By Mark Brousseau
Hoping to make automated clearing house (ACH) processing more appealing to businesses – especially smaller ones – NACHA is doing away with its outdated opt-out provisions for Accounts Receivable Check (ARC) Conversion and Back Office Conversion (BOC) transactions.
The new rules, which will be effective March 18, reverse a longstanding policy that requires billers and merchants to let consumers choose not to have their checks converted to electronic debits. Merchants and billers will still have to give notice to customers that their checks will be converted.
NACHA sees the rules change as particularly important as smaller merchants and billers look at adopting ACH payments as an alternative to remote deposit capture (RDC), which allows businesses to create images of checks and deposit them electronically to a financial institution.
With ARC, billers are able to convert paper checks they receive from consumers at designated lockboxes into electronic transactions. With BOC, merchants can batch consumer checks throughout the day and convert them later—typically, in a back office rather than at the point of sale—into electronic debits. While ARC and BOC opt-out rates have been marginal, typically running well under 1 percent of all consumers, the handling of these exception items was a big hassle for billers.
“This is a step in the right direction for businesses,” says US Dataworks Product Manager Leilani Doyle. “Businesses no longer are required to offer opt-out indicators on their remittance documents or worry about honoring an opt-out provision, if they don’t want to. This simplifies remittance processing. But the fact is, a miniscule number of opt-outs have been requested since the ARC rule was introduced. And, consumers are only becoming more comfortable with electronic payments.”
What do you think?
Showing posts with label US Dataworks. Show all posts
Showing posts with label US Dataworks. Show all posts
Friday, February 4, 2011
Friday, October 22, 2010
Utilities grow weary of siloed payments solutions
Posted by Mark Brousseau
Rising payment processing costs may be catching up to utilities, if this week’s 13th Annual Utility Payment Conference hosted by Dominion at the Hilton Hotel in Richmond, VA, is any indication.
Historically, utility payments were among the easiest and cheapest to process, thanks in large part to the high number of full-pay transactions that included a remittance document with an OCR scan line. In fact, TAWPI’s 2009 Payments Benchmarking Survey showed that the average cost per paper-based remittance payment remained unchanged at $0.15 per item between 2005 and 2009. But the emergence of new payment channels, such as the Web and credit card, has disproportionately “taken out” so-called “clean” transactions, leaving utilities with more complex paper-based remittances. At the same time, utilities must cost-effectively manage this growing number of payment streams.
Not surprisingly, utilities in attendance at this week’s payments conference were keen on finding solutions that would consolidate both paper-based and electronic payment streams onto a single platform. Mario Villarreal, president and COO of US Dataworks, Inc. – an exhibitor at the event – can’t remember a time when utilities have shown as much interest in enterprise payments solutions.
This follows a trend I observed this summer at the Federation of Tax Administrators conference.
“The utility market is clearly thirsting for enterprise payments solutions that provide them with greater visibility, efficiency and consistency in their revenue management,” Villarreal explained.
For utilities, centralized processing is one of the key advantages of an enterprise payments approach. Villarreal says centralized payments processing is especially appealing to utilities that are expanding their geographic footprint; one utility he spoke with at the conference operates in 33 states. With an enterprise approach, utilities gain better visibility into their payments, regardless of their footprint.
Utilities see similar benefits to centralizing the archival of their payments images and data, he adds.
But vendors may be slow in getting the message, Villarreal added. “Most of the exhibitors at the conference are still taking a fragmented approach to automated utility payment processing.” The vast majority of the 38 exhibitors at the Payment Utility Conference strictly offer siloed solutions for payments applications such as remittance, cashiering, remote deposit capture or ACH processing.
In Villarreal’s eyes, that won’t solve the challenge utilities face in their payments operations.
“Until you consolidate systems and apply standard processes and controls across payment channels, you will always be saddled with inefficient and costly payments operations,” Villarreal concluded.
What do you think?
Rising payment processing costs may be catching up to utilities, if this week’s 13th Annual Utility Payment Conference hosted by Dominion at the Hilton Hotel in Richmond, VA, is any indication.
Historically, utility payments were among the easiest and cheapest to process, thanks in large part to the high number of full-pay transactions that included a remittance document with an OCR scan line. In fact, TAWPI’s 2009 Payments Benchmarking Survey showed that the average cost per paper-based remittance payment remained unchanged at $0.15 per item between 2005 and 2009. But the emergence of new payment channels, such as the Web and credit card, has disproportionately “taken out” so-called “clean” transactions, leaving utilities with more complex paper-based remittances. At the same time, utilities must cost-effectively manage this growing number of payment streams.
Not surprisingly, utilities in attendance at this week’s payments conference were keen on finding solutions that would consolidate both paper-based and electronic payment streams onto a single platform. Mario Villarreal, president and COO of US Dataworks, Inc. – an exhibitor at the event – can’t remember a time when utilities have shown as much interest in enterprise payments solutions.
This follows a trend I observed this summer at the Federation of Tax Administrators conference.
“The utility market is clearly thirsting for enterprise payments solutions that provide them with greater visibility, efficiency and consistency in their revenue management,” Villarreal explained.
For utilities, centralized processing is one of the key advantages of an enterprise payments approach. Villarreal says centralized payments processing is especially appealing to utilities that are expanding their geographic footprint; one utility he spoke with at the conference operates in 33 states. With an enterprise approach, utilities gain better visibility into their payments, regardless of their footprint.
Utilities see similar benefits to centralizing the archival of their payments images and data, he adds.
But vendors may be slow in getting the message, Villarreal added. “Most of the exhibitors at the conference are still taking a fragmented approach to automated utility payment processing.” The vast majority of the 38 exhibitors at the Payment Utility Conference strictly offer siloed solutions for payments applications such as remittance, cashiering, remote deposit capture or ACH processing.
In Villarreal’s eyes, that won’t solve the challenge utilities face in their payments operations.
“Until you consolidate systems and apply standard processes and controls across payment channels, you will always be saddled with inefficient and costly payments operations,” Villarreal concluded.
What do you think?
Friday, September 24, 2010
Information, Please!
Posted by Mark Brousseau
After years of discussion, plans to expand the Automated Clearing House (ACH) Network to facilitate the electronic transfer of supplemental remittance information may finally gain traction.
Initiatives to use the ACH rails to transfer information associated with business-to-business payments and healthcare payments were among the hottest topics at WesPay's Payments Symposium this week at the Renaissance Hotel in Long Beach, California, notes Leilani Doyle (ldoyle@usdataworks.com), product manager at US Dataworks (www.usdataworks.com), a Houston-based solutions provider.
"The ACH Network has proven to be a stable and successful payments channel," Doyle explains. "But as electronic transactions continue to gain acceptance, it is clear that the ACH Network needs to be expanded to more efficiently carry remittance information, as well as payment instructions."
Doyle notes that several initiatives already are underway to allow information to be passed along with payment instructions. The most notable effort is the new International ACH Transaction (IAT) format. "It was necessary for OFAC [Office of Foreign Assets Control] reporting that international payments include enough information with ACH transactions for proper screening. To accomplish this, addenda records were added to accommodate the required information," Doyle explains.
Now, NACHA is extending this concept to business-to-business payments, hoping to eliminate one of the largest remaining obstacles in electronifying business checks: the need to communicate remittance information. "This is not a new concept," Doyle says. "NACHA's CTX [Corporate Trade Exchange] format was a start. But the ANSI standards it relies on are too complex to be effectively used by mid-sized businesses." As an alternative, a plan is under consideration to combine standardized addenda records with XML tags that could be interpreted by both sending and receiving ACH systems. "This approach may be a real solution to the B2B ACH trade payments problem."
