Tuesday, February 27, 2007

Business Case for Back Office Conversion (BOC)-Webinar

Thursday, March 15, 2007 (click here to register)
Time: 2:00 – 3:00 pm EST 1:00 – 2:00 pm CST
12:00 – 1:00 pm MST 11:00 am – 12:00 pm PST
FREE Webinar for TAWPI PCC members and Payments in Transition conference attendees!

Beginning March 16, 2007 many retailers and billers will be allowed to convert eligible checks to ACH debits in the back-office. Known as back-office conversion, or BOC, the new rules will enable financial institutions to provide additional value to their customers in a business environment where many checks are still used. Back-office conversion will also allow financial institutions to convert eligible checks received in image files to ACH debits.

This webinar will review:
Rules of the BOC application.
Potential BOC workflow(s).
Benefits and challenges of implementing BOC for RDFI, Receiver, Originator, ODFI.
Customer service training and awareness techniques.

If you are getting ready for BOC implementation, you need to participate in this webinar.

THE SPEAKERS: Kristine Oberg, VP, Product Development Group Manager, U.S. Bank

Amy Gutierrez, VP Strategic Market Development, NOVA Information Systems

WHO SHOULD ATTEND: Business, operations, IT and product strategists responsible for payments and cash management within an organization.

Monday, February 26, 2007

Moving Money-Treasury Management Group looks to Tackle Remote Capture

by Harvey Spencer contributing editor and published in TAWPI's TODAY Magazine click here for a complimentary subscription to TODAY.

Back in 1980 when I worked for NCR in Dayton, OH, I was responsible for implementing one of the early PC based Treasury Workstations. This software kept track of a company’s investments and then dialed the corporation’s bank accounts before the Treasurer arrived. By the time he arrived at 8:00 am, he had a complete cash position laid out and could make investment decisions faster. We were going to sell this to the banks so that they could sell them to their customers. As my Beta site, I installed this into NCR’s Treasury Department – then a $5 billion company – and the Treasurer reckoned that he gained two basis points in the market through having faster access to this information a lot of money. This all came back to me as I contemplated the impact of Check 21 and the push to install Remote Capture systems by Banks in corporations. As with Remote Capture, the banks thought that since the Treasury Workstation would give better control to their customers, they could create a closer liaison with them by selling these systems. This proved fallacious as large corporations, such as NCR, wanted to control their own relationships and did not want the banks’ systems in their Treasury areas. We are now seeing the same scenario played out –the banks want to put remote capture stations into corporations.
They cite the major reasons as being:

_ Improved Float Elimination of transportation/courier costs
_ Branch Account Consolidation
_ Fewer Processing Errors
_ Convenience and Safety
These are clear benefits, and from the bank’s viewpoint it saves
major costs, since their customer is effectively performing the
expensive proof and encode operation instead of them. However,
the problem with this approach is that it ignores the needs of the
corporation. What happens if the company wants to change its
major banking supplier? Must it return its Remote Capture system?
While I think that Remote Capture as supplied by Banks will be
successful in the SMB market, I doubt that it will fly in large corporations
over the longer term. As with the Treasury Workstation,
large corporations will want their own systems and will use the X9
standards to deliver standardized images to the banks they choose
or to a 3rd party service.
Clearly, they will vary this in order to:
_ Reduce costs
_ Reduce bank accounts
_ Optimize cutoff times
_ Improve float

The banks will compete fiercely on this, but they now have a different playing
field from the traditional paper based one. For instance at – a Kansas bank – told me that they had extended their Check 21 today value cutoff to 6:00 pm Central
Time. Well that is fine if you on the East Coast, but if you are in California,
it is 4:00 pm – not much better than traditional times and a West Coast bank who makes their cut-off at 6pm gives East Coast companies up until 9:00 pm to deposit their check images. Services are appearing to facilitate this flexibility and decide how best to clear items. For example CheckFree introduced a service to enable automated clearing decisions to be made in order to leverage the new NACHA BOC rules which allow a small quantity of business checks to be cleared through lower cost ACH. SWIFT – used by banks to enable the secure movement of transactions internationally which corporations could only access through bank partnerships announced an enhanced Corporate Access capability named SCORE, which allows publicly listed corporations to electronically interact with a closed group of participating financial organizations. It is slowly reducing banking control. In addition, Remote Capture effectively means that a two-step operation must be performed:

1. Scan and balance the payments sending the check images
and cash letter to the bank
2. Post the payment to the AR system

