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FAILED DIRECT DEBITS COST UK BUSINESS CUSTOMERS AND MONEY

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Bottomline Technologies

Research From Bottomline Technologies Unveils Major Inefficiencies in Direct Debit and Direct Credit Payments Processing

Bottomline Technologies

Bottomline Technologies

New independent market research by industry analyst, Redshift Research, on behalf of Bottomline Technologies (NASDAQ: EPAY) has found that almost a quarter of UK individuals (23%) have experienced a problem setting up or amending a Direct Debit (DD) or Direct Credit (DC) in the last 12 months, with 14% of consumers cancelling a policy or subscription because the DD set-up process was too complicated. With almost 6 billion payments processed every year, and each failed transaction around £50, this represents a significant loss in revenues and customers for UK business.

The survey, which sampled the views of 200 UK financial decision makers and 1,098 UK adults, also found that on average 95% of failed DD/DC transactions are due to human error, with 71% of finance departments citing errors with either the bank account number or the sort code as the most common reason for the transaction to fail.

Whilst 71% of businesses recognise that failed transactions damage customer and/or employee relations, businesses also need to take into account the significant cost of each failed transaction. As many as 60% of business admit incurring a cost of £50 or more for every failed DD transaction, whilst 43% of finance departments spend more than 4 hours a month, and 11% spend more than 10 hours each month, fixing problems with DD transactions.

Financial Services, Utilities, Telco/mobile and membership companies are amongst the top five industries where consumers have experienced problems.

The survey also found that fraudulent activity is the most time consuming error that finance departments experience (28%), with sort code errors and bank account number errors ranking as second and third respectfully.

Extraordinarily, 6% of consumers admitted to intentionally completing a DD mandate incorrectly, with 45% of these respondents deliberately using the wrong bank account number and a third of these putting the wrong sort code or address details down.

Jim Conning, Payments Director, Bottomline Technologies, comments, “This confirmation that almost all failed DD/DC transactions are caused by human error, clearly highlights the need for a better checking process at point of entry. The simple addition of technology would transform the process and save substantial time and money.”

Conning continues, “The key is not only to check that a bank account and sort code are valid – that a specific bank account number fits the rules that associate it with a specific sort code – but also to verify the account information in real-time, so that errors can be resolved there and then at point of entry. With this combined approach, companies are protected from deliberate fraud and inadvertent error.”

Conning concludes, “Direct Debits and Direct Credits are compelling payment methods that can offer excellent cash flow improvements for businesses. But the current failure to check account information in real-time is clearly undermining the experience and disenfranchising hard won customers. Human error is unavoidable; it is only by imposing real-time control that organisations can flag and address mistakes up front to reduce Direct Debit and Direct Credit failure and truly realise the benefits of more predictable cash flow.”

 Key research findings:

  • 95% of failed Direct Debit/Direct Credit transactions are due to human error.
  • 71% of failed Direct Debit/Direct Credit transactions are due to sort code or bank account number errors.
  • Fraudulent activity is the most time consuming error that finance departments experience (28%).
  • 71% of finance departments say that failed Direct Debits/Direct Credits damage customer and employee relations.
  • 43% of finance departments spend more than 4 hours a month rectifying failed Direct Debit/Direct Credit transactions at significant cost.
  • 14% of consumers have cancelled a policy or subscription due to complicated DD or DC set up processes and 18% will actively look for a competitive alternative.
  • The majority of payment failures (63%) occur in payments made to the business by a customer.
  • But 65% of consumers insist the recipient organisation is to blame.
  • 51% of businesses believe that verification and validation software reduces cost of managing customer queries; delivers better cash management visibility (42%) and provides better customer acquisition and sign-up process (40%).

The research was conducted by Redshift Research, an independent market research analyst and a member of the Market Research Society on behalf of Bottomline Technologies.

