Stored Value Products

Transcription

1 2011 GSA SmartPay Training Conference Stored Value Products Chris Pieroth GSA SP2 Program Manager, Citi

2 A Winning Hand: Solutions, Savings and Sustainability with GSA SmartPay The 13 th Annual GSA SmartPay Training Conference, Las Vegas

3 House Rules To ensure the best possible learning experience for participants, please adhere to the following house rules: Turn cell phones and pagers to vibrate Hold questions to end of session Ensure your participant badge is scanned to receive CLP credits For each course Must leave room and reenter Take advantage of opportunities to provide feedback Please select the Citi Q&A icon on any Citi PC at the conference Answers to be ed after the conference within 60 days 3

4 Goals & Objectives Provide an overview of the various products that are available to agencies and organizations from Citibank Charge Cards Declining Balance Cards Debit Cards Prepaid Cards Citi Controlled Spend Account Develop a basic understanding of how to match the capabilities of these products to different needs and requirements within an agency or organization 4

5 Agenda Product Descriptions Usage Which Products Work the Best? Examples 5

6 1. Product Descriptions 6

7 Product Descriptions Charge Cards Charge cards have an assigned credit line, which renews as payments are made The cards can be individually or centrally billed with individual or central payment Bills are generated on a cycle basis with payment due by a certain date There are strong controls on how and where the card can be used There is a separate electronic access system to support charge cards 7

8 Product Descriptions Declining Balance Cards Declining balance cards work similar to charge cards except that: The credit line does not renew when payments are made They must be centrally billed and centrally paid. Declining balance cards use the same electronic access system as charge cards 8

9 Product Descriptions Debit Cards Debit cards are tied to a deposit account As transactions are incurred, they are withdrawn from the account If multiple cards are issued, all cards draw from the same account Only limited controls are available on this product There is no separate electronic access system to support debit cards; debit cardholders rely on the online banking infrastructure that supports the underlying deposit account to access account and transaction information 9

10 Product Descriptions Prepaid Cards Prepaid Cards are a standalone product The accounts are paid in advance and the value of the payment is loaded onto the card Cards can be single or reloadable Generally, there is a one-to-one relationship between each card and the corresponding account that holds the funds, but other configurations are available Moderate controls are available for this product Prepaid cards have separate electronic access system to support the product (e.g. to load value, to view transaction activity, etc.) 10

11 Product Descriptions Citi Controlled Spend Controlled spend accounts are a hybrid of an individually billed charge card and prepaid card. The cards have similar controls as a prepaid card, but the card does not have to be prefunded; instead, a non-renewing credit limit is established on an event-by-event basis. There is also an option to reconcile and adjust limits to actual payments. Controlled spend accounts have the same robust controls as charge cards and use the same electronic access system. 11

12 2. Usage 12

13 Usage Charge Cards Charge cards are designed for use by individuals who have an undefined and continual need to make various purchases, whether travel, purchase or fleet related. 13

14 Usage Declining Balance Cards Declining Balance Cards are a variation of the charge card, where the total spending limit is predefined based on what the card will be used for and does not renew when payments are made. These cards are often used for relocation or project-related expenses, where a budget or spending limit is established up front and the cards are used until the money is spent. 14

15 Usage Debit Cards Debit cards are rarely used within the government. Because debit cards must be tied to a deposit account, the only way a debit card can be used is if the government deposits funds in an outside account. Since there are very strict Treasury regulations on how and when this can be done, these cards are impractical for most government needs. Only agencies with the authority to deposit funds outside of the government can use debit cards. One possible use might be grant administration. 15

