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From the March-20, 2002 issue of Credit Union Times Magazine • Subscribe!
Too much being made over "good funds" bill pay model
<p>I wanted to offer some comments specific to Bill Payment and the difference between "Good Funds" and "Risk Based" made in a recent article on the Digital Insight/VIFI merger, "Digital Insight to convert VIFI clients by July" (CU Times, Feb. 27). Frankly, a lot of hoopla has been made surrounding this subject, in my opinion because the former VIFI clients are grasping for some reason to shun the acquisition. Sunmark was a former VIFI client and was requesting of VIFI to switch us to the "Risk Model" for quite some time. The reason for this is because the Bill Pay product in and of itself is a very difficult sale, partly because of the loss of float in the members' checkbook. The "Risk Based" model shaves 2-3 days off of the float loss of the "Good Funds" model without creating any risk to the credit union. VIFI was reluctant to switch us as they highly touted the good funds structure. There are reasons for their push of this model which are financial in nature, but I will not get into at this time. With that being said, the only difference between the two models from the member's perspective is that with the Good Funds model the member tells the provider what the due date is and lets the provider make the determination of when to send the bill out and debit the member's account (the provider makes this "guess" based upon whether the payee is an ACH receiver or requires a check - I've seen payments not arrive on time because of this guess). With the Risk Model, the member clearly enters a date to pay the bill regardless of payment mechanism (the page will say "allow two days for Electronic Payment, and five days for a check"). The member's account is then debited one to twodays after the bill is paid. Thus, in my opinion, as well as other consumers on the Risk model, having myself determine the date to pay my bill clearly gives me more leeway as well as certainty of payment. Additionally, I have control of my money in my CU account for an additional three to eight business days-quite substantial! My summation, having used both products, is that the Risk Model is the absolute best model for the consumer as well as for the financial Institution. Bob McDonald VP Finance / Information Systems Sunmark FCU Schnectady, N.Y.</p>
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