Quik&EZ: The other bill-payment service

Avia Collinder, Business Writer

The decision turned out to have a stabilising effect on revenue for the money services firm. Prime Trust Financial Service's directors saw bill payment as a natural fit alongside the company's cambio and remittance operations, and a sure-fire way to grow income streams. And it worked.

The service now accounts for 25 per cent of group revenue, according to director and company secretary Victor Chang, who is suggesting that small business operators might also find it a good way to bring people into their stores.

It's the pitch he is making in his search for distribution partners to expand Prime Trust's bill-payment service brand Quik&EZ Pay.

Prime Trust is a private family firm in the money-trading business since 1995. It is owned by Victor Chang, Nicholas Chang, Richard Chang and Lydia Chang.

Bill payment was added as a new business line in 2008. Seven service points have now grown to 57, mostly through distribution agents. Chang says he wants to grow the network of 50 agents to 75 this year.

At start-up, Quik&EZ bill payments were completely free. Prime chose the strategy to differentiate itself from pioneer Paymaster Jamaica and Bill Express, the service owned by powerhouse conglomerate GraceKennedy Limited, who were both charging transaction fees.

Raised fees

"We at first thought it was an insult - obscene - to ask for bill payment (fees) when people were already paying a bill. We felt we could come in and have free bill payment," Chang said.

Like Quik&EZ, Paymaster started out 17 years ago with free bill payments but introduced fees in 2006. The charge has grown over the years from J$35 per transaction and was last increased in 2010 and remains currently at J$50.

Bill Express raised fees in December 2011, from J$50 to the current fee of J$55, said a company representative.

However, the Bill Express Online service remains free. And customers are also offered free utility-bill insurance, called Bill Protect, through which their electricity or water bills will be paid in case of injury, said communications manager Patricia-Kaye Aarons.

Quik&EZ charges J$25 per transaction.

At first Quik&EZ's revenue was confined to what Chang described as marginal
commission from LIME, Digicel, Flow and utility companies, which was
enough to cover costs in the early period. Furthermore, the free service
pulled clients into Prime Trust.

"It was synergistic;
and further, with volumes, we could break even and maybe even make a
little money. Everybody began to come to us because it was free," Chang
said.

The company held to the philosophy for the first
two years, but eventually reversed course in 2010.

In
its first two years of operation, Quik&EZ was offered from
Prime Trust's seven offices in New Kingston, Half-Way Tree and downtown
Kingston; Mandeville; Savanna-la-Mar; Portmore; and Ocho Rios. But Chang
said clients soon began demanding more convenient payment
locations.

"The problem is that people began to ask
why don't we have it elsewhere; why do we have to travel to Half-Way
Tree?"

Potential partners

It kicked
off the search for Quik&EZ agents in 2010, and since then the
network has grown eightfold.

"We were pressured for
other locations. Eventually, we thought we should allow other people to
get in," said Chang.

Now: "We get two to three
enquiries a day, with an additional 15 in process," said the company
secretary, referring to potential partners interested in operating
Quik&EZ franchises.

Chang says Prime Trust has
poured J$10 million into Quik&EZ since its launch - most of
which has been spent on software and equipment - and that the operation
finally broke even in the fourth quarter of 2012. The breakthrough came
two years after the decision, like its market rivals had done years
before, to introduce a service fee for bill
payments.

This year, Quik&EZ is targeting an
additional 25 distribution points under a "modest" expansion
programme.

"We would like to be very modest in our
expectations. We figure on adding another 25 outlets by the end of the
year, which is 50 per cent growth. That is easily doable," said
Chang.

"We started in 2010 with none [distribution
partners], and by the end of the year it was 50," he
said.

The decision to introduce a transaction fee in
2010 was taken in tandem with plans to grow the bill
service.

"The money we got from clients could not
share between us and other locations. Additionally, we could not handle
all of Jamaica by ourselves," Chang said. "But we chose a nominal
charge, J$25, that people can afford, and also support our network. This
is still less than half of what major companies
charge."

Small player

Chang has not
been forthcoming on how much revenue Prime Trust earns from
Quik&EZ - saying only that it's "not hundreds of millions" - but
he says the company collects billions of dollars on behalf of the
telecoms and utility companies. He estimates that 97-98 per cent of the
bills collected through Quik&EZ is funds belonging to Jamaica
Public Service Company and National Water
Commission.

Still Quik&EZ remains a small
player in a small group of players.

The Bank of
Jamaica has licensed only three service providers to date - Paymaster,
Bill Express and Quik&EZ Pay - which together operate 321
locations nationwide. However, a number of financial institutions allow
bill payment through their branch windows and online portals. Alliance
Financials advertises 45 payment windows in the Yellow
Pages.

"To estimate conservatively, I think we have
five per cent of the market, but this is just a 'guestimate'. We will
plateau, we figure, in another two years. Once we get the desired
network in place, then growth will level off," Chang
said.

He believes the age of Quik&EZ's
proprietary software offers competitive
advantage.

"... The software of our competitor is over
12 years old. Ours is three years old and is a more modern product.
It's not just faster but very user-friendly," Chang
said.

business@gleanerjm.com