Monday, August 30, 2010

6 Questions to Ask When Shopping for a Remittance Solution

By Mark Brousseau

Buying a remittance processing solution has never been easy. But the combination of emerging payment and clearing channels, expanding systems integration requirements, and new customer service demands has made the process more confusing than ever.

To add some clarity, Wally Vogel (, founder and CEO of Creditron, Inc. (www.creditron) offers the following six questions to ask a prospective remittance solutions vendors.

1. How much opening and pre-sorting is required before scanning incoming remittance work?
Bearing in mind that there are often several steps required to move from unopened mail to stacks of clean sorted documents, which some remittance solutions require, Vogel suggests looking at the remittance solution in the context of the end-to-end operation. "Look for a vendor that can integrate with an efficient mail opening system and handle a variety of transaction type without requiring pre-sorting," Vogel advises.

2. What about payments that are made in person or over the web?
The mix of payments has changed and will continue to change, and spending money on a solution that only handles mail payments no longer makes sense, Vogel says. "A remittance platform worth investing in should have fully integrated cashiering, web payments, and credit card payments, with consolidated deposits, accounting updates, and reports," Vogel says.

3. Have you successfully interfaced with our ERP/accounting system/billing system/content management software before?
This is an area of potential hidden costs and problems if not addressed upfront, Vogel warns. "You have a significant investment in your information systems, and front end capture points such as remittance processing need to work seamlessly or the result will be unexpected integration work by your IS group, or worse, unforeseen problems with your data down the road," Vogel says.

4. Have you successfully implemented Check 21 Image Cash Letter with our bank before?
This is another potential problem if your remittance vendor and bank are not on the same page, Vogel says. "Don’t get caught in between. Use a vendor that has already proven that they can work with your bank, or if your bank does not have a process and certification in place for working with third party vendors consider using another bank for image cash letter services and having the funds swept to your main bank on a daily basis," Vogel recommends.

5. Is this a fully proven and tested solution or will there be any customized code?
Unless you want to be a beta tester, you should choose a vendor that has completely standardized and proven code that can be configured to your needs through parameters. "Even a small block of customized code can cause problems with reliability or integrity, and make later updates problematic and expensive," Vogel explains. "Choose a vendor with a standard codebase and an easy method to upgrade to the latest revision."

6. Are you a Microsoft Certified partner?
"If you are putting wiring in your house, you insist on a licensed electrician. If you want legal advice, you look for a lawyer that has passed the bar. Similarly, if you are choosing a remittance software provider to work in the Microsoft Windows environment, you should insist in a Microsoft Certified Partner," Vogel says. "This ensures that you are dealing with a professional and qualified organization which has made the investment in certifying their people and products before asking you to make an investment in their solutions."

Do you have any tips you can share?

1 comment:

Paul Diegelman said...

Great article Mark !

I would suggest another item for consideration:

Buyers should understand the business plan that prospective providers have for the business. With remit volumes declining 6+ percent per year, and wholesale just under 2%, providers have to sell more and more deals simply to have the same level of activity at the end of the year they had at the beginning. This puts financial strain on providers if their sales message is not resonating, or they cannot lean out their operations fast enough to keep up with the volume declines.

If you look back over the past 10 years, the marquee names who have abandoned the business are significant. Just because a provider has tenure doesn't mean they won't exit the business. Some of the biggest, most tenured providers have exited, and when they go, they typically give clients 90-120 days notice, which most clients don't see as enough time to thoughtfully respond and start a search for a replacement.

In summary - small providers might not make it, and big providers might not want to make it.