Settlement Assets and Obligations (Tables)

3 Months Ended

Mar. 31, 2020

Settlement Assets and Obligations

Schedule of settlement assets and obligations

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

	March 31, 2020
Settlement assets:
Cash and cash equivalents	$	553.5
Receivables from agents and Business Solutions customers		956.9
Less: Allowance for credit losses		(29.6)
Receivables from agents and Business Solutions customers, net		927.3
Investment securities		1,653.8
Total settlement assets	$	3,134.6
Settlement obligations:
Money transfer, money order, and payment service payables	$	2,427.7
Payables to agents		706.9
Total settlement obligations	$	3,134.6
	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)		8.1		0.2
Write-offs charged against the allowance		(1.7)		(1.0)
Impacts of foreign currency exchange rates and other		(1.2)		—
Recoveries of amounts previously written off		0.3		—
Allowance for credit losses as of March 31, 2020	$	25.9	$	3.7

(a) Provision does not include losses from chargebacks or fraud associated with transactions initiated through our 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
March 31, 2020	Cost		Value		Gains		Losses		Gains/(Losses)
Settlement assets:
Cash and cash equivalents:
Money market funds	$	24.3	$	24.3	$	—	$	—	$	—
Available-for-sale securities:
State and municipal debt securities (a)		1,310.7		1,347.6		38.7		(1.8)		36.9
State and municipal variable-rate demand notes		207.5		207.5		—		—		—
United States government agency mortgage-backed securities		63.1		64.5		1.4		—		1.4
Corporate debt securities		34.3		34.2		0.1		(0.2)		(0.1)
Total available-for-sale securities		1,615.6		1,653.8		40.2		(2.0)		38.2
Total investment securities	$	1,639.9	$	1,678.1	$	40.2	$	(2.0)	$	38.2

					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 March 31, 2020 (in millions):

	Fair Value
Due within 1 year	$	177.0
Due after 1 year through 5 years		622.6
Due after 5 years through 10 years		492.5
Due after 10 years		361.7
Total	$	1,653.8