Posted by Mark Brousseau
Pre-paid cards are primed for explosive growth in the coming year, according to a survey conducted by Firstsource Solutions.
Fifty percent of payment industry professionals surveyed expect wider adoption of pre-paid cards as more consumers move away from credit cards and cash. Nearly 30 percent of respondents said that more consumers would become “loaders” (i.e. depositing more money to their pre-paid accounts).
“We’re seeing a growing interest in pre-paid cards in consumer segments that weren’t originally drawn to using such a form of payment,” says Tim Smith, senior vice president, Banking Financial Services & Insurance, Firstsource. “Our findings support recent research about the upward trend in the pre-paid market which shows that an estimated $37 billion was loaded onto prepaid cards last year, compared to $18 billion in 2009 and $9 billion in 2008.”
Survey respondents indicated that there is a huge opportunity for the pre-paid market to expand its customer base beyond the most likely consumer targets. More than 40 percent indicated that increased scrutiny from regulators regarding loading and set-up fees will pose the greatest risk to the industry. Additionally, 47 percent said educating card holders on the nuances of a pre-paid will be critical to successful adoption and overall growth in the market.
Firstsource’s survey also examined sentiment on the current regulatory climate in the payments industry. While Dodd-Frank was top-of-mind for 45 percent of payments professionals, the Consumer Financial Protection Act has fallen off the radar for most industry executives (only 9 percent of respondents indicated it was currently a priority issue).
What do you think?
Showing posts with label ACH. Show all posts
Showing posts with label ACH. Show all posts
Thursday, June 2, 2011
Friday, May 13, 2011
Best operations-improving strategies
By Mark Brousseau
During a pre-conference networking lunch at Fusion 2011 at the Gaylord Palms Resort and Convention Center in Florida, attendees were asked to share the best operations-improving strategy that their accounts payable (AP) department has implemented in the past 12 months. Here are the operations strategies that the luncheon attendees said were the most effective during the past year:
... Provided AP processors with two computer monitors, reducing errors and increasing efficiency
... Took the time to better understand AP processes (became "black belts" in evaluating processes) to weed out the processes that don't add value
... Migrated more payments from paper check and wire transfer to automated clearing house (ACH) transactions
... Separated straight-through and exceptions processors
... Deployed a new enterprise resource planning (ERP) solution
... Deployed a purchasing card program
... Became more open-minded to new ideas
... Started reimbursing via a debit card since some people won't take direct deposit and paper checks are too costly and inefficient
... Began measuring and improving input quality, in turn, increasing AP productivity without changing any processes
... Began e-mailing and faxing remittances to save time and postage associated with paper remittances
... Developed a proprietary travel and expense (T&E) reporting system
... Brought AP functions previously done in India back in-house, resulting in savings of $26,000 a month, largely from fewer mistakes
... Implemented an imaging and workflow solution, reducing processing time and enabling all staff to know where an invoice stands in the approval process
... Standardized on one system and one process whenever possible
... Implemented virtual card payments
... Automated accounts receivable (AR) refunds
... Consolidated various overnight shipping and cellular phone accounts into "master" accounts, allowing the company to negotiate discounts of 18 to 50 percent off list prices
... Automated payroll processing with ACH
... Eliminated duplicate vendors, in turn, eliminating many duplicate payments
What is the best operations-improving strategy your AP department has implemented in the past 12 months? Post it below.
During a pre-conference networking lunch at Fusion 2011 at the Gaylord Palms Resort and Convention Center in Florida, attendees were asked to share the best operations-improving strategy that their accounts payable (AP) department has implemented in the past 12 months. Here are the operations strategies that the luncheon attendees said were the most effective during the past year:
... Provided AP processors with two computer monitors, reducing errors and increasing efficiency
... Took the time to better understand AP processes (became "black belts" in evaluating processes) to weed out the processes that don't add value
... Migrated more payments from paper check and wire transfer to automated clearing house (ACH) transactions
... Separated straight-through and exceptions processors
... Deployed a new enterprise resource planning (ERP) solution
... Deployed a purchasing card program
... Became more open-minded to new ideas
... Started reimbursing via a debit card since some people won't take direct deposit and paper checks are too costly and inefficient
... Began measuring and improving input quality, in turn, increasing AP productivity without changing any processes
... Began e-mailing and faxing remittances to save time and postage associated with paper remittances
... Developed a proprietary travel and expense (T&E) reporting system
... Brought AP functions previously done in India back in-house, resulting in savings of $26,000 a month, largely from fewer mistakes
... Implemented an imaging and workflow solution, reducing processing time and enabling all staff to know where an invoice stands in the approval process
... Standardized on one system and one process whenever possible
... Implemented virtual card payments
... Automated accounts receivable (AR) refunds
... Consolidated various overnight shipping and cellular phone accounts into "master" accounts, allowing the company to negotiate discounts of 18 to 50 percent off list prices
... Automated payroll processing with ACH
... Eliminated duplicate vendors, in turn, eliminating many duplicate payments
What is the best operations-improving strategy your AP department has implemented in the past 12 months? Post it below.
