. "statement stuffers." These would be used to solicit existing customers to convert to a pre-authorized debit program.
2. Require new customers to choose a pre-authorized debit option (either ACH or Credit Card).
3. Require participation at the time a contract is renewed.
4. Product or service discounts for participation.
Generally, what percentage of current and new customers will convert or opt for a direct debit/credit program?
For current customers our experience indicates that initially 5 to 10% of a client's existing customer base will convert in the first six-month period. With continued solicitation we have experienced conversions to rise as high as 30 to 50% in one year's time.
For new customers, accepting a direct debit/credit program will depend on the options they are given. If direct debit/credit is required, then the percentage of acceptance will be 100%. An example of this is "American Online" which requires direct debit from a credit card and has still managed substantial growth in their subscriber base.
How long does it take to convert most of the customers?
The answer here lies in the client's desire and commitment to the conversion process. The more effort put forth and the stronger the position taken the less time it will take to convert customers.
What installation support can Priority One provide for its new clients?
Priority One's basic service is supported by telephone from 7:30 AM to 3:30 PM EST and by a 24 hour x 7 days paging service.
Priority One can also provide group system operator training at its facility, and onsite technical support and system training, although experience indicates that onsite training is normally not necessary.
What level of training can Priority One provide for new clients, and what are the costs?
Priority One can provide system operator training at its facility and onsite technical support and system training.
Pricing is dependent on account volume and contract terms to be negotiated.
Our charges for onsite training service is $1,000 per diem plus travel, lodging and other out of pocket expenses. Onsite training has not normally been required due to the user-friendly nature of our system.
What is Priority One's customer service/help desk capabilities, including hours during which it is available?
The Priority One customer service/help desk is staffed Monday through Friday from 7:30 AM to 3:30 PM EST. In the event service is required after office hours, a telephone pager number is provided. Pages are normally answered within 30 minutes. Most problems that might arise can be rectified through telephone consultation and do not require onsite support.
Our system's ease of use benefits the client in that most problems which might arise can be dealt with quickly and efficiently thereby greatly reducing potentially costly downtime.
Pricing Questions:
How can Priority One save our company money in processing transactions?
The National Automated Clearing House Association (NACHA) in a study published in April of 1995 estimated the cost of sending, collecting, posting and invoicing customers to range from $3.00 to $6.00.
Therefore, if a customer processes 10,000 invoices a month, his monthly cost for paper invoicing would range from $30,000 to $60,000. Using the Priority One Direct Dial Up system he could reduce his cost to $3,095 a month or less than $0.31 per transaction!
What are the costs to use Priority One's electronic commerce payment services?
Pricing is primarily a function of transaction volume and the particular Priority One "gateway" chosen. Our basic comparative gateway prices are as follows: (All pricing is applicable "per reporting unit." A reporting unit is defined as any entity which maintains a separate accountability identity).
Direct Dial Up Intrapay
One Time Platform Set Up Fee $ 100.00 $ 295.00
Monthly Maintenance Fee 95.00 95.00
Batch File Processing Fee 0.00 1.30
Per Transaction Fee* 0.30 0.30
*includes ACH, Credit Card and Prenote transactions
Returned Item Fee 4.00 4.00
Report Fees Currently None Currently None
File Change Fees Currently None Currently None
Dose Priority One offer any price breaks for volume processing?
Total transactions include ACH, Credit cards and Prenotes.
Direct Dial Up Intrapay
First 10k transactions/month $0.30 each $0.30 each
Next 90k transactions/month $0.20 each $0.22 each
Next 400k transactions/month $0.15 each $0.17 each
Next 500k transactions/month $0.10 each $0.12 each
Next 1mm+ transactions/month $0.08 each $0.10 each
Does Priority One have any customer satisfaction policies?
Priority One offers a "Customer Satisfaction Guarantee." Stated briefly, if you are not satisfied with our service for any reason within the first 90 days, we will refund your application fee, maintenance fees and any fees for transactions that were not properly processed. |
