Gee, its touching to know that a US company not only knows about the plight of the British corner shop but has come up with a way to keep this great institution, so dear to the hearts of a nation of shopkeepers, alive. For as it happens Western Union Corp, which acquired National Payments Network Inc in July, is helping a new British company called Western Union Payments Ltd find its financial feet as it begins to set up an electronic payment system based in local independent (or corner) shops throughout England and Wales to help local authorities collect the community charge from the unbanked. These poor unfortunates are those without a bank account and constitute between 25% and 40% of the adult population in Britain, depending on who is counting. National Payments has a similar system up and running in the US to collect bills for utilities, which has been operational for four years and has proved a reasonable moneyspinner there. Western Union Ltd’s opening gambit to win the loyalty and support of the British public for such a system is, however, debatable – the collection of the community charge from the less wealthy sections of society. The logic behind the strategy is that local authorities in England and Wales will have to cope with a payment volume three times the size of current rates collections. Furthermore, they will be dealing with more individuals (especially young people under 20) that do not have a bank account. They also require a system with the capacity to handle such a large number of transactions every week or fortnight. Western Union’s solution is to contract with councils to establish, free of charge, a network of payment agents in local shops. These agents will be given, free of charge, computerised terminals with 10 footprints to process payments. Free training will be given, a telephone line installed and a free daily security money-collection service provided. Paid a commission Agents will accept payments during normal business hours and be paid a commission on all monies collected, and they can also, according to Western Union, expect sales increases exceeding 20% thereby enabling them to withstand the financial ravages inflicted by the chain stores. For, on average each Agent can expect to receive 50 to 60 payments a day and over 80% of these customers will also buy something, US experience suggests. Payments are simple to make. Local authorities will issue every individual that does not elect to pay the community charge via direct debit, access card or cheque with a Switch card. The shop assistant will then simply key in the amount of cash paid, and pass the payment card through the terminal. A receipt is then printed. At the end of each day Western Union’s main computer polls each terminal to transfer the payment data. The data is subsequently passed onto the local authority’s computer while the actual funds are paid into Western Union’s bank before being credited to the local authority. The entire process is calculated to take four days. Western Union makes its money by taking a fee from the local authorities worth around 2% of the amount of funds collected. Two pilot schemes start in October one in the London Borough of Lewisham and the other in West Lothian, near Edinburgh with 10 Payment Agents being selected in each area. If these perform satisfactorily, Western Union Ltd believes it will sign up 20 local authorities next year, adding a further 50 in 1991. As soon as the company becomes financially solvent it will exist as an independent UK business and plans to expand its services to offer the facilities to pay phone, gas, electricity and water bills. – Katy Ring
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