Tuesday, April 12, 2011
NACHA's Wheels
By Mark Brousseau
NACHA's Pay It Green sport utility vehicle (SUV) at its Payments 2011 conference last week in Austin, Texas.
NACHA's Pay It Green sport utility vehicle (SUV) at its Payments 2011 conference last week in Austin, Texas.
Wednesday, April 6, 2011
No end in sight to paper checks
By Mark Brousseau
While the Federal Reserve Bank’s latest figures show that electronic payments continue to achieve strong growth, the data also suggests we’re still a long way off from the eagerly-anticipated “checkless” society.
With 28.8 billion checks written in 2010 -- the last year the Federal Reserve researched -- the number of checks written between 2007 and 2010 declined by about 6 percent per year. What’s more, 92 percent of checks are now cleared electronically between U.S. banks, according to the Federal Reserve’s research.
So what should remittance processors make of this data?
“It’s clear that U.S. check volumes continue to decline at a gradual rate,” says Creditron Founder and CEO Wally Vogel, “But checks are not likely to disappear any time soon.” While those might be sobering words from some paper-weary operations managers, they can take heart in the fact that paper deposits – a drag on costs and efficiency – are experiencing a rapid decline as Check 21 emerges as the method of choice for deposits (Vogel points to NACHA figures showing a big drop in Accounts Receivable Check Conversion volumes). “This is bad news for manufacturers of high-volume check encoding equipment, but it’s a great opportunity for providers of Check 21 remote deposit technology. There are many remittance shops that manually process their transactions, or have outdated solutions that don’t support Check 21. With banks continuing to lower their fees for Check 21 deposits, many of these shops will likely look for electronic solutions.”
Vogel notes that Creditron has recently seen strong demand for its Check 21 remote deposit capabilities. “The market is recognizing the value of remittance solutions that offer Check 21 remote deposit, as well as an image-based workflow. Against this backdrop, I think we are well-positioned for success and growth.”
What do you think?
While the Federal Reserve Bank’s latest figures show that electronic payments continue to achieve strong growth, the data also suggests we’re still a long way off from the eagerly-anticipated “checkless” society.
With 28.8 billion checks written in 2010 -- the last year the Federal Reserve researched -- the number of checks written between 2007 and 2010 declined by about 6 percent per year. What’s more, 92 percent of checks are now cleared electronically between U.S. banks, according to the Federal Reserve’s research.
So what should remittance processors make of this data?
“It’s clear that U.S. check volumes continue to decline at a gradual rate,” says Creditron Founder and CEO Wally Vogel, “But checks are not likely to disappear any time soon.” While those might be sobering words from some paper-weary operations managers, they can take heart in the fact that paper deposits – a drag on costs and efficiency – are experiencing a rapid decline as Check 21 emerges as the method of choice for deposits (Vogel points to NACHA figures showing a big drop in Accounts Receivable Check Conversion volumes). “This is bad news for manufacturers of high-volume check encoding equipment, but it’s a great opportunity for providers of Check 21 remote deposit technology. There are many remittance shops that manually process their transactions, or have outdated solutions that don’t support Check 21. With banks continuing to lower their fees for Check 21 deposits, many of these shops will likely look for electronic solutions.”
Vogel notes that Creditron has recently seen strong demand for its Check 21 remote deposit capabilities. “The market is recognizing the value of remittance solutions that offer Check 21 remote deposit, as well as an image-based workflow. Against this backdrop, I think we are well-positioned for success and growth.”
What do you think?
Same-day ACH suffering from “chicken and the egg” syndrome?
By Mark Brousseau
With remote deposit capture continuing to enjoy strong growth, some attendees at this week’s NACHA Payments conference in Austin, Texas, were left wondering what has become of same-day Automated Clearing House (ACH) transactions – the hottest (and arguably most controversial) topic at NACHA Payments a few years back. The answer may be sobering for those who thought same-day ACH would be a clearly more appealing alternative to the same-day availability afforded by remote capture.
“The lack of same-day availability has always been a weakness of ACH,” notes Affirmative Technologies Chief Technology Officer George Bassous.
“Same-day ACH should be a magic bullet when it comes to turning back the rising volume of deposits made via Check 21 remote capture,” he says. “After all, Check 21 remote capture is a case of moving forward by taking two steps back: in order to get same-day availability, it requires the biller to continue dealing with checks.”
Bassous says there are a lot of advantages to same-day ACH. Chief among them, he said, is the ability to know much sooner whether a transaction is being returned. “Virtually any biller would be very interested in same-day ACH,” Bassous claimed.
So why hasn’t same-day ACH had better traction, much less driven back the growth of Check 21 remote capture transactions? “The issue is that the systems used by the ACH banks – particularly large ones – are so tied into old technology that when something new like same-day ACH comes along, they can’t do anything about it. This is the same issue that Secure Vault Payments is having. The situation with same-day ACH is a classic case of ‘chicken and the egg,’” Bassous explained.
