Settlement Assets and Obligations (Tables)

6 Months Ended

Jun. 30, 2020

Settlement Assets and Obligations

Schedule of settlement assets and obligations

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

	June 30, 2020
Settlement assets:
Cash and cash equivalents	$	386.7
Receivables from agents and Business Solutions customers		1,274.3
Less: Allowance for credit losses		(40.7)
Receivables from agents and Business Solutions customers, net		1,233.6
Investment securities		1,902.0
Total settlement assets	$	3,522.3
Settlement obligations:
Money transfer, money order, and payment service payables	$	2,760.9
Payables to agents		761.4
Total settlement obligations	$	3,522.3
	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)		19.9		1.4
Write-offs charged against the allowance		(4.7)		(1.7)
Recoveries of amounts previously written off		1.2		—
Impacts of foreign currency exchange rates and other		(0.9)		0.6
Allowance for credit losses as of June 30, 2020	$	35.9	$	4.8

(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
June 30, 2020	Cost		Value		Gains		Losses		Gains/(Losses)
Settlement assets:
Cash and cash equivalents:
Money market funds	$	22.9	$	22.9	$	—	$	—	$	—
Available-for-sale securities:
State and municipal debt securities (a)		1,274.2		1,333.8		60.1		(0.5)		59.6
State and municipal variable-rate demand notes		441.3		441.3		—		—		—
Corporate debt securities		65.4		66.5		1.1		—		1.1
United States government agency mortgage-backed securities		58.7		60.4		1.7		—		1.7
Total available-for-sale securities		1,839.6		1,902.0		62.9		(0.5)		62.4
Total investment securities	$	1,862.5	$	1,924.9	$	62.9	$	(0.5)	$	62.4

					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 June 30, 2020 (in millions):

	Fair Value
Due within 1 year	$	163.8
Due after 1 year through 5 years		680.4
Due after 5 years through 10 years		463.7
Due after 10 years		594.1
Total	$	1,902.0