Another big opportunity for an expanded ACH Network lies in the healthcare space. "Imagine an ACH standard record format that allows EOB [explanation of benefits] information to be linked from within the payment," Doyle says. "Using this approach, there would be no need to send all of the EOB information around on the ACH rails. Instead, an addenda record would provide secure and specific access to EOB information in an XML format," Doyle explains, adding that this "simple and extensible" solution is designed with the healthcare market's fast-changing requirements in mind.
NACHA is hardly standing still as it puts the finishing touches on its information initiatives. The organization introduced Secure Vault, a payment system that allows consumers to pay for goods and services over the Internet, without disclosing their bank account information. "The Secure Vault payment method connects directly to a bank's online banking application where the customer enters their ID and password, and money is then transferred to the merchant using the ACH Network," Doyle says. After a lengthy pilot, Secure Vault is now "ready for primetime," Doyle says. "The Secure Vault concept is sound, but only time will tell whether the adoption rate is high enough for it to become as ubiquitous as credit card and e-check payments for Internet transactions," Doyle adds.
What do you think?
After years of discussion, plans to expand the Automated Clearing House (ACH) Network to facilitate the electronic transfer of supplemental remittance information may finally gain traction.
Initiatives to use the ACH rails to transfer information associated with business-to-business payments and healthcare payments were among the hottest topics at WesPay's Payments Symposium this week at the Renaissance Hotel in Long Beach, California, notes Leilani Doyle (ldoyle@usdataworks.com), product manager at US Dataworks (www.usdataworks.com), a Houston-based solutions provider.
"The ACH Network has proven to be a stable and successful payments channel," Doyle explains. "But as electronic transactions continue to gain acceptance, it is clear that the ACH Network needs to be expanded to more efficiently carry remittance information, as well as payment instructions."
Doyle notes that several initiatives already are underway to allow information to be passed along with payment instructions. The most notable effort is the new International ACH Transaction (IAT) format. "It was necessary for OFAC [Office of Foreign Assets Control] reporting that international payments include enough information with ACH transactions for proper screening. To accomplish this, addenda records were added to accommodate the required information," Doyle explains.
Now, NACHA is extending this concept to business-to-business payments, hoping to eliminate one of the largest remaining obstacles in electronifying business checks: the need to communicate remittance information. "This is not a new concept," Doyle says. "NACHA's CTX [Corporate Trade Exchange] format was a start. But the ANSI standards it relies on are too complex to be effectively used by mid-sized businesses." As an alternative, a plan is under consideration to combine standardized addenda records with XML tags that could be interpreted by both sending and receiving ACH systems. "This approach may be a real solution to the B2B ACH trade payments problem."
Another big opportunity for an expanded ACH Network lies in the healthcare space. "Imagine an ACH standard record format that allows EOB [explanation of benefits] information to be linked from within the payment," Doyle says. "Using this approach, there would be no need to send all of the EOB information around on the ACH rails. Instead, an addenda record would provide secure and specific access to EOB information in an XML format," Doyle explains, adding that this "simple and extensible" solution is designed with the healthcare market's fast-changing requirements in mind.
NACHA is hardly standing still as it puts the finishing touches on its information initiatives. The organization introduced Secure Vault, a payment system that allows consumers to pay for goods and services over the Internet, without disclosing their bank account information. "The Secure Vault payment method connects directly to a bank's online banking application where the customer enters their ID and password, and money is then transferred to the merchant using the ACH Network," Doyle says. After a lengthy pilot, Secure Vault is now "ready for primetime," Doyle says. "The Secure Vault concept is sound, but only time will tell whether the adoption rate is high enough for it to become as ubiquitous as credit card and e-check payments for Internet transactions," Doyle adds.
What do you think?
Tuesday, September 14, 2010
4 Reasons Government Entities may adopt Integrated Payments Hubs
Posted by Mark Brousseau
If you think your operations budgets are tight, try managing payments processing for a government entity. Badly stung by declining tax revenues, most state, county and municipal governments have squeezed their operations budgets dry. And it couldn't have come at a worse time for government operations managers: like their counterparts in the private sector, governments are struggling with how best to adapt their operations to declining check volumes and emerging payments channels.
Leilani Doyle (ldoyle@usdataworks.com), product manager at Houston-based US Dataworks (www.usdataworks.com), believes government entities may find a solution in so-called enterprise payments hubs (or integrated payments hubs), which consolidate paper-based and electronic payments into a single platform, in turn, streamlining processing and eliminating operations silos.
About one-quarter (22.2 percent) of all government entities that responded to a recent IAPP-TAWPI survey indicated that they have implemented an enterprise payments hub to consolidate paper and electronic payments. The responses from state revenue agencies nearly mirror the overall findings for this question, with 21.4 percent indicating that they have implemented an enterprise payments hub. Non-revenue state agencies and county government entities have made a little more progress in this area, with 33 percent of (non-revenue) state agencies indicating that they have implemented an enterprise payments hub, and 40 percent of county government entities (by far the highest adoption rate among the groups tracked) stating that they have implemented an enterprise payments hub.
Doyle says 4 factors could drive faster growth of enterprise payments hubs among governments:
1. Declining paper volumes. As government agencies achieve success with electronic payments, their existing paper-centric infrastructure becomes obsolete. "Paper will not go away any time soon, but there's no need to maintain equipment and applications designed to manage large volumes of paper payments," Doyle explains. "Moving forward, government entities will need an integrated payments platform that can scale up or down as needed. This type of payments processing platform operates like a utility that can be easily adjusted to changing payment types and volumes."
2. Focus on serving constituents. Implementing an integrated payments hub enables government entities to provide better service to their constituents, Doyle explains. Research can be performed from a single location. Posting is more accurate. And check images can be retrieved instantly.
3. Push to reduce bank fees and operations costs. With an integrated payments hub, government entities can consolidate their bank deposit files, putting them in a stronger position for negotiating bank fees. Inside government operations, an integrated payments hub helps government entities increase overall staff productivity by not requiring them to learn different applications for processing each payment type. Similarly, reports for staffing and efficiency can be produced from a single system, streamlining the generation of Key Performance Indicators each agency must produce.
4. Lower capital expenditures and ongoing costs. With the emergence of enterprise payments solutions that offer a Software-as-a-Service (SaaS) or hosted delivery model, government agencies can replace their aging systems with little to no upfront cost. This is a creative way to allow agencies without the budgeted dollars to replace antiquated legacy systems, Doyle says. "SaaS services also provide an added layer of security and compliance protection, starting with PCI compliance and SAS-70. This can significantly reduce risks and audit costs for government agencies." What’s more, leveraging a SaaS or hosted delivery model means government entities can offload the management of their IT infrastructure. This not only saves money, but also allows government entities to better focus on their core competency -- serving taxpayers. And this may be the biggest benefit of all.
It's for these reasons that Doyle thinks government entities may adopt integrated payments hubs.
What do you think?
If you think your operations budgets are tight, try managing payments processing for a government entity. Badly stung by declining tax revenues, most state, county and municipal governments have squeezed their operations budgets dry. And it couldn't have come at a worse time for government operations managers: like their counterparts in the private sector, governments are struggling with how best to adapt their operations to declining check volumes and emerging payments channels.
Leilani Doyle (ldoyle@usdataworks.com), product manager at Houston-based US Dataworks (www.usdataworks.com), believes government entities may find a solution in so-called enterprise payments hubs (or integrated payments hubs), which consolidate paper-based and electronic payments into a single platform, in turn, streamlining processing and eliminating operations silos.