Bassous doesn’t buy the argument that some banks won’t offer same-day ACH because they are afraid of cannibalizing their lucrative wire transfer volumes: “I haven’t heard that from banks and I think cards would be the bigger threat there.”
The bottom line is that many banks are not set-up for same-day ACH.
What do you think?
With remote deposit capture continuing to enjoy strong growth, some attendees at this week’s NACHA Payments conference in Austin, Texas, were left wondering what has become of same-day Automated Clearing House (ACH) transactions – the hottest (and arguably most controversial) topic at NACHA Payments a few years back. The answer may be sobering for those who thought same-day ACH would be a clearly more appealing alternative to the same-day availability afforded by remote capture.
“The lack of same-day availability has always been a weakness of ACH,” notes Affirmative Technologies Chief Technology Officer George Bassous.
“Same-day ACH should be a magic bullet when it comes to turning back the rising volume of deposits made via Check 21 remote capture,” he says. “After all, Check 21 remote capture is a case of moving forward by taking two steps back: in order to get same-day availability, it requires the biller to continue dealing with checks.”
Bassous says there are a lot of advantages to same-day ACH. Chief among them, he said, is the ability to know much sooner whether a transaction is being returned. “Virtually any biller would be very interested in same-day ACH,” Bassous claimed.
So why hasn’t same-day ACH had better traction, much less driven back the growth of Check 21 remote capture transactions? “The issue is that the systems used by the ACH banks – particularly large ones – are so tied into old technology that when something new like same-day ACH comes along, they can’t do anything about it. This is the same issue that Secure Vault Payments is having. The situation with same-day ACH is a classic case of ‘chicken and the egg,’” Bassous explained.
Bassous doesn’t buy the argument that some banks won’t offer same-day ACH because they are afraid of cannibalizing their lucrative wire transfer volumes: “I haven’t heard that from banks and I think cards would be the bigger threat there.”
The bottom line is that many banks are not set-up for same-day ACH.
What do you think?
Monday, April 4, 2011
Top 10 reasons FIs have the advantage in payments
At NACHA’s Payments 2011 in Austin, Texas, today, Fiserv released its Top 10 reasons why financial institutions have the advantage in the battle for consumer payments, including Web and social media payments.
Those reasons are:
1. Consumers express a strong preference for a financial institution-centric new media payments system, according to Fiserv primary and sponsored research.
2. Customers already have an account relationship with their financial institution.
3. Financial institutions have payment systems that are robust, and secure.
4. Financial institutions have extensive fraud prevention, detection, and resolution operations in place.
5. Financial institutions are held to strict privacy practices which today are pervasive throughout their organizations.
6. Payment systems at financial institutions are strongly regulated, so even though banking regulations are currently in flux, consumers are best protected from fraud or abuse.
7. Financial institutions have laws, binding agreements and professional standards governing their payment-related activities.
8. Financial institutions can be held responsible, with known personnel and locations, which may contribute to a higher level of trust by consumers and businesses to handle transactions.
9. Financial institutions payment-pricing models depend on repeat business, not one-time payments, IPOs or collateral advertising revenues.
10. Financial institutions already have extensive, secure, bank-to-bank payment networks in place including ACH, credit card, check clearing and more.
There’s a lot at stake for financial institutions in the payments space. From a revenue perspective, the payments business is the most significant single line-of-business in U.S. banking. In fact, according to First Annapolis Consulting, payments in the U.S. represented more than $282 billion in total revenue.
“Now is the time for financial institutions to strongly defend the payments franchise, while the industry has the advantage,” said George Warfel, consulting director, Fiserv. “However, this will require opening up to new ways of doing business and offering new payments methods that people, merchants and corporations will want to use again and again, such as Internet or web payments, mobile phone and iPad payments, and soon, social media payments.”
What do you think?
Those reasons are:
1. Consumers express a strong preference for a financial institution-centric new media payments system, according to Fiserv primary and sponsored research.
2. Customers already have an account relationship with their financial institution.
3. Financial institutions have payment systems that are robust, and secure.
4. Financial institutions have extensive fraud prevention, detection, and resolution operations in place.
5. Financial institutions are held to strict privacy practices which today are pervasive throughout their organizations.
6. Payment systems at financial institutions are strongly regulated, so even though banking regulations are currently in flux, consumers are best protected from fraud or abuse.
7. Financial institutions have laws, binding agreements and professional standards governing their payment-related activities.
8. Financial institutions can be held responsible, with known personnel and locations, which may contribute to a higher level of trust by consumers and businesses to handle transactions.
9. Financial institutions payment-pricing models depend on repeat business, not one-time payments, IPOs or collateral advertising revenues.
10. Financial institutions already have extensive, secure, bank-to-bank payment networks in place including ACH, credit card, check clearing and more.
There’s a lot at stake for financial institutions in the payments space. From a revenue perspective, the payments business is the most significant single line-of-business in U.S. banking. In fact, according to First Annapolis Consulting, payments in the U.S. represented more than $282 billion in total revenue.
