State of Mississippi

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State of Mississippi and Bank of Americas
PayMode NASACT 2004 Annual Conference November
15, 2004 Biloxi, Mississippi
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Mission in Practice
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Mississippis Problem

• Add functions to the legacy financial system
• Do it without spending a lot of money
• Do it without moving the States prime banking
  relationship out of state
• Do it without putting onerous requirements on
  trading partners, e.g. change banks
• Do it quickly!

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How We Got Here. . .

• . . .By Accident
• Gartner research (was looking for something else)
  referenced Clareons PayMode
• Checked out the Web demo
• Actually answered the phone on vendor follow-up
  call

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What Is PayMode?

• Electronic Payment and Remittance Processing
• Links detailed, digital remittance information to
  payments
• Is broadly accepted by vendors, suppliers, other
  payees
• Works within any systems environment and business
  rules
• Works with any bank
• Enables real-time reporting
• State-of-the-art security against fraud, theft
  and misuse

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What Is PayMode?
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Trials and Tribulations

• Very few.
• Clareon acquired by FleetBoston then FleetBoston
  was acquired by Bank of America
• Never missed a beat
• Still bank-neutral
• Still open to product ideas
• Still working with same people
• Very can do approach to doing business
• What we would do differently
• More initial work with agencies (overcome
  garbage-in/garbage-out syndrome on remittance
  information)
• Not much else

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States Trading Partners
MAEP, Other Education, Public Sector, Existing
EFTs
HIPAA, Construction, Transportation
Technology General Expense
Smaller Suppliers, SPAHRS Vendors
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What Vendors and When?
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Vendor Enrollment

• Bringing Vendors On-line
• 2987 fully activated as of 09/30/2004
• 263 in the queue for activation as of 9/30/2004
• Life-to-date 9/30/2004 (24 months of operation)
• 31.62 dollars paid and 17.89 payments made
• Growing daily
• FYTD FY2005 46.19 dollars paid 32.42 payments
  made
• Word of mouth sell of the idea tremendous!
• PayMode staff above and beyond
• When working on vendor enrollment campaigns
• When supporting our agencies and vendors
• If the State has an idea they run with it!
• Ready to take it to another level!

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PayMode Growth
FY2003 Achieved in 9 months FY2005 Q1
FY2005 Only
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Status Since Inception
By Calendar Quarter
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Great Example

• Auto Trim Designs
• Pearl, Mississippi
• Have a browser
• Have an Internet connection
• Have a desire for faster access to their money
• January 1, 2003 September 23, 2004 62
  payments totaling 20,519.60
• Not Big Bucks to the State
• Really Big Bucks to the Vendor!

Just wanted to mention that in all the years of
doing business with the state of Mississippi and
local governments, the waiting for payment has
often been excruciating. At least now with the
state of Mississippi things have changed for the
better. I get paid in days, not months. I love
this. I actually prioritize state work ahead of
other slower paying customers, so we both
benefit. Thanks a lot. Tim Adams, Auto Trim
Designs, Pearl Mississippi September 2, 2004
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Better Example

• Fuelman of Mississippi
• 9.8M in payments from the State during FY2004
  (2612 transactions)
• Lots and lots of remittance detail

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Domino Effect
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Transactions vs Dollars

• Rehabilitation Services paid ALL their
  providers/vendors on paper prior to PayMode.
• These were mostly small dollar (lt20)
  transactions.
• There were over 21,000 warrants they did not have
  to process and mail in FY2004.
• Many of their provider/vendors piggybacked the
  MAEP vendors for Education, our initial push with
  PayMode.

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PayMode
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For More Information
Ann McCormick Bank of America US Product
Management Group Leader, PayMode Payment
Solutions Phone [phone] Ann.F.McCormick_at_bank
ofamerica.com
Cille Litchfield Chief Systems Information
Officer Department of Finance and
Administration [phone] litchc_at_dfa.state.ms.
us