Commentary & Analysis
Allison Payment Systems: More than 120 Years of Innovation
Allison Payment Systems was founded in 1888 by Noah Allison, who is credited with the invention of the coupon payment book. The focal point for Allison Payment Systems is personalized customer communications through electronic delivery and first class mail … and lots of it.
By Cary Sherburne
Published: November 18, 2015
Allison Payment Systems was founded in 1888 by Noah Allison, who is credited with the invention of the coupon payment book. These were used by retailers to grant credit before credit as we know it today existed. According to Kevin Thomas, VP of Sales & Marketing for the company, “You would pay up front for groceries or ice and get a discount with the book that was provided by the vendor. This grew into the coupon books we still use today to make payments on installment and mortgage loans. We still produce millions of them, but it is not our focal point these days.” Interestingly, Noah’s son (also once president of the Allison Coupon Company) founded Allison Transmission and the Indianapolis Motor Speedway. Coincidentally, Allison Transmission is celebrating 100 years in business this year.
The focal point for Allison Payment Systems is personalized customer communications through electronic delivery and first class mail … and lots of it. The company, which acquired its current name in 1995, now has 160 employees, annual revenues in the $40 million range and produces 15 million or more first class mail pieces per month. In addition, it generates millions of emails and houses billions of images for web presentment on behalf of its clients. These are in the form of billing statements, letters, and health care notices in healthcare/Medicare; mortgage and auto finance; student lending; and government.
Thomas explains, “We have three facilities, two in Indianapolis and a recently-opened facility in Las Vegas. The addition of the Las Vegas facility has allowed for product optimization in our Indianapolis operations, and having the Las Vegas facility gives us a better disaster recovery and business continuity story.” We also maintain contracted disaster recovery capabilities in Pennsylvania and Minnesota.
Ultimately, the two facilities will have duplicate production platforms. “We already have the workhorse full-color presses in place in both facilities,” Thomas adds. “We chose to go with the Ricoh InfoPrint 5000. Our first one was installed early this year, and we are in the process of converting many of our accounts from preprinted shells to a white-paper-in inkjet-based manufacturing process.”
Today, according to Thomas, about 5% to 10% of the volume is white paper in. “But that is set to change quickly,” he says. “Several of our large accounts are within weeks of being converted to full color, so that number will jump significantly within the next month or so to at least 2.5 million mail pieces a month, or 15% to 20% of our volume.”
I asked Thomas about the choice of the InfoPrint 5000, since Ricoh’s new Pro VC60000 was available on the market at the time the decision was made. He comments, “We had significant conversations about which way to go, but the bottom line is that our customers are very cost-sensitive, the cost model for the InfoPrint 5000 was better aligned with our needs, and it has enough substrate flexibility to meet our requirements. We believe that if we were able to convert all of our clients tomorrow, these two presses would be able to handle a significant portion of that volume while adding a great deal of personalization flexibility.
In terms of converting clients, Thomas says that there is some reluctance on the part of some clients. “But the good news is,” he states, “the dynamics of inkjet are such that we are almost seeing an on-par between black & white toner and full-color inkjet. In many cases, we have been able to hold the line on cost or make it close enough that it is acceptable. The key is getting the marketing folks in the room and helping the operations folks understand that it is not a significant difference and it does give them significant benefits.” Those include not having to wait for preprinted stock to run out when changes are required or scrapping expensive inventory and the ability to highlight important information on transactional documents in color. These are in addition to the benefits marketers understand. “White paper in makes it easier and more affordable to adapt to the continuously changing regulatory environment, among other things,” Thomas says.
Another advantage lies in concatenation, which Thomas describes as the ability to combine what used to be multiple runs requiring multiple paper changes. “This could be a mortgage company that is servicing for other companies, requiring a change of logo and the need to keep different stocks in inventory,” he explains. “With the InfoPrint 5000, we can theoretically run them all together because we don’t have to worry about what paper is in the machine. This could even extend to crossing account lines in order to take advantage of lower postal costs or better envelope usage. We are not doing this today, but I could foresee doing it in the future, with client agreement, of course.”
Allison Payment Systems has a 15-year relationship with Ricoh. “That also played into the decision process,” Thomas says. “Our experience is that the Ricoh systems are workhorses, and we have had great service. We need uptime and quality, and we felt most comfortable with Ricoh in being able to achieve those objectives. Ultimately what we run today on our InfoPrint 4100s will end up on the 5000s, including critical financial services, healthcare, utility and government documents.
As to the future, Thomas says, “All of our partners have been very supportive in helping us make this transition, although we still have a way to go before we are where we need to be. The industry is going in this direction, and the vendors have done an impressive job of getting the cost model down to the level it needs to be for the print and mail industry. Clients can be pretty persnickety about their costs; they look at all the pennies pretty closely. The inkjet world is enabling us to attack that market at a cost on par with black & white, while adding marketing and personalization flexibility and that will be a huge factor in getting clients to make the move to a white paper in model. And it goes beyond that; it’s the entire ecosystem. We will be looking for even more ways to streamline things going forward, positively impacting critical elements such as marketing inclusion and personalization as well as regulatory critical mail turnaround times.”