“Now is the time for financial institutions to strongly defend the payments franchise, while the industry has the advantage,” said George Warfel, consulting director, Fiserv. “However, this will require opening up to new ways of doing business and offering new payments methods that people, merchants and corporations will want to use again and again, such as Internet or web payments, mobile phone and iPad payments, and soon, social media payments.”
What do you think?
EIPP takes center stage at NACHA Payments
Mark Brousseau
As businesses continue to push for reductions in operations costs and look for ways to support green initiatives, it’s no surprise that more of them are turning to electronic invoice presentment and payment (EIPP) as a solution. EIPP is a hot topic this week at NACHA’s Payments 2011 in Austin, Texas – great timing with Earth Day just a few weeks away.
“The volume of paper required to support traditional invoice and payments processes can be enormous,” said Michael Lane, CEO for EIPP solutions provider Data Impact. “According to NACHA’s PayItGreen Alliance, a firm initiating 260,000 paper payments annually could save significant resources by converting just 20 percent of those payments to electronic. And similar savings can be gained through electronic invoicing as well.”
Data Impact’s electronic invoicing solution allows suppliers to upload invoices and related documents to a secure site, and then customers can access the website and make a payment.
Considering the high amount of paper invoices that are wasted every year, the benefits to electronic invoicing are substantial, Lane said. International Account Payable Professionals (IAPP) and The Association for Work Process Improvement’s (TAWPI) 2011 Account Payable (AP) Automation Study indicates that 90 percent of respondents still receive paper-based invoices in their organization – a situation that Lane says businesses no longer can afford.
With EIPP, companies can solve their excess paper invoice problem while implementing a green solution. Lane said there are several ways e-invoicing support green initiatives:
· Reduced paper processing, printing, and storage
· Decreased duplication of invoices – “You won’t have four copies of the same invoice in four different places,” Lane noted.
· Reduced paper mailing, handling, and postage
“The green factor is obvious with e-invoicing,” Lane said. “But, its real value is streamlining procedures while providing businesses with a major cost reduction in account receivable functions such as invoice delivery, copy invoice and reconciliation.”
What do you think?
As businesses continue to push for reductions in operations costs and look for ways to support green initiatives, it’s no surprise that more of them are turning to electronic invoice presentment and payment (EIPP) as a solution. EIPP is a hot topic this week at NACHA’s Payments 2011 in Austin, Texas – great timing with Earth Day just a few weeks away.
“The volume of paper required to support traditional invoice and payments processes can be enormous,” said Michael Lane, CEO for EIPP solutions provider Data Impact. “According to NACHA’s PayItGreen Alliance, a firm initiating 260,000 paper payments annually could save significant resources by converting just 20 percent of those payments to electronic. And similar savings can be gained through electronic invoicing as well.”
Data Impact’s electronic invoicing solution allows suppliers to upload invoices and related documents to a secure site, and then customers can access the website and make a payment.
Considering the high amount of paper invoices that are wasted every year, the benefits to electronic invoicing are substantial, Lane said. International Account Payable Professionals (IAPP) and The Association for Work Process Improvement’s (TAWPI) 2011 Account Payable (AP) Automation Study indicates that 90 percent of respondents still receive paper-based invoices in their organization – a situation that Lane says businesses no longer can afford.
With EIPP, companies can solve their excess paper invoice problem while implementing a green solution. Lane said there are several ways e-invoicing support green initiatives:
· Reduced paper processing, printing, and storage
· Decreased duplication of invoices – “You won’t have four copies of the same invoice in four different places,” Lane noted.
· Reduced paper mailing, handling, and postage
“The green factor is obvious with e-invoicing,” Lane said. “But, its real value is streamlining procedures while providing businesses with a major cost reduction in account receivable functions such as invoice delivery, copy invoice and reconciliation.”
What do you think?
Getting comfy at NACHA Payments
Mark Brousseau
Visitors to 3i Infotech's booth this week at NACHA Payments in Austin, Texas, have a chance to win a limited edition Snuggie bearing the company's logo. Here, I model the Snuggie with Kathy Hamburger, president, North America, and global head of BPO for 3i Infotech.
Ordinarily, I ask for your opinion at the end of these posts. Don't bother -- I already know.
Visitors to 3i Infotech's booth this week at NACHA Payments in Austin, Texas, have a chance to win a limited edition Snuggie bearing the company's logo. Here, I model the Snuggie with Kathy Hamburger, president, North America, and global head of BPO for 3i Infotech.
Ordinarily, I ask for your opinion at the end of these posts. Don't bother -- I already know.
High-dollar transactions moving to p-cards
By Mark Brousseau
Purchasing card (p-card) volume growth remains strong, Aaron L. Bills, founder and chief operating officer of 3 Delta Systems said this morning during a wide-ranging interview at NACHA Payments in Austin, Texas. “We never saw a slow down as a result of the recession,” Bills said. 3 Delta Systems expects to build on this growth with the release today of a new scalable platform that can handle any payment.