It seems that it would be much more effective to integrate the posting with the capture. Two solutions I saw were Remitco, which is offering customized solutions to enable this integration, and, Creditron, a small Canadian that company has integrated into Microsoft Dynamics (formerly Great Plains). Trintech, specializing in transaction verification, is expanding into integration. From the perspective of TAWPI members, this seems like an emerging opportunity. On one side we have Invoice or AP processing starting to be installed – these systems, particularly when linked with procure-to-pay solutions allow far better and faster management of outgoing payments. On the other side we have Remittance or AR which is changing with the advent of remote capture, ARC and Check 21 and is becoming more integrated and distributed. Together the Corporate Treasurer can gain better and faster control over both the outgoing and incoming cash. At present, most Treasurers get end of day cash reporting – but more advanced companies are getting intra-day reporting. The business future will require real-time reporting but that is some way off according to Bent Benjaminsen, Senior Vice President Strategic Initiatives at Avantgard, a subsidiary of Sungard Systems. Linking AP and AR systems provides potentially huge benefits to major corporations and it seems that many AP and AR inputs will continue to be paper based. Like the Treasury Workstations of old, the bank controlled Remote Capture solution will not hold up in
major corporations, but its adoption will open doors to systems from those companies who capture paper and integrate with the AR systems as well as order-to-cash. But I predict that those who can provide integration of both AP and AR systems automation will be the big winners.

Tuesday, February 13, 2007

eChecks- Improving your work process on the receiving end...

As a TAWPI Member you gain full access to our listserve; a community of practitioners and providers bouncing ideas and working on ways to improve their work process in the check and document automation industry. This listserve question came in which generated some interest and may be something your operation is struggling with as well:

Question: "We are a Utilities Company who is struggling with echecks. We currently receive hundreds of paper "echecks" from our customers. These checks I am referring to are ones where the banks offer bill payment services. It works great for our customers, however on the receiving end of the echeck, it is very time consuming and allows much room for human error, as these payments are posted to the customers accounts without a remittance stub and not through our automated system, but through a customer service representative's cash drawer. We are looking to change that. What is the best way to go about capturing all or most of these echecks and sending us some kind of posting file?


Answer (given by an end-user Utility Co.) : It depends on where these are coming from. If they are from one "consolidator" (someone who issues the checks from a variety of banks), it is best to work with the operations department of that consolidator to receive a electronic file.
We had numerous checks that we used to receive in this manner, but over time they gradually become consolidated through other means. The bank may have become consolidated under Checkfee or Paymode for example. It is sometimes difficult and tedious to create a electronic file, but in the long run it also helps the customer.

Answer (given by a TelCo end-user) "I work for a telecommunications company in Canada and we receive electronic payment files from the banks for all our APA payments except nonscannable. The payment stub is sent from the processing sites for the FI's (here some of the processing sites process for more then one financial institution) to out lead banks processing site. We receive a file daily of the scannable stubs and the non scannable stubs are sent to our mail processing site for processing. As we move to truncation (equivalent to your Check 21) the paper stubs of course are eliminated and we're just receive the file that has been centralized through our lead bank. Our company eliminated the processing of APA payments without a stub a few years ago. As we currently have more then one billing system that we process payments for the FI's have the scanline definition for each of them and have a different electronic payment file layout for most of them to they can be transmitted to us. All our payment files including APAs and telephone/internet banking payments are send to our Payment Gateway. The Payment Gateway is part of our centralized process and at the end of the day transmits payments files from all sources to each of the billing systems. The comment below about setting up the electronic file and testing etc being long and tedious is true but we found it well worth it. It helped make the truncation process seamless to us and our customer. Also we are in the process of consolidating our billing systems and are able to do this with little or no impact to the customers as we move them from one billing system to another and in some cases change their account information."
Answer: (given by Insurance end-user) "Our company has arranged for a service from Chase bank that Chase calls "ACH Receiver Services."For their "ACH Receiver Services" product, Chase has arrangements with the large companies (e.g., CheckFree, Metavante, MasterCard RPPS) that are the back end service provider for many bank bill payment services.We provided information to Chase (such as our remittance processing addresses and account number formats). We worked through Chase to set up the arrangements with bill payment providers CheckFree, Metavante and MasterCard RPPS. At start-up, we exchanged some files with the bill payment providers to convert existing mutual customers to the electronic payment feed process.When new customers enter us as a "payee" at their bank and provide our remittance address and account number, the bill payment provider sends the payments to Chase electronically and Chase sends the payments to us electronically (as ACH transactions).We now receive over 30,000 payments a month that used to come to us as "check only" transactions through ACH Receiver Services.We chose the Chase product rather than making arrangements with each bill payment provider to avoid the challenge of negotiating trading partner agreements to start the program and managing multiple inbound transmission from each bill payment provider."
Answer: (given by an end-user Service Bureau) "We have worked with the vendors like checkfree, online resources, metavante, cass etc...to have them send those payments to us in an electronic file, we then pull in the electronic file with our mail payment file and send to client for posting to their receivable system. This works very well for us, and reduces the human error factor. "
Let us hear from you.....What are your recommendations or struggles?