16 Usage An Additional Word on Debit Cards Since government funds are managed by the Department of the Treasury and the Treasury does not normally allow direct access to government funds by third parties, the use of a true debit card is impractical in most cases. If an agency does have the authority to deposit funds outside of the Treasury, then a debit card might be able to be used. One possible use would be cases where an agency is providing third parties with funding for certain projects and would like some visibility to how the funds are being used, such as grant administration. If debit cards are not a workable solution, there are other product configurations that can deliver functions that are similar to a debit card: Centrally billed charge cards can be set up to bill and be paid on a daily basis. This replicates the effect of the agency having the funds withdrawn on a daily basis. The agency or organization has the added benefit of being able to review and approve the daily bill before the funds are disbursed. Prepaid cards can be funded in advance and used as required by the cardholder. The agency or organization is able to add funds to these cards as needed for specific purchases. A declining balance or Citi Controlled Spend Account can provide the same level of control as a prepaid card, but without the need for the agency or organization to actually prefund the account. The agency or organization only makes payment when charges are actually incurred. Different liability, billing and payment options are available. 16

17 Usage Prepaid Cards Prepaid cards are used as cash or check replacement. One of the key elements of the applicability of a prepaid card is whether or not the funds placed on the card can be used in their entirety and are truly the property of the cardholder. These cards are often used for benefit payments or as a substitute for cash rebates. 17

18 Usage An Additional Word Prepaid Cards Citibank has two prepaid card offerings, of which only one is currently available on the GSA Smart Pay 2 Master Contract. Standard Prepaid Card (on Master Contract) Runs on the same platform as charge cards Essentially a charge card with a zero credit limit When prepaid is made, this creates a credit balance on the account the cardholder can spend up to the amount of the credit balance Fully compliant with all SmartPay 2 requirements for charge cards Limited flexibility 18

19 Usage An Additional Word Prepaid Cards Enhanced Prepaid Card (not on Master Contract) Runs on a separate platform Not fully compliant with all GSA SmartPay requirements for charge cards Extremely flexible Custom website for cardholder access Custom code to meet specific client needs GSA SmartPay is willing to work with Citibank to add the enhanced prepaid card solution to the GSA SmartPay 2 Master Contract if an agency or organization has a need for this product 19

20 Usage Citi Controlled Spend Account Controlled spend accounts are used when a agency or organization would like the control of a prepaid card but is constrained by one of two factors: The agency or organization cannot actually prefund the account The amount of spending limit is an estimate but may not be final amount to which the cardholder is entitled to spend Hybrid between an individually billed charge card and prepaid card: The cards have similar controls as a prepaid card, but the card does not have to be prefunded; instead, a non-renewing credit limit is established on an event-by-event basis. There is also an option to reconcile and adjust limits to actual payments. Controlled spend accounts have the same robust controls as charge cards and use the same electronic access system. 20

21 3. Which Product Works Best? 21

22 Stored Value Product Which Product Works Best Control Control Strong merchant category and transaction limit controls on an account-by-account basis Strong merchant category and transaction limit controls are the same for all accounts in the program No merchant category or transaction limit controls are required Charge Card Declining Balance Debit Card Prepaid Card Controlled Spend X X X X X X X X X X X X 22

23 Stored Value Product Which Product Works Best Funding Funding Funds must stay within the Treasury and can only be disbursed after transactions have occurred Funds must stay within the Treasury but can be disbursed when the obligation is created but before transactions have occurred Charge Card Declining Balance Debit Card Prepaid Card Controlled Spend X X X X X X X Funds can be deposited outside the Treasury X X X X X 23

24 Stored Value Product Which Product Works Best Liability and Billing Liability and Billing Charge Card Declining Balance Debit Card Prepaid Card Controlled Spend Individual liability is required X X Central liability is required X X X Individual billing is required X X Central billing is required X X X No billing is required funds are disbursed upon entitlement eligibility Initial entitlements is only estimated and must be reconciled with final entitlement after transactions have occurred X X

25 Stored Value Product Which Product Works Best Other Considerations for High-Control Products Certain merchants (hotels and car rental companies) will authorize for more than the anticipated transaction amount, which can tie up available funds/limits on prepaid and declining balance cards The timing between charges and credits (such as airline refunds) can also tie up available funds/limits on prepaid and declining balance cards 25

