Settlement Assets and Obligations (Tables)

9 Months Ended

Sep. 30, 2021

Settlement Assets and Obligations

Schedule of settlement assets and obligations

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

	September 30, 2021
Settlement assets:
Cash and cash equivalents	$	1,082.9
Receivables from agents, Business Solutions customers, and others		1,080.4
Less: Allowance for credit losses		(23.5)
Receivables from agents, Business Solutions customers, and others, net		1,056.9
Investment securities		1,437.9
Total settlement assets (a)	$	3,577.7
Settlement obligations:
Money transfer, money order, and payment service payables	$	2,809.5
Payables to agents		768.2
Total settlement obligations (a)	$	3,577.7
	December 31, 2020
Settlement assets:
Cash and cash equivalents	$	695.7
Receivables from agents, Business Solutions customers, and others		1,188.3
Less: Allowance for credit losses		(53.2)
Receivables from agents, Business Solutions customers, and others, net		1,135.1
Investment securities		1,990.6
Total settlement assets	$	3,821.4
Settlement obligations:
Money transfer, money order, and payment service payables	$	2,902.9
Payables to agents		918.5
Total settlement obligations	$	3,821.4

(a) As of September 30, 2021, both Settlement assets and Settlement obligations include $570.6 million classified as Assets held for sale and Liabilities associated with assets held for sale (see Note 4).

Schedule of activity in the allowance for credit losses

The following tables summarize the activity in the allowance for credit losses on receivables from agents and others, and Business Solutions customers (in millions):

	Agents and		Business Solutions
	Others		Customers
Allowance for credit losses as of January 1, 2021	$	49.3	$	3.9
Current period provision for expected credit losses (a)		2.3		1.5
Write-offs charged against the allowance		(3.3)		(0.4)
Recoveries of amounts previously written off		1.9		—
Impacts of foreign currency exchange rates and other		(0.5)		(0.1)
Allowance for credit losses as of March 31, 2021		49.7		4.9
Current period provision for expected credit losses (a)		3.2		1.9
Write-offs charged against the allowance		(34.4)		(0.4)
Recoveries of amounts previously written off		0.6		—
Impacts of foreign currency exchange rates and other		(0.6)		(0.1)
Allowance for credit losses as of June 30, 2021		18.5		6.3
Current period provision for expected credit losses (a)		2.3		0.5
Write-offs charged against the allowance		(4.0)		(0.8)
Recoveries of amounts previously written off		1.4		—
Impacts of foreign currency exchange rates and other		(0.7)		—
Allowance for credit losses as of September 30, 2021	$	17.5	$	6.0

	Agents and		Business Solutions
	Others		Customers
Allowance for credit losses as of January 1, 2020	$	20.4	$	4.5
Current period provision for expected credit losses (a)		8.1		0.2
Write-offs charged against the allowance		(1.7)		(1.0)
Recoveries of amounts previously written off		0.3		—
Impacts of foreign currency exchange rates and other		(1.2)		—
Allowance for credit losses as of March 31, 2020		25.9		3.7
Current period provision for expected credit losses (a)		11.8		1.2
Write-offs charged against the allowance		(3.0)		(0.7)
Recoveries of amounts previously written off		0.9		—
Impacts of foreign currency exchange rates and other		0.3		0.6
Allowance for credit losses as of June 30, 2020		35.9		4.8
Current period provision for expected credit losses (a)		8.4		0.7
Write-offs charged against the allowance		(3.3)		(0.8)
Recoveries of amounts previously written off		0.6		—
Impacts of foreign currency exchange rates and other		(0.7)		—
Allowance for credit losses as of September 30, 2020	$	40.9	$	4.7

(a) Current period provision for expected credit losses does not include losses from chargebacks or fraud associated with transactions initiated through the Company’s digital channels, as these losses are not credit related. The Company recognized losses that were not credit related of $13.7 million, $14.5 million, and $13.8 million for the three months ended March 31, 2021, June 30, 2021, and September 30, 2021, respectively, and $9.2 million, $11.5 million, and $9.1 million for the three months ended March 31, 2020, June 30, 2020, and September 30, 2020, respectively.

Schedule of components of investment securities

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

					Gross		Gross		Net
	Amortized		Fair		Unrealized		Unrealized		Unrealized
September 30, 2021	Cost		Value		Gains		Losses		Gains/(Losses)
Settlement assets:
Cash and cash equivalents:
Money market funds	$	7.6	$	7.6	$	—	$	—	$	—
Available-for-sale securities:
State and municipal debt securities (a)		1,185.0		1,232.6		48.3		(0.7)		47.6
State and municipal variable-rate demand notes		100.9		100.9		—		—		—
Corporate and other debt securities		63.3		63.7		0.6		(0.2)		0.4
United States government agency mortgage-backed securities		39.5		40.7		1.2		—		1.2
Total available-for-sale securities		1,388.7		1,437.9		50.1		(0.9)		49.2
Total investment securities	$	1,396.3	$	1,445.5	$	50.1	$	(0.9)	$	49.2

					Gross		Gross		Net
	Amortized		Fair		Unrealized		Unrealized		Unrealized
December 31, 2020	Cost		Value		Gains		Losses		Gains/(Losses)
Settlement assets:
Cash and cash equivalents:
Money market funds	$	13.1	$	13.1	$	—	$	—	$	—
Available-for-sale securities:
State and municipal debt securities (a)		1,234.1		1,303.9		69.8		—		69.8
State and municipal variable-rate demand notes		562.1		562.1		—		—		—
Corporate and other debt securities		71.6		72.8		1.2		—		1.2
United States government agency mortgage-backed securities		50.3		51.8		1.5		—		1.5
Total available-for-sale securities		1,918.1		1,990.6		72.5		—		72.5
Total investment securities	$	1,931.2	$	2,003.7	$	72.5	$	—	$	72.5

(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, 2021 (in millions):

	Fair Value
Due within 1 year	$	180.2
Due after 1 year through 5 years		604.6
Due after 5 years through 10 years		465.8
Due after 10 years		187.3
Total	$	1,437.9