About one-quarter (22.2 percent) of all government entities that responded to a recent IAPP-TAWPI survey indicated that they have implemented an enterprise payments hub to consolidate paper and electronic payments. The responses from state revenue agencies nearly mirror the overall findings for this question, with 21.4 percent indicating that they have implemented an enterprise payments hub. Non-revenue state agencies and county government entities have made a little more progress in this area, with 33 percent of (non-revenue) state agencies indicating that they have implemented an enterprise payments hub, and 40 percent of county government entities (by far the highest adoption rate among the groups tracked) stating that they have implemented an enterprise payments hub.
Doyle says 4 factors could drive faster growth of enterprise payments hubs among governments:
1. Declining paper volumes. As government agencies achieve success with electronic payments, their existing paper-centric infrastructure becomes obsolete. "Paper will not go away any time soon, but there's no need to maintain equipment and applications designed to manage large volumes of paper payments," Doyle explains. "Moving forward, government entities will need an integrated payments platform that can scale up or down as needed. This type of payments processing platform operates like a utility that can be easily adjusted to changing payment types and volumes."
2. Focus on serving constituents. Implementing an integrated payments hub enables government entities to provide better service to their constituents, Doyle explains. Research can be performed from a single location. Posting is more accurate. And check images can be retrieved instantly.
3. Push to reduce bank fees and operations costs. With an integrated payments hub, government entities can consolidate their bank deposit files, putting them in a stronger position for negotiating bank fees. Inside government operations, an integrated payments hub helps government entities increase overall staff productivity by not requiring them to learn different applications for processing each payment type. Similarly, reports for staffing and efficiency can be produced from a single system, streamlining the generation of Key Performance Indicators each agency must produce.
4. Lower capital expenditures and ongoing costs. With the emergence of enterprise payments solutions that offer a Software-as-a-Service (SaaS) or hosted delivery model, government agencies can replace their aging systems with little to no upfront cost. This is a creative way to allow agencies without the budgeted dollars to replace antiquated legacy systems, Doyle says. "SaaS services also provide an added layer of security and compliance protection, starting with PCI compliance and SAS-70. This can significantly reduce risks and audit costs for government agencies." What’s more, leveraging a SaaS or hosted delivery model means government entities can offload the management of their IT infrastructure. This not only saves money, but also allows government entities to better focus on their core competency -- serving taxpayers. And this may be the biggest benefit of all.
It's for these reasons that Doyle thinks government entities may adopt integrated payments hubs.
What do you think?
Thursday, July 1, 2010
I can see clearly now
Posted by Mark Brousseau
Recent advances in technology are raising the bar for payments analytics capabilities. Some of these technology enablers include: higher capacity and more affordable disk storage; database management systems with data partitioning; and evolving data warehouse capabilities. Leilani Doyle (ldoyle@usdataworks.com), product manager with US Dataworks (www.usdataworks.com) says these advances couldn't have come at a better time:
As a result of the recession, enterprises are under pressure to predict the internal performance of the organization more precisely than ever before. For organizations that do this well, the payoff includes lower costs, higher customer retention, increased responsiveness, a reduction in fraud, increased productivity and ultimately, increased profitability, explains David White of Aberdeen Group.
An Aberdeen Group benchmark report found that Best-in-Class companies used analytics solutions to improve their ability to detect risk by two and a half times, and that 76 percent of Best-in-Class organizations enjoyed a customer retention rate of 90 percent or better, thanks in part to analytics.
Drawn by these benefits, more organizations are evaluating analytics solutions, particularly for payments environments. Twenty-four percent of organizations plan to adopt analytics technologies within the next year, reports Aberdeen Group. "The fundamental drivers of adoption remain strong," says Dan Vesset, program vice president for IDC's Business Analytics Solutions Research service, adding that even during the recession, the business analytics software market continued to grow.
In payments, demands for information reporting and analysis have never been greater. Key decisions depend on the ability to accurately monitor, measure and predict operational needs and payment trends. Most organizations try to bridge legacy payment silos, only to find themselves left wanting -- despite a tremendous effort expended to integrate, report and analyze data across payment channels.
The Case for Analytics
Several trends are driving demand from payments processors for business analytics solutions:
• The need to predict the future. All operations managers, treasury executives and risk managers rely on historical data in order to properly plan for the future. The more timely and more complete the data these individuals have at their disposal, the better the predictive models can be. The same concept holds true for predicting consumer buying behaviors.
• Increasing complexity of payment types. New payment channels have emerged over the last few years, and we are certain to see the evolution of mobile payments during the next year or so. There's no question that consumers and businesses alike are rapidly changing the way they make payments. In the past, consolidating this data for analytical purposes was extremely difficult, if not impossible. Today's advanced analytics tools solve this problem.
• Fraud detection. When it comes to payments, fraudsters are becoming more sophisticated, and the economic downturn has made them more desperate than ever. Businesses need to protect their assets with superior fraud detection. A key element of any fraud detection program is the early and accurate identification of unusual patterns and behaviors. Today's advanced analytics tools give organizations the ability to analyze payments data across channels and produce actionable assessments that can prevent or stop fraudulent activity.
• Staff management. Using analytics to identify changes in peak processing windows enables organizations to better manage their staff, which have been stretched thin after the recession.
• Reduced cost. Consolidating data with an enterprise analytics solution enables organizations to decommission redundant systems, some of which are maintained only for their archived data; some large companies are sitting on old, out-of-production systems for this very reason.
The Bottom Line
Today, financial institutions, corporate billers, and government entities are challenged to manage images and data from multiple payments channels, and to provide a high-level of data protection, data accessibility, and data tracking and reporting for compliance. Adding to these challenges are ever-increasing demands for real-time analytics to improve corporate agility and customer responsiveness. Traditional siloed payment archives are too costly, too inefficient and too fragmented to be effective. The answer lies in emerging payments analytics solutions.
Using analytics solutions, organizations can finally get a clear and timely view of their operations.
What do you think?
Recent advances in technology are raising the bar for payments analytics capabilities. Some of these technology enablers include: higher capacity and more affordable disk storage; database management systems with data partitioning; and evolving data warehouse capabilities. Leilani Doyle (ldoyle@usdataworks.com), product manager with US Dataworks (www.usdataworks.com) says these advances couldn't have come at a better time:
As a result of the recession, enterprises are under pressure to predict the internal performance of the organization more precisely than ever before. For organizations that do this well, the payoff includes lower costs, higher customer retention, increased responsiveness, a reduction in fraud, increased productivity and ultimately, increased profitability, explains David White of Aberdeen Group.
An Aberdeen Group benchmark report found that Best-in-Class companies used analytics solutions to improve their ability to detect risk by two and a half times, and that 76 percent of Best-in-Class organizations enjoyed a customer retention rate of 90 percent or better, thanks in part to analytics.
Drawn by these benefits, more organizations are evaluating analytics solutions, particularly for payments environments. Twenty-four percent of organizations plan to adopt analytics technologies within the next year, reports Aberdeen Group. "The fundamental drivers of adoption remain strong," says Dan Vesset, program vice president for IDC's Business Analytics Solutions Research service, adding that even during the recession, the business analytics software market continued to grow.
In payments, demands for information reporting and analysis have never been greater. Key decisions depend on the ability to accurately monitor, measure and predict operational needs and payment trends. Most organizations try to bridge legacy payment silos, only to find themselves left wanting -- despite a tremendous effort expended to integrate, report and analyze data across payment channels.
