Settlement Assets and Obligations (Tables)

9 Months Ended

Sep. 30, 2020

Settlement Assets and Obligations

Schedule of settlement assets and obligations

Settlement assets and obligations consisted of the following (in millions):

	September 30, 2020
Settlement assets:
Cash and cash equivalents	$	345.7
Receivables from agents and Business Solutions customers		1,107.2
Less: Allowance for credit losses		(45.6)
Receivables from agents and Business Solutions customers, net		1,061.6
Investment securities		2,182.1
Total settlement assets	$	3,589.4
Settlement obligations:
Money transfer, money order, and payment service payables	$	2,740.4
Payables to agents		849.0
Total settlement obligations	$	3,589.4
	December 31, 2019
Settlement assets:
Cash and cash equivalents	$	368.2
Receivables from agents and Business Solutions customers, net		1,230.1
Investment securities		1,698.4
Total settlement assets	$	3,296.7
Settlement obligations:
Money transfer, money order, and payment service payables	$	2,571.5
Payables to agents		725.2
Total settlement obligations	$	3,296.7

Schedule of activity in the allowance for credit losses

The following table summarizes activity in the allowance for credit losses on receivables from agents and Business Solutions customers (in millions):

				Business Solutions
		Agents		Customers
Allowance for credit losses as of January 1, 2020	$	20.4	$	4.5
Current period provision for expected credit losses (a)		28.3		2.1
Write-offs charged against the allowance		(8.0)		(2.5)
Recoveries of amounts previously written off		1.8		—
Impacts of foreign currency exchange rates and other		(1.6)		0.6
Allowance for credit losses as of September 30, 2020	$	40.9	$	4.7

(a) Provision does not include losses from chargebacks or fraud associated with transactions initiated through the Company’s electronic channels, as these losses are not credit related.

Components of investment securities, available-for-sale

The components of investment securities are as follows (in millions):

					Gross		Gross		Net
	Amortized		Fair		Unrealized		Unrealized		Unrealized
September 30, 2020	Cost		Value		Gains		Losses		Gains/(Losses)
Cash and cash equivalents:
Money market funds	$	100.0	$	100.0	$	—	$	—	$	—
Settlement assets:
Cash and cash equivalents:
Money market funds		16.1		16.1		—		—		—
Available-for-sale securities:
State and municipal debt securities (a)		1,263.2		1,331.3		68.2		(0.1)		68.1
State and municipal variable-rate demand notes		712.5		712.5		—		—		—
Corporate and other debt securities		80.4		81.6		1.2		—		1.2
United States government agency mortgage-backed securities		55.0		56.7		1.7		—		1.7
Total available-for-sale securities		2,111.1		2,182.1		71.1		(0.1)		71.0
Total investment securities	$	2,227.2	$	2,298.2	$	71.1	$	(0.1)	$	71.0

					Gross		Gross		Net
	Amortized		Fair		Unrealized		Unrealized		Unrealized
December 31, 2019	Cost		Value		Gains		Losses		Gains/(Losses)
Settlement assets:
Cash and cash equivalents:
Money market funds	$	24.6	$	24.6	$	—	$	—	$	—
Available-for-sale securities:
State and municipal debt securities (a)		1,227.4		1,257.8		31.0		(0.6)		30.4
State and municipal variable-rate demand notes		276.1		276.1		—		—		—
United States government agency mortgage-backed securities		66.3		67.2		0.9		—		0.9
Corporate debt securities		52.3		52.4		0.1		—		0.1
Other United States government agency debt securities		34.9		34.9		—		—		—
United States Treasury securities		9.8		10.0		0.2		—		0.2
Total available-for-sale securities		1,666.8		1,698.4		32.2		(0.6)		31.6
Total investment securities	$	1,691.4	$	1,723.0	$	32.2	$	(0.6)	$	31.6

(a) The majority of these securities are fixed-rate instruments.

Schedule of contractual maturities of investment securities within Settlement assets

The following summarizes the contractual maturities of available-for-sale securities within Settlement assets as of September 30, 2020 (in millions):

	Fair Value
Due within 1 year	$	174.8
Due after 1 year through 5 years		702.8
Due after 5 years through 10 years		470.2
Due after 10 years		834.3
Total	$	2,182.1