Settlement Assets and Obligations (Tables)
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9 Months Ended |
Sep. 30, 2021 |
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| Settlement Assets and Obligations |
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| 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). |
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| 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. |
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| 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. |
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| 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 |
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