As evidence of the growth of p-cards, Bills points to a milestone that his company reached last month: for time, 3 Delta Systems processed over 1 million p-card transactions, representing more than $1 billion in value, in a single month.
“Part of this growth is the fact the economy is coming back, but the major driver is the increased use of buyer-initiated payments in accounts payables,” Bills said.
For instance, one 3 Delta Systems customer, a healthcare supplies firm, processed $11 million in p-card payments in March, representing just 11 transactions, he said. “And it would have only been two p-card transactions if the company’s payments processor could handle transactions of more than $1 million each,” Bills added.
“This may be an extreme case, but there are versions of this story unfolding all over the place. P-cards are really starting to step up,” Bills said. “P-cards are picking up a greater share of business-to-business transactions at more organizations.”
Bills said he isn’t surprised by the growth of p-cards, given their maturity. “P-cards are established, they are ubiquitous, there is a financial infrastructure in place, and all of the parties understand the rules,” he said. What’s more, merchants are willing to accept p-cards, “as long as they are not getting a 4 percent haircut,” Bills noted.
“From the point of view of the companies using p-cards, they earn a revenue share for every purchase that they make,” said Daniel L. Miner, CTP, general manager, Treasury Services, 3 Delta Systems. “At a time when money is tight for most companies, p-cards provide an opportunity to turn a cost center into a revenue-generating cost center. We’ve seen a lot of companies jump on this concept.”
Miner notes that financial institutions are helping to drive p-card volume growth. “There’s an incentive for issuing banks to get p-cards out there. They are looking for alternatives to consumer cards,” Miner explained. “We’re seeing more banks talking to their corporate customers about moving p-cards to the next level to earn a greater revenue share, and the corporates are responding.”
What do you think?
Purchasing card (p-card) volume growth remains strong, Aaron L. Bills, founder and chief operating officer of 3 Delta Systems said this morning during a wide-ranging interview at NACHA Payments in Austin, Texas. “We never saw a slow down as a result of the recession,” Bills said. 3 Delta Systems expects to build on this growth with the release today of a new scalable platform that can handle any payment.
As evidence of the growth of p-cards, Bills points to a milestone that his company reached last month: for time, 3 Delta Systems processed over 1 million p-card transactions, representing more than $1 billion in value, in a single month.
“Part of this growth is the fact the economy is coming back, but the major driver is the increased use of buyer-initiated payments in accounts payables,” Bills said.
For instance, one 3 Delta Systems customer, a healthcare supplies firm, processed $11 million in p-card payments in March, representing just 11 transactions, he said. “And it would have only been two p-card transactions if the company’s payments processor could handle transactions of more than $1 million each,” Bills added.
“This may be an extreme case, but there are versions of this story unfolding all over the place. P-cards are really starting to step up,” Bills said. “P-cards are picking up a greater share of business-to-business transactions at more organizations.”
Bills said he isn’t surprised by the growth of p-cards, given their maturity. “P-cards are established, they are ubiquitous, there is a financial infrastructure in place, and all of the parties understand the rules,” he said. What’s more, merchants are willing to accept p-cards, “as long as they are not getting a 4 percent haircut,” Bills noted.
“From the point of view of the companies using p-cards, they earn a revenue share for every purchase that they make,” said Daniel L. Miner, CTP, general manager, Treasury Services, 3 Delta Systems. “At a time when money is tight for most companies, p-cards provide an opportunity to turn a cost center into a revenue-generating cost center. We’ve seen a lot of companies jump on this concept.”
Miner notes that financial institutions are helping to drive p-card volume growth. “There’s an incentive for issuing banks to get p-cards out there. They are looking for alternatives to consumer cards,” Miner explained. “We’re seeing more banks talking to their corporate customers about moving p-cards to the next level to earn a greater revenue share, and the corporates are responding.”
What do you think?
Thursday, February 17, 2011
Expect exponential growth for EIPP in 2011
By Michael Lane of Data Impact
In 2010, only 57 percent of business-to-business (B2B) payments were made by check, which is down from 63 percent in 2009 and 74 percent in 2008 (according to the Association for Finance Professionals 2010 Electronic Payment Survey).
This steady decline indicates that businesses are not only looking for, but are finding a more streamlined approach for managing the financial supply chain. As companies become more attuned to the needs of the B2B transaction set, 2011 is expected to be a record breaking year for electronic invoice presentment and payment (EIPP) growth.
Solution providers now recognize that traditional business to consumer models for electronic invoicing and payment cannot accommodate the complex needs of a B2B environment. As a result, the leaders in the EIPP space are providing more robust supporting information at the invoice and payment levels. Documents necessary to support the invoice review and approval process are made available within the platform. Invoice uploads into the customer’s accounts payable platform allow for cost savings and process efficiencies which fosters adoption. More importantly, the lack of remittance details and complexity of reconciliation have been addressed by decoupling the ACH and accounts receivable file information. Auto reconciliation can be achieved with a separate remittance file that is mapped directly into the billing parties accounts receivable platform.
With the past barriers removed, companies of all sizes will more aggressively pursue EIPP platforms in 2011 in order to drive cost savings, accelerate cash and confidently control receivables.