Friday, February 9, 2007

Transition to Remote Capture Helps Drive Increased Demand for Low-Volume, Image-Based Remittance Solutions

By Mark Brousseau

While many industry observers describe the market for high-volume remittance solutions as sluggish, the market for low-volume, image-based remittance solutions is going strong, especially among organizations that process less than 5,000 payments a day. Wally Vogel, president and founder of Mississauga, Ontario, Canada-based Creditron, Inc., believes the low-volume market will not only stay strong, but also will likely see accelerated growth.

Creditron expects solid growth in 2007, Vogel noted, adding that the company has received so many orders already that it is expanding operations to keep up. What’s more, Vogel said Creditron’s level of inquiries and interest from prospective clients is higher than ever, which bodes well for the future. The interest is coming from all of the vertical markets Creditron serves, including government, utilities, insurance, banking, newspapers and non-profits.

To what does Vogel attribute this growth? One factor is the transition to remote deposit capture, which is increasing demand for image-based remittance solutions. “In the past, organizations had three options for processing remittance payments: in-house manual processing, in-house automated processing, and outsourced lockbox processing,” Vogel explained. “For those organizations that decide to take advantage of remote deposit, option No. 1 no longer is available: the Fed accepts images, but it won’t accept hand-drawn facsimiles. Checks will need to be scanned, and that means imaging equipment and software that can also be used to facilitate automation.” Since the majority of low-volume remittance operations currently process manually, there will be a significant drive toward imaging and automation – whether that means purchasing an in-house system or outsourcing to a lockbox.

Additionally, more low-volume remittance processors are discovering the business benefits of automating with image technology. Vogel noted that, “The benefits of automation and remote deposit apply to any organization that receives payments, although each vertical has its own unique needs which need to be addressed. We find clients are looking for increasing levels of automation through advanced recognition technologies, software features that handle complex business rules, and automation of reporting, A/R updates, and other functions. They want technology that requires little if any human intervention to handle the remittance process.”

Vogel will be speaking at TAWPI’s Payments in Transition conference in March.

Mark Brousseau is the facilitator of TAWPI’s Payments Capture & Clearing Council and Forms Processing Leadership Council. He also is president of Brousseau & Associates, a strategic marketing and PR firm specializing in the payments and document automation arenas. Brousseau can be reached at 717-767-2574 or via m_brousseau@msn.com.

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What To Make of the Drop in Substitute-Check Volume?

By Mark Brousseau

Paper-weary check processing managers (and, aren’t they all?) undoubtedly cheered when they read the article this week in Digital Transactions stating that the total paper substitute-check (or image replacement document) volume cleared is now falling for the first time.

Of the total image-exchange volume in November, paying banks cleared 58.6 percent as images, Digital Transactions reported, with the remainder being handled as substitute checks –the paper printouts of check images provided for under the Check 21 legislation. Banks that aren’t equipped to receive images from banks of first deposit can clear the substitute checks.

As the pub noted, the dip in substitute-check volume may lend credence to arguments that conversion to end-to-end image clearing is moving more quickly than some bankers thought. And it’s ironic that Digital Transactions’ article came on the heels of news that NACHA was abandoning its Check-ACH Coalition, designed to goose the electronic clearing migration.

But while he was encouraged by the news from Digital Transactions, one long-time check processing solutions vendor I spoke with wasn’t ready to declare the battle against substitute-checks over just yet. “Until we see a trend established over a period of several months, I am hesitant to call this anything but an anomaly,” he said. Killjoy? Maybe. But he points out that, according to the same Digital Transactions article, 34 percent of banks are now capable of receiving image exchange files. “That means that we have twice that many banks to bring up to speed,” he explained. And the unanswered question is: what is the breakdown of large, mid-tier and community banks that still need to get onboard. Knowing this information would give us a clearer picture of where the industry truly stands in its move toward electronic clearing.

Still, one can hope.

Mark Brousseau is the facilitator of TAWPI’s Payments Capture & Clearing Council and Forms Processing Leadership Council. He also is president of Brousseau & Associates, a strategic marketing and PR firm specializing in the payments and document automation arenas. Brousseau can be reached at 717-767-2574 or via m_brousseau@msn.com.

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Wednesday, February 7, 2007

Is it the Last Dance for Remote Deposit Capture Vendors?

By Mark Brousseau

Could the party already be winding down for remote deposit capture vendors? Possibly, warns Clint Shank, president of Omni-Soft, the parent company of SortLogic SYSTEMS. He thinks RDC technology vendors should be terrified that companies such as PeachTree, Intuit, FRx Software and Microsoft will integrate remote deposit capture capabilities into their accounting packages, and snatch their potential market share for the red-hot technology.