About Bottomline Technologies
Bottomline Technologies (NASDAQ: EPAY) provides cloud-based payment, invoice and banking solutions to corporations, financial institutions and banks around the world. The company’s solutions are used to streamline, automate and manage processes involving payments, invoicing, global cash management, supply chain finance and transactional documents. Organizations trust Bottomline to meet their needs for cost reduction, competitive differentiation and optimization of working capital. Headquartered in the United States, Bottomline also maintains offices in Europe and Asia-Pacific. For more information, visit www.bottomline.co.uk

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Robinhood plans confidential IPO filing as soon as March – Bloomberg News

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Robinhood plans confidential IPO filing as soon as March - Bloomberg News 1

(Reuters) – Online brokerage Robinhood, at the centre of this year’s retail trading frenzy, is planning to file confidentially for an initial public offering as soon as March, Bloomberg News reported late on Friday, citing sources.

The California-based brokerage has held talks in the past week with underwriters about moving forward with a filing within weeks, Bloomberg said.

Robinhood did not immediately respond to a request for comment.

Reuters reported last year that Robinhood has picked Goldman Sachs Group Inc to lead preparations for an initial public offering which could value it at more than $20 billion.

Robinhood was at the heart of a mania that gripped retail investors in late January following calls on Reddit thread WallStreetBets to trade certain stocks that were being heavily shorted by hedge funds.

The online brokerage tapped around $3.4 billion in funding after its finances were strained due to the massive trading in shares of companies such as GameStop Corp.

(Reporting by Ann Maria Shibu in Bengaluru; editing by Richard Pullin)

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Analysis: How idled car factories super-charged a push for U.S. chip subsidies

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Analysis: How idled car factories super-charged a push for U.S. chip subsidies 2

By Stephen Nellis

(Reuters) – When President Joe Biden on Wednesday stood at a lectern holding a microchip and pledged to support $37 billion in federal subsidies for American semiconductor manufacturing, it marked a political breakthrough that happened much more quickly than industry insiders had expected.

For years, chip industry executives and U.S. government officials have been concerned about the slow drift of costly chip factories to Taiwan and Korea. While major American companies such as Qualcomm Inc and Nvidia Corp dominate their fields, they depend on factories abroad to build the chips they design.

As tensions with China heated up last year, U.S. lawmakers authorized manufacturing subsidies as part of an annual military spending bill due to concerns that depending on foreign factories for advanced chips posed national security risks. Yet funding for the subsidies was not guaranteed.

Then came the auto-chip crunch. Ford Motor Co said a lack of chips could slash a fifth of its first-quarter production and General Motors Co cut output across North America.

“It brings home very clearly the message that the semiconductor is really a critical component in a lot of the end products we take for granted,” said Mike Rosa, head of strategic and technical marketing for a group within semiconductor manufacturing toolmaker Applied Materials Inc that sells tools to automotive chip factories.

Within weeks, automakers joined chip companies calling for chip factory subsidies, and U.S. Senate Majority Leader Chuck Schumer and President Biden both pledged to fight for funding.

Industry backers now aim to be part of a package of legislation to counter China that Schumer hopes to bring to the Senate floor this spring. Still, all agree it will do little to solve the immediate auto-chip problem.

Headlines about idled car plants resonated with the public that had shrugged off abstract warnings in the past, said Jim Lewis, a senior fellow at the Center for Strategic and International Studies. Lawmakers, already worried that a promised infrastructure bill will not materialize this year, decided to push for quick solution.

“Nobody wants to be seen as soft on China. No one wants to tell the Ford workers in their district, ‘Sorry, can’t help,'” Lewis said. “It was one of those moments where everything aligned.”

The package includes matching funds for state and local chip-plant subsidies, a provision likely to heat up competition among states including Texas and Arizona to host big new chip plants that can cost as much as $20 billion.

The subsidies could benefit a factory in Arizona proposed by Taiwan Semiconductor Manufacturing Co and one in Texas eyed by Samsung Electronics Co Ltd, even though those factories would be geared toward high-end chips for smartphones and laptops, rather than simpler auto chips. And those factories would not come on line until 2023 or 2024, according to plans disclosed by the companies, the world’s two largest chip manufacturers.

In the longer term, a raft of U.S. companies are also poised to benefit. Any chipmakers that build factories will source many tools from American companies such as Applied, Lam Research Corp and KLA Corp.