The Case for Analytics
Several trends are driving demand from payments processors for business analytics solutions:
• The need to predict the future. All operations managers, treasury executives and risk managers rely on historical data in order to properly plan for the future. The more timely and more complete the data these individuals have at their disposal, the better the predictive models can be. The same concept holds true for predicting consumer buying behaviors.
• Increasing complexity of payment types. New payment channels have emerged over the last few years, and we are certain to see the evolution of mobile payments during the next year or so. There's no question that consumers and businesses alike are rapidly changing the way they make payments. In the past, consolidating this data for analytical purposes was extremely difficult, if not impossible. Today's advanced analytics tools solve this problem.
• Fraud detection. When it comes to payments, fraudsters are becoming more sophisticated, and the economic downturn has made them more desperate than ever. Businesses need to protect their assets with superior fraud detection. A key element of any fraud detection program is the early and accurate identification of unusual patterns and behaviors. Today's advanced analytics tools give organizations the ability to analyze payments data across channels and produce actionable assessments that can prevent or stop fraudulent activity.
• Staff management. Using analytics to identify changes in peak processing windows enables organizations to better manage their staff, which have been stretched thin after the recession.
• Reduced cost. Consolidating data with an enterprise analytics solution enables organizations to decommission redundant systems, some of which are maintained only for their archived data; some large companies are sitting on old, out-of-production systems for this very reason.
The Bottom Line
Today, financial institutions, corporate billers, and government entities are challenged to manage images and data from multiple payments channels, and to provide a high-level of data protection, data accessibility, and data tracking and reporting for compliance. Adding to these challenges are ever-increasing demands for real-time analytics to improve corporate agility and customer responsiveness. Traditional siloed payment archives are too costly, too inefficient and too fragmented to be effective. The answer lies in emerging payments analytics solutions.
Using analytics solutions, organizations can finally get a clear and timely view of their operations.
What do you think?
Thursday, April 15, 2010
The Changing ISO Space
Posted by Mark Brousseau
Based on what he's heard at the Electronic Transactions Association (ETA) Annual Meeting and Expo this week in Las Vegas, independent sales organizations or ISOs are beginning to struggle in a very saturated credit card market, says Mario Villarreal, president and COO of US Dataworks, Inc. (mvillarreal@usdataworks.com, 281-504-8150). US Dataworks is exhibiting at the ETA event.
"The various ISOs that we talked to [Wednesday] are interested in other payment platforms separate and apart from credit card services," Villarreal explains. "The ISOs understand the RDC [remote deposit capture] market, but are not attracted to it due to the narrow payment focus for a complicated implementation. One ISO representative told me he was looking for more 'bang for the buck.'"
"What ISOs are really looking for is a platform that brings multiple payment types and channels together under a single solution," he says. "The payments industry and the ISO space is changing. The question is which vendor will break away from the traditional way of doing business to win."
What do you think?
Based on what he's heard at the Electronic Transactions Association (ETA) Annual Meeting and Expo this week in Las Vegas, independent sales organizations or ISOs are beginning to struggle in a very saturated credit card market, says Mario Villarreal, president and COO of US Dataworks, Inc. (mvillarreal@usdataworks.com, 281-504-8150). US Dataworks is exhibiting at the ETA event.
"The various ISOs that we talked to [Wednesday] are interested in other payment platforms separate and apart from credit card services," Villarreal explains. "The ISOs understand the RDC [remote deposit capture] market, but are not attracted to it due to the narrow payment focus for a complicated implementation. One ISO representative told me he was looking for more 'bang for the buck.'"
"What ISOs are really looking for is a platform that brings multiple payment types and channels together under a single solution," he says. "The payments industry and the ISO space is changing. The question is which vendor will break away from the traditional way of doing business to win."
What do you think?
Sunday, April 11, 2010
How AP Trends Impact AR
Posted by Mark Brousseau
AP trends highlighted in IAPP's recent AP Automation Study are driving the need for enterprise payments hubs. Mario Villarreal, president and COO of US Dataworks (mvillarreal@usdataworks.com) explains:
Organizations that are still on the fence about the need for an enterprise payments hub may feel like they've received a proverbial shove after reading the results of a new study on accounts payable (AP) trends conducted by International Accounts Payable Professionals (IAPP), based in Orlando, FL.
IAPP's study found that while the overwhelming number of organizations still make payments via paper check (97 percent), more organizations are using automated clearing house network/electronic funds transfer (79 percent), wire transfer (59 percent) and purchasing cards (50 percent). The move towards these electronic payment channels is driven by the unique attributes they offer, the IAPP study found. ACH/electronic funds eliminates most of the costs associated with paper checks. Wire payments are primarily used for sending payments internationally. Purchasing cards enable front-line employees to make purchases within minutes instead of days, while eliminating paperwork.
While electronic payments are building momentum, the IAPP study suggests that paper checks may have staying power: an eye-popping 91 percent of invoice dollars are still paid via paper check. Similarly, AP departments also are still overwhelmingly using the mail to submit remittances advices (82 percent); it is standard, IAPP's study finds, for the envelope with the paper check to also contain the remittance advice.
So why worry about what's happening in AP? Because those payments will eventually find their way into an organization's A/R department. And most corporate remittance operations are currently structured in silos to support individual payments types, such as check, ACH, wire, and purchasing card. Each of these payments types has its own fraud and compliance components, resulting in redundant systems, lack of transparency across channels, potential processing delays, and less than optimal customer service.
Based on the results of IAPP's study, these payments processing challenges may get worse.
Enter Enterprise Payments Hubs
That's where enterprise payments hubs come in.
An enterprise payments hub allows billers to realize working capital management improvements with a single platform for processing all paper-based and electronic payments and clearing channel, in turn, driving Straight Through Processing (STP) of receivables.
An enterprise payments hub provides a consolidated, end-to-end transaction processing platform that offers integration with legacy payments and receivables systems and processes, resulting in an aggregated and centralized payments processing solution. An enterprise payments hub is capable of managing the entire payments lifecycle including payments processing, check processing, payments decisioning, and returns management -- all critical to receivables management.
Increased visibility can be realized through the use of consolidated payment monitoring and reporting, giving a more complete view of a company’s cash position. This helps companies gain centralized control of their cash and more accurate visibility into their payments and receivables.
The centralized reporting provided by an enterprise payments hub can provide internal business intelligence that can point to new revenue streams and increased cost efficiencies. Companies that can effectively view, analyze, and act on this payment information can react more quickly to receivables trends and customer service inquiries, while improving forecasting and budgeting.
An enterprise payments hub is especially effective when the multiple payments channels of an organization are centralized, as standalone systems and processes can be significantly reduced. For example, an enterprise payments hub can enhance workflow, data management and payment routing, and facilitate common processes and administration across all payment channels. This functionality eliminates manual processes, accelerates exceptions handling, increases corporate agility, and improves float. These capabilities also provide a platform for straight-through-processing (STP). Similarly, an enterprise payments hub reduces bank fees by facilitating least cost, best fit clearing.
The Bottom Line
With an enterprise payments hub, organizations can better realize the benefits of working capital management. Companies are now able to gain control and visibility over their payments processing and receivables management, which in turn offers treasurers new cash management tools. For instance, consolidating payments information in an enterprise payments hub produces a more accurate and timely view of payments. Payment streams also are consolidated for clearing. The end result is that least cost, best fit routing can be applied to payments to reduce fees and improve float.