As evidence, Shank points to last week’s announcement that BankServ is offering its DepositNow system for online bank deposits through Windows Vista Business & PASS Commerce Center. Businesses that subscribe to the DepositNow service can scan checks using a desktop PC, then deposit them online without making a trip to the bank. A second version of the product, DepositNow A/R, also reads the handwritten dollar amount on a check, then automatically matches it to the correct customer and invoice in the popular QuickBooks or PeachTree accounting programs. A version of DepositNow A/R integrated with Microsoft’s Small Business Accounting system also will be introduced soon.

This integration of remote deposit capture with receivables technologies makes perfect sense to Shank. Billers are shifting their focus from automating individual A/R tasks to better managing the flow of receivables information. The idea is to streamline A/R procedures to improve working capital management, achieve labor savings, increase posting accuracy, eliminate so-called information float, and enhance service to internal and external customers.

Shank reasons that it’s only a matter of time before the accounting vendors take on the remote deposit capture functions themselves. There’s no reason for them to leave that money on the table, and give up a chance to add value to the products. Then it will be hard for the RDC technology vendors to make headway in these segments, or snag healthy margins.

How much time do the RDC technology vendors have left before the party is over? Shank’s not sure. But he believes they better strike fast, because the band is already packing up.

Mark Brousseau is the facilitator of TAWPI’s Payments Capture & Clearing Council and Forms Processing Leadership Council. He also is president of Brousseau & Associates, a strategic marketing and PR firm specializing in the payments and document automation arenas. Brousseau can be reached at 717-767-2574 or via m_brousseau@msn.com.

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Tuesday, February 6, 2007

Sunny Forecast for Remittance Outsourcing

By Mark Brousseau

Expect another strong year for remittance outsourcing in 2007. That’s according to FTP Consulting Services President Steve McNair, who sees growing interest in outsourcing from medium to large-volume remittance processors. Top reasons? The lack of differentiation among in-house remittance systems, the changing cost structures as a result of declining check volumes, and the pressure at more companies to outsource non-core functions.

“Reductions in check volumes, and the move to electronic payments, are hurting some in-house remittance operations by driving up the unit costs to process paper items,” McNair stated. “And with declining paper volumes, it is difficult to build a business case to replace an outdated remittance system. Outsourcing offers a more attractive business model.”

What’s more, the transition toward check image exchange and accounts receivable check (ARC) conversion is driving down the processing costs of most outsourcers, providing them with economies of scale that are rarely available to in-house remittance operations.

“The big winners will be the outsourcing providers that partner with banks to offer a bundled remittance offering that is attractive compared to in-house processing,” predicted McNair. “The billers also win in that they will reduce, or at least stabilize, their remittance costs.”

Long-term, McNair believes that the prospects for remittance outsourcing are good. “With mounting corporate pressure to reduce operations costs, medium to large-volume remittance processors will continue to find it difficult to justify maintaining in-house systems,” he said, adding that sales of in-house remittance systems in these segments likely will decline.

Mark Brousseau is the facilitator of TAWPI’s Payments Capture & Clearing Council and Forms Processing Leadership Council. He also is president of Brousseau & Associates, a strategic marketing and PR firm specializing in the payments and document automation arenas. Brousseau can be reached at 717-767-2574 or via m_brousseau@msn.com.

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Monday, February 5, 2007

Forms Processing and Data Capture Trends – Analytical Results Revealed Free Webinar

When: Thursday, February 22, 2007 Time: 2:00 – 3:00 pm EST

Forms processing innovation has become the driving force behind document capture and, in the process, is spreading way beyond the traditional forms processing applications. This Webinar will review results from the 2006 Forms Processing & Data Capture Study conducted by TAWPI and Harvey Spencer. The webinar will: identify the industry’s most innovative solution providers, reveal the latest technology in forms processing; and offer future predictions for the industry. It will provide a comprehensive assessment of forms processing, data capture and document capture systems, operations and trends with an expert panel available for questions and answers. You will hear statistical data received from 207 US-based operations:

What are forms processing operations doing today?
Hardware market-share breakdowns
Software market-share breakdowns
The latest technologies yielding high ROI
Future trends and outlook
Comparison of results with TAWPI’s 2000 Study findings. What has changed?

The Webinar will include commentary and analysis from industry practitioners on how emerging trends impact forms processing operations.

Management and operations professionals responsible for data capture, document management, imaging, fulfillment, claims processing, order processing, service bureau management, and forms processing.

Register now for this FREE Webinar!

To register online click here:

To download registration form click here