What do you think?
In 2010, only 57 percent of business-to-business (B2B) payments were made by check, which is down from 63 percent in 2009 and 74 percent in 2008 (according to the Association for Finance Professionals 2010 Electronic Payment Survey).
This steady decline indicates that businesses are not only looking for, but are finding a more streamlined approach for managing the financial supply chain. As companies become more attuned to the needs of the B2B transaction set, 2011 is expected to be a record breaking year for electronic invoice presentment and payment (EIPP) growth.
Solution providers now recognize that traditional business to consumer models for electronic invoicing and payment cannot accommodate the complex needs of a B2B environment. As a result, the leaders in the EIPP space are providing more robust supporting information at the invoice and payment levels. Documents necessary to support the invoice review and approval process are made available within the platform. Invoice uploads into the customer’s accounts payable platform allow for cost savings and process efficiencies which fosters adoption. More importantly, the lack of remittance details and complexity of reconciliation have been addressed by decoupling the ACH and accounts receivable file information. Auto reconciliation can be achieved with a separate remittance file that is mapped directly into the billing parties accounts receivable platform.
With the past barriers removed, companies of all sizes will more aggressively pursue EIPP platforms in 2011 in order to drive cost savings, accelerate cash and confidently control receivables.
What do you think?
Friday, February 4, 2011
New NACHA rule will streamline remittance processing
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?
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?
Wednesday, November 3, 2010
Social Nation Building Done Right
Posted by Mark Brousseau
When social media first came on the scene, companies couldn't wait to get on board with the new trend, because they saw it as a way to expand their brands and grow their businesses—and, of course, they had high hopes for return on investment. Now, fast-forward several years. Today, many of these same companies have hired employees devoted to using social technologies but are now faced with answering the all-important question, Now what?
"There's no denying that social networking has worked for some companies and been a flat-out flop for others," asserts Barry Libert, author of the new book Social Nation: How to Harness the Power of Social Media to Attract Customers, Motivate Employees, and Grow Your Business. "Most companies are confused about what social networking really is and about how to successfully leverage it.
"The good news," he continues, "is that these companies don't have to give up their goal of building a successful 'Social Nation,' as I call it. They simply have to change the way they think about it and develop effective strategies. Primarily, they have to learn it's not about technology, as is commonly assumed...it's about community."
Libert knows what he's talking about. After all, he's the chairman and CEO of Mzinga, a company that provides social software to businesses. Quite literally, it's his job to be social media savvy. And he's adamant that before you start building your own Social Nation, you need to have a well-researched game plan. In fact, it's that knowledge, gathered through years of Mzinga's real-world experience, that prompted him to write Social Nation, a sort of social networking best practices manual.
"There's no denying that people know how to use tools like Facebook and Twitter—they just do it to no avail," Libert explains. "What they should be doing is focusing their attention on their customers, partners, and employees. Listening, acknowledging, connecting, and rewarding these people—and implementing what they have to say. I can't stress enough that social networking isn't about accumulating followers for the sake of having them—it's about building a community that brings real value and true ROI to your company."
It almost sounds too simple—but when faced with skepticism, Libert points out that a focus on building community spelled success for his company's clients long before the advent of Facebook. To date, Mzinga has worked with hundreds of companies to manage a total of 2.5 billion interactions a month through online communities.
Ready to rethink your own company's social networking strategy and start seeing some real value? Then throw out what you thought you knew about social media and read on to learn what really works in the land of social networking, as explained in Social Nation:
Build your own community. "Social Nation" is a catchy phrase, sure—but what does it really mean? Well, social is the construct of wanting to belong with another, and nation is being part of something that has purpose. Taking that into account, then, your company's social networking goal should be to bring like-minded people together in order to achieve a common purpose.
"It's all about connecting people who need to be connected, allowing them to become a part of your company experience," says Libert. "I've said it before and I'll say it again: Technology is important, but it will never be a substitute for community. If you want to see growth, you've got to develop a social network that helps people grow, engages their minds, satisfies their unmet needs, and connects them to one another."
Don't broadcast but share. Talking to someone whose conversation is constantly "me-me-me" isn't anyone's idea of a good time...and that principle also holds true in the world of social networking. It doesn't matter how frequently you update your company's status or blog about its achievements if you never deliver information that your followers actually want and need to hear.
"Always remember to create and disseminate quality content that helps people make good decisions, improves businesses, and enhances lives," advises Libert. "They want to read about topics that are actionable and applicable—so we always make sure our clients at Mzinga are providing their constituents with information, tools, and tips on subjects that are of interest to them."
Don't be a guest in someone else's home. Think about the differences between a house and a home. A house is only a structure—but a home is a place where you feel like you belong. That, Libert insists, is the difference between joining random social media sites for the sake of doing it and embracing and building a truly social business.