With AP departments adopting a wider range of payment mechanisms, billers can't afford to sit on the fence any longer. To remain cost competitive -- and keep up with industry standards for accuracy and speed -- they'll need an enterprise payments hub.
What do you think?
AP trends highlighted in IAPP's recent AP Automation Study are driving the need for enterprise payments hubs. Mario Villarreal, president and COO of US Dataworks (mvillarreal@usdataworks.com) explains:
Organizations that are still on the fence about the need for an enterprise payments hub may feel like they've received a proverbial shove after reading the results of a new study on accounts payable (AP) trends conducted by International Accounts Payable Professionals (IAPP), based in Orlando, FL.
IAPP's study found that while the overwhelming number of organizations still make payments via paper check (97 percent), more organizations are using automated clearing house network/electronic funds transfer (79 percent), wire transfer (59 percent) and purchasing cards (50 percent). The move towards these electronic payment channels is driven by the unique attributes they offer, the IAPP study found. ACH/electronic funds eliminates most of the costs associated with paper checks. Wire payments are primarily used for sending payments internationally. Purchasing cards enable front-line employees to make purchases within minutes instead of days, while eliminating paperwork.
While electronic payments are building momentum, the IAPP study suggests that paper checks may have staying power: an eye-popping 91 percent of invoice dollars are still paid via paper check. Similarly, AP departments also are still overwhelmingly using the mail to submit remittances advices (82 percent); it is standard, IAPP's study finds, for the envelope with the paper check to also contain the remittance advice.
So why worry about what's happening in AP? Because those payments will eventually find their way into an organization's A/R department. And most corporate remittance operations are currently structured in silos to support individual payments types, such as check, ACH, wire, and purchasing card. Each of these payments types has its own fraud and compliance components, resulting in redundant systems, lack of transparency across channels, potential processing delays, and less than optimal customer service.
Based on the results of IAPP's study, these payments processing challenges may get worse.
Enter Enterprise Payments Hubs
That's where enterprise payments hubs come in.
An enterprise payments hub allows billers to realize working capital management improvements with a single platform for processing all paper-based and electronic payments and clearing channel, in turn, driving Straight Through Processing (STP) of receivables.
An enterprise payments hub provides a consolidated, end-to-end transaction processing platform that offers integration with legacy payments and receivables systems and processes, resulting in an aggregated and centralized payments processing solution. An enterprise payments hub is capable of managing the entire payments lifecycle including payments processing, check processing, payments decisioning, and returns management -- all critical to receivables management.
Increased visibility can be realized through the use of consolidated payment monitoring and reporting, giving a more complete view of a company’s cash position. This helps companies gain centralized control of their cash and more accurate visibility into their payments and receivables.
The centralized reporting provided by an enterprise payments hub can provide internal business intelligence that can point to new revenue streams and increased cost efficiencies. Companies that can effectively view, analyze, and act on this payment information can react more quickly to receivables trends and customer service inquiries, while improving forecasting and budgeting.
An enterprise payments hub is especially effective when the multiple payments channels of an organization are centralized, as standalone systems and processes can be significantly reduced. For example, an enterprise payments hub can enhance workflow, data management and payment routing, and facilitate common processes and administration across all payment channels. This functionality eliminates manual processes, accelerates exceptions handling, increases corporate agility, and improves float. These capabilities also provide a platform for straight-through-processing (STP). Similarly, an enterprise payments hub reduces bank fees by facilitating least cost, best fit clearing.
The Bottom Line
With an enterprise payments hub, organizations can better realize the benefits of working capital management. Companies are now able to gain control and visibility over their payments processing and receivables management, which in turn offers treasurers new cash management tools. For instance, consolidating payments information in an enterprise payments hub produces a more accurate and timely view of payments. Payment streams also are consolidated for clearing. The end result is that least cost, best fit routing can be applied to payments to reduce fees and improve float.
With AP departments adopting a wider range of payment mechanisms, billers can't afford to sit on the fence any longer. To remain cost competitive -- and keep up with industry standards for accuracy and speed -- they'll need an enterprise payments hub.
What do you think?
Friday, February 19, 2010
The Image Clearing Opportunity
Posted by Mark Brousseau
Image clearing networks provide an opportunity for bankers banks to grow their revenues and attract new customers. US Dataworks President and COO Mario Villarreal (mvillarreal@usdataworks.com) explains:
At a time when paper cash letter volumes are rapidly declining, and the banking industry approaches the "last mile" in its migration toward electronic clearing, forward-thinking banks are leveraging Check 21 and their existing IT infrastructure to offer new image clearing services to community banks. If there is one thing that bankers have learned from the credit crisis, it is that focusing on their core services can provide a huge payoff.
Bankers banks provide valuable services to community banks, allowing them to compete with their larger counterparts. Bankers banks that have invested in the best technology to clear image exchange items also can offer this as a value-priced service to other bankers banks, extending their ability to service additional community banks, reduce costs, and expand their clearing network for improved funds availability and returns processing.
The Business Case
Prior to Check 21, check clearing was an extremely labor and capital-intensive process. For this reason, most bankers banks provided only settlement services: most community banks deposited paper cash letters at their nearby Federal Reserve Bank, while community banks that weren't members of the Federal Reserve settled their items through a bankers bank.
With the adoption of image clearing reaching more financial institutions, and advances in technology eliminating the need for bankers banks to print substitute checks in order to clear all of their items, more bankers banks are discovering that they can offer check clearing services to their customers with a much smaller investment in staff and equipment than in the past.
The goal for these bankers banks is to provide a lower-cost clearing option for their community bank customers or members, while generating non-interest income through clearing fees. By establishing a regional clearinghouse for in-network financial institutions, bankers banks can help their customers achieve lower costs through direct exchanges, as well as additional discounts through the bankers banks' aggregated volume. In most cases, community banks see savings of up to 20 percent compared to Federal Reserve Bank fees. Similarly, working with a bankers bank provides lower fees to receive image files from other banks. And bankers banks can offer value-added services such as item-level duplicate detection, which reduces errors and helps identify potential fraud. Other services include long-term payment archiving, expedited research and adjustments, and payment trend analysis.
In turn, bankers banks can strengthen their customer relationships, attract new bank customers, and increase the percentage of items cleared through their network. Bankers banks that have implemented this service have increased the rate of membership in the geographic region they serve, which results in a bigger network and more value to all participants.
Bankers banks also gain operational improvements by implementing an image exchange system that is not based on the old way of paper-check processing, but designed from the ground up to process today’s growing variety of payment types. In one case, a bankers bank reduced the time necessary to complete its check image processing from eight hours to less than 45 minutes using the new standard in image exchange processing. And, unlike traditional check systems, advanced image clearing solutions allow for configuration changes -- such as adding or disabling a clearing endpoint -- without a significant lead time or custom code.
Key Buying Criteria
When evaluating clearing solutions, there are four key criteria bankers banks should consider:
1. Scalability -- Image clearing requires the processing of large volumes in an extremely short processing window, as well as the effective management of a large number of image files.
2. Exceptions handling -- To minimize costly errors, an image clearing solution must have capabilities for duplicate detection.
3. Enhanced clearing capabilities -- In order to reduce fees, a clearing solution should have capabilities for in-network and consolidated decisioning, as well as bi-directional clearing.
4. Expandability -- Because of the fast-changing nature of the financial services industry, bankers banks should look for solutions that are designed to support future services.
Other evaluation criteria include startup and ongoing costs, time-to-market, the vendor's track record in high-volume operations, any value-added functionality (such as data analytics), and the level of control the bankers bank will have over product pricing, processing deadlines and service levels.