Intel Corp, Micron Technology Inc and GlobalFoundries – which already have U.S. factory networks – will also likely benefit.

Smaller, specialty chip factories also could benefit.

“The recent chip shortage in the automotive industry has highlighted the need to strengthen the microelectronics supply chain in the U.S.,” said Thomas Sonderman, chief executive of SkyWater Technology, a Minnesota-based chipmaker that makes automotive and defense chips. “We believe that SkyWater is uniquely positioned due to our differentiated business model and status as a U.S.- owned and U.S.- operated pure play semiconductor contract manufacturer.”

Even with subsidies, the U.S. companies still must compete with low-cost Asian vendors over the long run, and the immediate auto chip troubles will probably persist.

Surya Iyer, a vice president at Minnesota-based Polar Semiconductor, which makes chips for automakers, said his factory is booked beyond capacity and has started to speed some orders up while slowing others down, to meet automakers’ needs as best it can.

“We are expecting this level of demand to continue at least for the next 12 months, maybe even longer,” he said.

(This story has been refiled to add attribution to quote in paragraph 9, add dropped words in paragraphs 10 and 17)

(Reporting by Stephen Nellis and Hyunjoo Jin in San Francisco and Alexandra Alper in Washington. Editing by Jonathan Weber and David Gregorio)

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Atlantia disappointed with CDP bid for unit, continues talks

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Atlantia disappointed with CDP bid for unit, continues talks 3

By Francesca Landini and Stephen Jewkes

MILAN (Reuters) – Italy’s Atlantia said on Friday an offer by a consortium of investors led by state lender CDP for its 88% stake in Autostrade per l’Italia fell short of the mark and asked its top managers to see if the bid could be sweetened.

“The offer falls below expectations,” the Italian infrastructure group said in a statement, adding it had mandated the chief executive and the chairman to assess “the potential for the necessary substantial improvements” to the bid.

Italian state lender CDP, together with co-investors Macquarie and Blackstone, has presented a proposal valuing all of Autostrade per l’Italia at 9.1 billion euros ($11 billion).

The consortium also requested Atlantia guarantee up to 700 million euros in potential damage claims and another roughly 800 million euros for a pending legal case, making the bid less attractive than previously expected.

One source said the consortium estimated overall pending legal claims against Autostrade at 3 billion to 4 billion euros, adding the 700 million euro cap did not mean the amount would be detracted from the offer price from the start.

Earlier on Friday Atlantia’s minority investors TCI and Spinecap had called on Atlantia’s board to reject the offer, saying it undervalued the asset.

“No deal is better than a bad deal, especially a bad deal and a wrong price,” TCI Advisory Services partner Jonathan Amouyal said in a emailed comment to Reuters.

TCI, which holds an indirect stake of around 10% in Atlantia, repeated that the value for 100% of Autostrade should be no less than 12.5 billion euros.

The board will hold a further meeting in order to take a final decision on the offer in due time, Atlantia said.

The negotiations between Atlantia and the CDP-led consortium are part of an effort to end a political dispute over Autostrade’s motorway concession triggered by the collapse of a motorway bridge run by the unit.

(GRAPHIC – Atlantia share performance: https://fingfx.thomsonreuters.com/gfx/mkt/qzjpqggjdpx/image-1614331237501.png)

The bid expires on March 16, but the deadline could be extended in case Atlantia calls an extraordinary shareholders meeting (EGM) on the issue, according to one source with knowledge of the matter.

Shares in the group ended down 0,7%, after recovering some losses, as investors waited for the decision of the board.

Atlantia, which is controlled by the Benetton family, owns 88% of Autostrade, with Germany’s Allianz and funds DIF, EDF Invest and China’s Silk Road Fund holding the rest.

The group also kept open an alternative plan to demerge and sell its stake in Autostrade per l’Italia unit and called an EGM on March 29 to extend to end-July a deadline for offers for the demerged stake.

(Additional reporting by Stefano Bernabei, editing by Louise Heavens and Steve Orlofsky)

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