26 4. Examples 26

27 Stored Value Product Which Product Works Best Examples Invitational Travel Guest speakers traveling on a predetermined travel allowance Project Accounts Projects with a predetermined budget that cannot be exceeded Infrequent Travelers Employees who need to travel on an infrequent basis and do not qualify for a standard government travel card Reduce Costs Increase Efficiency & Control Emergency/Disaster Accounts Individuals due relief payments as a result of an emergency or disaster 27

28 Chris Pieroth 28

29 Reminders Thank you for attending! Visit the Citibank Welcome Center Level 3 Foyer West National Industries for the Blind will have a display of products Conference Slide Show come see yourself shine! Visit the Citibank One-on-One Lab Lido 3101 A/B Visit the Citibank Mini Sessions Lido 3001 A/B Citi Q&A Link Tell us your thoughts 29

30 Schedules available at the Welcome Center 30

31 Interactive Training Events DoD Citi offers on-site training at no cost for agencies meeting the required minimum participant level of 20 or more as set forth in the GSA SmartPay2 Master Contract. Regional Citi Training Locations Norfolk, VA Washington, DC Visit to view and register for these sessions Upcoming Training Visit to view and register for these sessions On-site at your base or installation 20-participant minimum Visit and under Resources to download the On-site Training Request Form Distance Learning Video Conferences Please us at and a Citi training coordinator will work with you directly for on-site or Distance Learning sessions. 31

32 Interactive Training Events GSA Citi offers Computer Based Training (CBT) via the Citi Commercial Card Learning and System Support (CLASS) in CitiManager. Visit home.cards.citidirect.com and from the Web Tools Tab select the CLASS link Please contact your Account or Client Manager if you are interested in setting up a training session. Training can be conducted at a Citi Training Location, on-site at your office or via the Web. Regional Citi Training Locations Norfolk, VA Washington, DC 32

33 Terms & Disclosures IRS Circular 230 Disclosure: Citigroup Inc. and its affiliates do not provide tax or legal advice. Any discussion of tax matters in these materials (i) is not intended or written to be used, and cannot be used or relied upon, by you for the purpose of avoiding any tax penalties and (ii) may have been written in connection with the "promotion or marketing" of any transaction contemplated hereby ("Transaction"). Accordingly, you should seek advice based on your particular circumstances from an independent tax advisor. Any terms set forth herein are intended for discussion purposes only and are subject to the final terms as set forth in separate definitive written agreements. This presentation is not a commitment to lend, syndicate a financing, underwrite or purchase securities, or commit capital nor does it obligate us to enter into such a commitment. Nor are we acting in any other capacity as a fiduciary to you. By accepting this presentation, subject to applicable law or regulation, you agree to keep confidential the existence of and proposed terms for any Transaction. Tuesday, July 28, 2009 Prior to entering into any Transaction, you should determine, without reliance upon us or our affiliates, the economic risks and merits (and independently determine that you are able to assume these risks) as well as the legal, tax and accounting characterizations and consequences of any such Transaction. In this regard, by accepting this presentation, you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal, tax or accounting advice, (b) there may be legal, tax or accounting risks associated with any Transaction, (c) you should receive (and rely on) separate and qualified legal, tax and accounting advice and (d) you should apprise senior management in your organization as to such legal, tax and accounting advice (and any risks associated with any Transaction) and our disclaimer as to these matters. By acceptance of these materials, you and we hereby agree that from the commencement of discussions with respect to any Transaction, and notwithstanding any other provision in this presentation, we hereby confirm that no participant in any Transaction shall be limited from disclosing the US tax treatment or US tax structure of such Transaction. 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34 2011 Citibank, N.A. All rights reserved. Citi, Citi and Arc Design and CitiDirect are trademarks and service marks of Citigroup Inc., used and registered throughout the world.