The Bottom Line
With fee income on the line, and community banks desperate for cost-effective clearing alternatives, more bankers banks will establish internal image clearing networks to harness the cost savings of in-network clearing and direct sends to major financial institutions, Returned items and research and adjustments are also simplified with the network approach. With these networks, bankers banks can provide the highest quality of correspondent services to community banks, as well as help their colleague bankers bank serve their customers. To provide even greater benefit to their customers, some of these bankers banks will create expanded same-day exchanges and exchanges with national and regional banks, and bundle their image clearing services with cash management products such as remote deposit capture (RDC) and automated clearing house (ACH) processing.
All of this will strengthen the role of bankers banks in the emerging financial services environment.
What do you think?
Image clearing networks provide an opportunity for bankers banks to grow their revenues and attract new customers. US Dataworks President and COO Mario Villarreal (mvillarreal@usdataworks.com) explains:
At a time when paper cash letter volumes are rapidly declining, and the banking industry approaches the "last mile" in its migration toward electronic clearing, forward-thinking banks are leveraging Check 21 and their existing IT infrastructure to offer new image clearing services to community banks. If there is one thing that bankers have learned from the credit crisis, it is that focusing on their core services can provide a huge payoff.
Bankers banks provide valuable services to community banks, allowing them to compete with their larger counterparts. Bankers banks that have invested in the best technology to clear image exchange items also can offer this as a value-priced service to other bankers banks, extending their ability to service additional community banks, reduce costs, and expand their clearing network for improved funds availability and returns processing.
The Business Case
Prior to Check 21, check clearing was an extremely labor and capital-intensive process. For this reason, most bankers banks provided only settlement services: most community banks deposited paper cash letters at their nearby Federal Reserve Bank, while community banks that weren't members of the Federal Reserve settled their items through a bankers bank.
With the adoption of image clearing reaching more financial institutions, and advances in technology eliminating the need for bankers banks to print substitute checks in order to clear all of their items, more bankers banks are discovering that they can offer check clearing services to their customers with a much smaller investment in staff and equipment than in the past.
The goal for these bankers banks is to provide a lower-cost clearing option for their community bank customers or members, while generating non-interest income through clearing fees. By establishing a regional clearinghouse for in-network financial institutions, bankers banks can help their customers achieve lower costs through direct exchanges, as well as additional discounts through the bankers banks' aggregated volume. In most cases, community banks see savings of up to 20 percent compared to Federal Reserve Bank fees. Similarly, working with a bankers bank provides lower fees to receive image files from other banks. And bankers banks can offer value-added services such as item-level duplicate detection, which reduces errors and helps identify potential fraud. Other services include long-term payment archiving, expedited research and adjustments, and payment trend analysis.
In turn, bankers banks can strengthen their customer relationships, attract new bank customers, and increase the percentage of items cleared through their network. Bankers banks that have implemented this service have increased the rate of membership in the geographic region they serve, which results in a bigger network and more value to all participants.
Bankers banks also gain operational improvements by implementing an image exchange system that is not based on the old way of paper-check processing, but designed from the ground up to process today’s growing variety of payment types. In one case, a bankers bank reduced the time necessary to complete its check image processing from eight hours to less than 45 minutes using the new standard in image exchange processing. And, unlike traditional check systems, advanced image clearing solutions allow for configuration changes -- such as adding or disabling a clearing endpoint -- without a significant lead time or custom code.
Key Buying Criteria
When evaluating clearing solutions, there are four key criteria bankers banks should consider:
1. Scalability -- Image clearing requires the processing of large volumes in an extremely short processing window, as well as the effective management of a large number of image files.
2. Exceptions handling -- To minimize costly errors, an image clearing solution must have capabilities for duplicate detection.
3. Enhanced clearing capabilities -- In order to reduce fees, a clearing solution should have capabilities for in-network and consolidated decisioning, as well as bi-directional clearing.
4. Expandability -- Because of the fast-changing nature of the financial services industry, bankers banks should look for solutions that are designed to support future services.
Other evaluation criteria include startup and ongoing costs, time-to-market, the vendor's track record in high-volume operations, any value-added functionality (such as data analytics), and the level of control the bankers bank will have over product pricing, processing deadlines and service levels.
The Bottom Line
With fee income on the line, and community banks desperate for cost-effective clearing alternatives, more bankers banks will establish internal image clearing networks to harness the cost savings of in-network clearing and direct sends to major financial institutions, Returned items and research and adjustments are also simplified with the network approach. With these networks, bankers banks can provide the highest quality of correspondent services to community banks, as well as help their colleague bankers bank serve their customers. To provide even greater benefit to their customers, some of these bankers banks will create expanded same-day exchanges and exchanges with national and regional banks, and bundle their image clearing services with cash management products such as remote deposit capture (RDC) and automated clearing house (ACH) processing.
All of this will strengthen the role of bankers banks in the emerging financial services environment.
What do you think?
Wednesday, November 25, 2009
Enterprise Payments Hubs Attracting Interest
By Mark Brousseau
Challenged by new regulations, the overhead and inefficiencies of siloed payments systems, and fast-rising unit costs for paper-based transactions, more billers and banks are taking a hard look at so-called Enterprise Payments Hubs -- solutions that enable the end-to-end processing of any paper-based or electronic payments or clearing channel.
Twenty-percent of participants on a recent US Dataworks (www.usdataworks.com) Webinar stated that they plan to implement an Enterprise Payments solution in the next six to 12 months, while 25 percent of the Webinar participants stated that they plan to implement an Enterprise Payments solution in 12 to 24 months. Ten percent of the Webinar participants said they already have implemented an Enterprise Payments solution. The survey respondents included billers and financial institutions.
Backing up their plans, 25 percent of participants on the US Dataworks Webinar said they already have researched Enterprise Payments solutions.
So why the rising interest in Enterprise Payments solutions? Webinar participants cited high unit costs for transaction processing (30 percent) and the inability of their legacy systems to adapt to new payment types (15 percent) as their two biggest challenges with traditional standalone payment systems.
What do you think?
Challenged by new regulations, the overhead and inefficiencies of siloed payments systems, and fast-rising unit costs for paper-based transactions, more billers and banks are taking a hard look at so-called Enterprise Payments Hubs -- solutions that enable the end-to-end processing of any paper-based or electronic payments or clearing channel.
Twenty-percent of participants on a recent US Dataworks (www.usdataworks.com) Webinar stated that they plan to implement an Enterprise Payments solution in the next six to 12 months, while 25 percent of the Webinar participants stated that they plan to implement an Enterprise Payments solution in 12 to 24 months. Ten percent of the Webinar participants said they already have implemented an Enterprise Payments solution. The survey respondents included billers and financial institutions.
Backing up their plans, 25 percent of participants on the US Dataworks Webinar said they already have researched Enterprise Payments solutions.
So why the rising interest in Enterprise Payments solutions? Webinar participants cited high unit costs for transaction processing (30 percent) and the inability of their legacy systems to adapt to new payment types (15 percent) as their two biggest challenges with traditional standalone payment systems.
What do you think?
Tuesday, June 2, 2009
Remote Deposit Capture Still Has Legs
By Mark Brousseau
With the stratospheric growth of remote deposit capture (RemoteDepositCapture.com says it has reached over 50 percent penetration among financial institutions in less than half the time it took online banking), you might assume that interest in the technology is dying down. You’d be wrong.
At last week’s Windy City Summit in Chicago, a session on remote deposit capture drew a standing room-only crowd (some attendees even sat on the floor), and many corporate practitioners admitted that they still haven’t implemented technology, reports Leilani Doyle, product manager at US Dataworks, Inc. (ldoyle@usdataworks.com).