Realize that might does not make right. Just as your company should avoid disseminating "me-me-me" information via social networking, it should also avoid dominating the conversation. And make no mistake—a symbiotic two-way conversation is exactly what's going on here. A successful Social Nation always lets its community be part of telling the story, from start to finish. Look at it this way: Employees, customers, and partners are essentially volunteering their time and energy to serve as developers, sounding boards, and advertisements for your company. They want to belong—so let them, and listen to them.
"Recently, a company came to me and asked what they needed to do to become the leader in their industry," Libert recounts. "The first thing they had to do, I told them, was to stop trying to 'lead' everything! Instead, make it your goal to be the definitive 'community.' This will draw people in, and it will turn them into raving fans."
Social Nation tells the stories of companies that have embraced this shift to more open, social business models in substantive ways, forging new paths to workplace collaboration, product development, customer relationship management, brand loyalty, innovation, and profitability.
"What businesses should be doing is focusing their attention not on social media itself, but on how they can use it as a channel in every facet of their business to establish the genuine connections that are increasingly becoming the new path to profitability," says Libert. "As a business leader today, your job is to make sure these things happen, and I believe Social Nation can help you get there."
What do you think?
When social media first came on the scene, companies couldn't wait to get on board with the new trend, because they saw it as a way to expand their brands and grow their businesses—and, of course, they had high hopes for return on investment. Now, fast-forward several years. Today, many of these same companies have hired employees devoted to using social technologies but are now faced with answering the all-important question, Now what?
"There's no denying that social networking has worked for some companies and been a flat-out flop for others," asserts Barry Libert, author of the new book Social Nation: How to Harness the Power of Social Media to Attract Customers, Motivate Employees, and Grow Your Business. "Most companies are confused about what social networking really is and about how to successfully leverage it.
"The good news," he continues, "is that these companies don't have to give up their goal of building a successful 'Social Nation,' as I call it. They simply have to change the way they think about it and develop effective strategies. Primarily, they have to learn it's not about technology, as is commonly assumed...it's about community."
Libert knows what he's talking about. After all, he's the chairman and CEO of Mzinga, a company that provides social software to businesses. Quite literally, it's his job to be social media savvy. And he's adamant that before you start building your own Social Nation, you need to have a well-researched game plan. In fact, it's that knowledge, gathered through years of Mzinga's real-world experience, that prompted him to write Social Nation, a sort of social networking best practices manual.
"There's no denying that people know how to use tools like Facebook and Twitter—they just do it to no avail," Libert explains. "What they should be doing is focusing their attention on their customers, partners, and employees. Listening, acknowledging, connecting, and rewarding these people—and implementing what they have to say. I can't stress enough that social networking isn't about accumulating followers for the sake of having them—it's about building a community that brings real value and true ROI to your company."
It almost sounds too simple—but when faced with skepticism, Libert points out that a focus on building community spelled success for his company's clients long before the advent of Facebook. To date, Mzinga has worked with hundreds of companies to manage a total of 2.5 billion interactions a month through online communities.
Ready to rethink your own company's social networking strategy and start seeing some real value? Then throw out what you thought you knew about social media and read on to learn what really works in the land of social networking, as explained in Social Nation:
Build your own community. "Social Nation" is a catchy phrase, sure—but what does it really mean? Well, social is the construct of wanting to belong with another, and nation is being part of something that has purpose. Taking that into account, then, your company's social networking goal should be to bring like-minded people together in order to achieve a common purpose.
"It's all about connecting people who need to be connected, allowing them to become a part of your company experience," says Libert. "I've said it before and I'll say it again: Technology is important, but it will never be a substitute for community. If you want to see growth, you've got to develop a social network that helps people grow, engages their minds, satisfies their unmet needs, and connects them to one another."
Don't broadcast but share. Talking to someone whose conversation is constantly "me-me-me" isn't anyone's idea of a good time...and that principle also holds true in the world of social networking. It doesn't matter how frequently you update your company's status or blog about its achievements if you never deliver information that your followers actually want and need to hear.
"Always remember to create and disseminate quality content that helps people make good decisions, improves businesses, and enhances lives," advises Libert. "They want to read about topics that are actionable and applicable—so we always make sure our clients at Mzinga are providing their constituents with information, tools, and tips on subjects that are of interest to them."
Don't be a guest in someone else's home. Think about the differences between a house and a home. A house is only a structure—but a home is a place where you feel like you belong. That, Libert insists, is the difference between joining random social media sites for the sake of doing it and embracing and building a truly social business.
Realize that might does not make right. Just as your company should avoid disseminating "me-me-me" information via social networking, it should also avoid dominating the conversation. And make no mistake—a symbiotic two-way conversation is exactly what's going on here. A successful Social Nation always lets its community be part of telling the story, from start to finish. Look at it this way: Employees, customers, and partners are essentially volunteering their time and energy to serve as developers, sounding boards, and advertisements for your company. They want to belong—so let them, and listen to them.
"Recently, a company came to me and asked what they needed to do to become the leader in their industry," Libert recounts. "The first thing they had to do, I told them, was to stop trying to 'lead' everything! Instead, make it your goal to be the definitive 'community.' This will draw people in, and it will turn them into raving fans."