“While remote deposit capture is no longer new, and the market is saturated with product offerings, the technology is still growing steadily among corporations,” Doyle explains. “Corporate practitioners recognize that truncating paper as soon as possible in the process is always better.”
Doyle believes that there is more growth ahead for remote deposit capture, particularly with ISOs now selling the solution to billers who previously were an untapped audience, and with the introduction of new check scanners especially designed for billers for low transaction volumes (think: small businesses). US Dataworks plans to make product announcements in this area.
Remote deposit capture holdouts (and early adopters of the technology) also are looking for remote deposit capture solutions that allow for the centralized processing and repair of checks captured at the point of presentment. Anticipating this trend, US Dataworks designed its remote deposit capture offering to allow billers to capture items anywhere, correct them anywhere, and clear them anywhere.
Doyle said there also was a lot of talk among treasurers at the Windy City Summit about the need to reduce any excess balances in their demand deposit accounts (DDA). “Using balances to pay for services is too expensive,” Doyle explains, adding that many treasury managers were looking for a place to park their excess funds. “Not only are corporations receiving an ECR of 1 percent or less, but they also are incurring FDIC fees based on the risk category of their financial institution.”
“The macro-economic pressures of banks not willing to lend, and the Federal Reserve fund rates being at an all-time low, have put a unique spin on the treasury management professional’s job,” Doyle says. “Treasurers are spooked by high FDIC rates, the unknown risk of FDIC rate hikes to cover losses, and the fact that they can no longer use DDA balances to pay for non-credit services.”
The challenge for most treasurers is that they can’t move their banking relationship if they have a credit facility with their bank – regardless of the fees the bank changing for its cash management services: “Companies need to have access to that line or another longer term credit facility.”
In addition, some banks are changing their availability schedules, Doyle says. This is another area where Doyle thinks US Dataworks’ technology can help. With a centralized payments hub, like the one offered by US Dataworks, corporations are better prepared to choose the bank with the best availability schedule, or to dynamically change the way payments are collected based on the paying bank. “Better management of the collections side of the treasury function will provide more accurate collected balance forecasting and reduces the amount of collected balances subject to the FDIC assessment,” Doyle says. “Corporations can augment this strategy with a sweep to pay off loans if they are a net borrower, or a sweep to an investment product, if they are a net depositor.”
What do you think? Post your comments below.
With the stratospheric growth of remote deposit capture (RemoteDepositCapture.com says it has reached over 50 percent penetration among financial institutions in less than half the time it took online banking), you might assume that interest in the technology is dying down. You’d be wrong.
At last week’s Windy City Summit in Chicago, a session on remote deposit capture drew a standing room-only crowd (some attendees even sat on the floor), and many corporate practitioners admitted that they still haven’t implemented technology, reports Leilani Doyle, product manager at US Dataworks, Inc. (ldoyle@usdataworks.com).
“While remote deposit capture is no longer new, and the market is saturated with product offerings, the technology is still growing steadily among corporations,” Doyle explains. “Corporate practitioners recognize that truncating paper as soon as possible in the process is always better.”
Doyle believes that there is more growth ahead for remote deposit capture, particularly with ISOs now selling the solution to billers who previously were an untapped audience, and with the introduction of new check scanners especially designed for billers for low transaction volumes (think: small businesses). US Dataworks plans to make product announcements in this area.
Remote deposit capture holdouts (and early adopters of the technology) also are looking for remote deposit capture solutions that allow for the centralized processing and repair of checks captured at the point of presentment. Anticipating this trend, US Dataworks designed its remote deposit capture offering to allow billers to capture items anywhere, correct them anywhere, and clear them anywhere.
Doyle said there also was a lot of talk among treasurers at the Windy City Summit about the need to reduce any excess balances in their demand deposit accounts (DDA). “Using balances to pay for services is too expensive,” Doyle explains, adding that many treasury managers were looking for a place to park their excess funds. “Not only are corporations receiving an ECR of 1 percent or less, but they also are incurring FDIC fees based on the risk category of their financial institution.”
“The macro-economic pressures of banks not willing to lend, and the Federal Reserve fund rates being at an all-time low, have put a unique spin on the treasury management professional’s job,” Doyle says. “Treasurers are spooked by high FDIC rates, the unknown risk of FDIC rate hikes to cover losses, and the fact that they can no longer use DDA balances to pay for non-credit services.”
The challenge for most treasurers is that they can’t move their banking relationship if they have a credit facility with their bank – regardless of the fees the bank changing for its cash management services: “Companies need to have access to that line or another longer term credit facility.”
In addition, some banks are changing their availability schedules, Doyle says. This is another area where Doyle thinks US Dataworks’ technology can help. With a centralized payments hub, like the one offered by US Dataworks, corporations are better prepared to choose the bank with the best availability schedule, or to dynamically change the way payments are collected based on the paying bank. “Better management of the collections side of the treasury function will provide more accurate collected balance forecasting and reduces the amount of collected balances subject to the FDIC assessment,” Doyle says. “Corporations can augment this strategy with a sweep to pay off loans if they are a net borrower, or a sweep to an investment product, if they are a net depositor.”
What do you think? Post your comments below.
Wednesday, October 1, 2008
System Configuration Pitfalls
By Mark Brousseau
What is the most common mistake billers make when configuring a new remittance system? Looking at the solution with too limited of a scope, says Bob Balotsky (bbalotsky@usdataworks.com) of Houston-based US Dataworks, Inc.
“Billers may think that they are expanding their horizons by implementing a new system with advanced features and functionality,” said Balotsky, citing exceptions handling and data entry tools as two examples. “But that is not enough. Automating remittance payments that come through the mail, although valuable, doesn’t address the other ways payments are made to an organization.”
Balotsky tells me that organizations need to look beyond the remittance silo and develop an enterprise-wide payment strategy. Only then can an organization take full advantage of the available payment clearing alternatives. “In order to truly maximize organizational efficiencies, billers must take a higher-level, enterprise-wide approach,” Balotsky said.
Yolanda Sanchez (ysanchez@usdataworks.com), product manager at US Dataworks, adds that when configuring a remittance system, especially an enterprise payments solution, billers want to be sure to consider the different types of transactions that were previously in different departments, and now will be coming together: “You need to consider the total throughput.” Similarly, billers need to be sure their new solution supports emerging payment types.
Sanchez also warns billers not to fall into the trap of having a new solution replicate the tasks of a legacy system, simply because the organization is familiar with those processes. “Be sure you understand how the new system can be configured to make processes more efficient, or in some cases, eliminated,” Sanchez said. “You need to get past the mental roadblock of, ‘We’ve always done it this way.’” What do you think? Post your comments below.
What is the most common mistake billers make when configuring a new remittance system? Looking at the solution with too limited of a scope, says Bob Balotsky (bbalotsky@usdataworks.com) of Houston-based US Dataworks, Inc.
“Billers may think that they are expanding their horizons by implementing a new system with advanced features and functionality,” said Balotsky, citing exceptions handling and data entry tools as two examples. “But that is not enough. Automating remittance payments that come through the mail, although valuable, doesn’t address the other ways payments are made to an organization.”
Balotsky tells me that organizations need to look beyond the remittance silo and develop an enterprise-wide payment strategy. Only then can an organization take full advantage of the available payment clearing alternatives. “In order to truly maximize organizational efficiencies, billers must take a higher-level, enterprise-wide approach,” Balotsky said.
Yolanda Sanchez (ysanchez@usdataworks.com), product manager at US Dataworks, adds that when configuring a remittance system, especially an enterprise payments solution, billers want to be sure to consider the different types of transactions that were previously in different departments, and now will be coming together: “You need to consider the total throughput.” Similarly, billers need to be sure their new solution supports emerging payment types.
Sanchez also warns billers not to fall into the trap of having a new solution replicate the tasks of a legacy system, simply because the organization is familiar with those processes. “Be sure you understand how the new system can be configured to make processes more efficient, or in some cases, eliminated,” Sanchez said. “You need to get past the mental roadblock of, ‘We’ve always done it this way.’” What do you think? Post your comments below.
Tuesday, September 2, 2008
Benefits of Shared Services
By Mark Brousseau
Implementing a shared services approach to payments processing and clearing can help organizations build value across the enterprise, Mario Villarreal (mvillarreal@usdataworks.com), president and COO of US Dataworks said during a presentation at the 2008 TAWPI Forums & Expo in Orlando last week. With a shared services approach, organizations can process more payment types, identify new payment channels, and continue adding functionality as the industry evolves, Villarreal told attendees.
“Operations typically consist of both platform and application silos,” Villarreal said. Platform silos inhibit ability to integrate customer, bank and payment data across multiple payment methods, he noted, while application silos increase costs and operations risk due to redundant processing. In either case, the cost is high to adapt and integrate legacy systems.
“There are various reasons for these silos, but at the end of the day, they inhibit an organization’s ability to integrate valuable payments data,” Villarreal explained.
Villarreal thinks the endgame solution is for organizations to implement a shared services payment strategy; this strategy would converge around all of the types of payments that an organization might have, whether they are checks, ACH, mobile or wire. Through this framework, all payments would converge into a single payments processing platform, and tools could be used to make decisions as to the best way to clear these transactions.
Villarreal said a shared services approach offers key advantages, including reduced risk, improved compliance, better technology standardization, a single source for real-time reporting and analytics, streamlined operations costs, and future road-mapping. “There are significant benefits here from the data that is inherent in all payments,” Villarreal noted.
Has your organization implemented an enterprise payments strategy?
Post your comments below.
Implementing a shared services approach to payments processing and clearing can help organizations build value across the enterprise, Mario Villarreal (mvillarreal@usdataworks.com), president and COO of US Dataworks said during a presentation at the 2008 TAWPI Forums & Expo in Orlando last week. With a shared services approach, organizations can process more payment types, identify new payment channels, and continue adding functionality as the industry evolves, Villarreal told attendees.
“Operations typically consist of both platform and application silos,” Villarreal said. Platform silos inhibit ability to integrate customer, bank and payment data across multiple payment methods, he noted, while application silos increase costs and operations risk due to redundant processing. In either case, the cost is high to adapt and integrate legacy systems.
“There are various reasons for these silos, but at the end of the day, they inhibit an organization’s ability to integrate valuable payments data,” Villarreal explained.
Villarreal thinks the endgame solution is for organizations to implement a shared services payment strategy; this strategy would converge around all of the types of payments that an organization might have, whether they are checks, ACH, mobile or wire. Through this framework, all payments would converge into a single payments processing platform, and tools could be used to make decisions as to the best way to clear these transactions.
Villarreal said a shared services approach offers key advantages, including reduced risk, improved compliance, better technology standardization, a single source for real-time reporting and analytics, streamlined operations costs, and future road-mapping. “There are significant benefits here from the data that is inherent in all payments,” Villarreal noted.
Has your organization implemented an enterprise payments strategy?
Post your comments below.
Friday, July 18, 2008
ARC Demand Remains Strong
By Mark Brousseau
If you think soaring check-image exchange volumes have tempered interest in Accounts Receivable Check (ARC) Conversion, think again. ARC remains one of the most popular payment methods, registering steady volume increases every quarter, says US Dataworks, Inc. President and COO Mario Villarreal (mvillarreal@usdataworks.com). Industry statistics from NACHA back Villarreal up.
“Organizations with historically high volumes of B2B transactions – such as insurers and BPO providers – are showing the most interest in ARC,” Villarreal told me, noting that ARC remains the most cost-effective and operationally efficient way to handle payments.
Strong demand for ARC also is being driven by the number of low-volume B2C processors that are outsourcing their in-house operations to third-party providers who use ARC as part of their clearing.
But ARC’s growth isn’t coming at the expense of image exchange, or vice versa. In fact, users are recognizing the benefits of combining ARC and Check 21 in their operations.
“Image exchange has been used to enhance ARC because it completes electronic deposits that aren’t eligible for ACH conversion,” Villarreal told me. “The complementary relationship between image exchange and ARC commoditizes deposits, leading to a need for least cost routing/best fit clearing.”
And it’s this least cost routing/best fit clearing approach that really has Villarreal excited.
He said that most organizations recognize the immediate financial benefits of leveraging both ARC and check image exchange for clearing. But he thinks more education needs to occur on the additional benefits that can be realized when organizations break down their silos and eliminate disparate payment channels and hubs, to combine transactions and process them electronically.
“It’s not just about being able to process an ARC transaction,” Villarreal said. “It’s about what else your system can do to optimize payments processing. For example, an enterprise payments solution allows organizations to consolidate business processes and gain operational efficiencies.”
Despite the strong growth of ARC, Villarreal notes there are holdouts: “They tend to be processors who have high volumes of B2B transactions that aren’t eligible for ACH conversion. But as these processors take on more consumer work, they inevitably have to search for ARC solutions.”
What is happening to your organization’s ARC volumes? Post your comment below.
If you think soaring check-image exchange volumes have tempered interest in Accounts Receivable Check (ARC) Conversion, think again. ARC remains one of the most popular payment methods, registering steady volume increases every quarter, says US Dataworks, Inc. President and COO Mario Villarreal (mvillarreal@usdataworks.com). Industry statistics from NACHA back Villarreal up.
“Organizations with historically high volumes of B2B transactions – such as insurers and BPO providers – are showing the most interest in ARC,” Villarreal told me, noting that ARC remains the most cost-effective and operationally efficient way to handle payments.
Strong demand for ARC also is being driven by the number of low-volume B2C processors that are outsourcing their in-house operations to third-party providers who use ARC as part of their clearing.
But ARC’s growth isn’t coming at the expense of image exchange, or vice versa. In fact, users are recognizing the benefits of combining ARC and Check 21 in their operations.
“Image exchange has been used to enhance ARC because it completes electronic deposits that aren’t eligible for ACH conversion,” Villarreal told me. “The complementary relationship between image exchange and ARC commoditizes deposits, leading to a need for least cost routing/best fit clearing.”
And it’s this least cost routing/best fit clearing approach that really has Villarreal excited.
He said that most organizations recognize the immediate financial benefits of leveraging both ARC and check image exchange for clearing. But he thinks more education needs to occur on the additional benefits that can be realized when organizations break down their silos and eliminate disparate payment channels and hubs, to combine transactions and process them electronically.
“It’s not just about being able to process an ARC transaction,” Villarreal said. “It’s about what else your system can do to optimize payments processing. For example, an enterprise payments solution allows organizations to consolidate business processes and gain operational efficiencies.”
Despite the strong growth of ARC, Villarreal notes there are holdouts: “They tend to be processors who have high volumes of B2B transactions that aren’t eligible for ACH conversion. But as these processors take on more consumer work, they inevitably have to search for ARC solutions.”
What is happening to your organization’s ARC volumes? Post your comment below.
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