Social Nation tells the stories of companies that have embraced this shift to more open, social business models in substantive ways, forging new paths to workplace collaboration, product development, customer relationship management, brand loyalty, innovation, and profitability.
"What businesses should be doing is focusing their attention not on social media itself, but on how they can use it as a channel in every facet of their business to establish the genuine connections that are increasingly becoming the new path to profitability," says Libert. "As a business leader today, your job is to make sure these things happen, and I believe Social Nation can help you get there."
What do you think?
Tuesday, October 12, 2010
The Proper A/P Toolkit
By Bruce Bourdon, CPCP
Vice President, Healthcare Channel Sales Manager
U.S. Bank Corporate Payment Systems
Two key challenges face healthcare accounts payable departments today: Shrinking profit margins due to rising costs, and decreased cash flow due to slower collections and reimbursements.
The cash flow pipeline often plugs up due to an inability of the healthcare provider to extend payment terms with its top suppliers. Operational costs, meantime, have been soaring due to the high cost of printing and mailing paper checks, and often re-issuing and re-mailing checks that get lost. Finally, AP staff spent far too much time researching vendor inquiries about the status of the payment they are owed.
If any industry could stand to benefit from going paperless, it’s healthcare. Yet, a 2010 U.S. Bank/IAPP survey showed that 61 percent of all healthcare payments today are made by paper check. A similar survey, this one by PayStream Advisors in late 2009, found that 68 percent of all invoices are traded by paper, and only about 25 percent of all purchase orders are sent electronically to suppliers.
That’s about to change. The U.S. Bank/IAPP survey that showed such a high rate of paper check payments also predicts a 2/3 reduction in check payments and a three-fold increase in use of purchasing cards over the next three years, based on feedback from respondents.
Some may wonder, what is taking the healthcare industry so long to jump on the technology conversion bandwagon? The answer: it is hampered by many of the same roadblocks being experienced by other industries. Namely, perceived external barriers such as limited willingness or capability of suppliers to handle e-payments, and perceived internal barriers such as the high cost of conversion to e-payments or worries about their own capability to manage the transition.
Such concerns are often overblown. The cost of conversion, for example, is dwarfed by the savings realized over time, according to recent studies. To the extent that it’s measured at all, cost-per-paper-invoice can vary from a dollar to over $15 dollars, says the PayStream Advisors survey. But interestingly enough about half the companies surveyed have no idea what it’s costing them to process each paper invoice.
Electronic processing makes the costs much more transparent and easier to measure, therefore making it easier to spot the cost bottlenecks and act upon them. Aberdeen Group has shown that electronic invoice processing shaves $6 to $7 off the cost or processing each invoice. How? By accelerating the approval cycle, reducing the number of lost and missing invoices, reducing the number of “exceptions” and, ultimately, reducing FTE or allowing redirection of work into more value-added activities.
Annapolis Consulting puts it this way: Automation increases ease of use, ease of use increases adoption, adoption increases on-contract spend, on contract spend enhances visibility and visibility reduces wasteful spend. Just as important, visibility enhances leverage when it comes time to negotiate contracts with suppliers.
Today’s payables toolkit brims with options for the healthcare provider, from Electronic Invoice Presentment and Payment (EIPP) to a wide array of paperless e-payment options including commercial cards, virtual or “ghost” card accounts, wire payments and Automated Clearinghouse (ACH). End-to-end automation is both possible and achievable. It’s easier than ever to establish e-payments as the standard for conducting business with your key suppliers.
Vice President, Healthcare Channel Sales Manager
U.S. Bank Corporate Payment Systems
Two key challenges face healthcare accounts payable departments today: Shrinking profit margins due to rising costs, and decreased cash flow due to slower collections and reimbursements.
The cash flow pipeline often plugs up due to an inability of the healthcare provider to extend payment terms with its top suppliers. Operational costs, meantime, have been soaring due to the high cost of printing and mailing paper checks, and often re-issuing and re-mailing checks that get lost. Finally, AP staff spent far too much time researching vendor inquiries about the status of the payment they are owed.
If any industry could stand to benefit from going paperless, it’s healthcare. Yet, a 2010 U.S. Bank/IAPP survey showed that 61 percent of all healthcare payments today are made by paper check. A similar survey, this one by PayStream Advisors in late 2009, found that 68 percent of all invoices are traded by paper, and only about 25 percent of all purchase orders are sent electronically to suppliers.
That’s about to change. The U.S. Bank/IAPP survey that showed such a high rate of paper check payments also predicts a 2/3 reduction in check payments and a three-fold increase in use of purchasing cards over the next three years, based on feedback from respondents.
Some may wonder, what is taking the healthcare industry so long to jump on the technology conversion bandwagon? The answer: it is hampered by many of the same roadblocks being experienced by other industries. Namely, perceived external barriers such as limited willingness or capability of suppliers to handle e-payments, and perceived internal barriers such as the high cost of conversion to e-payments or worries about their own capability to manage the transition.
Such concerns are often overblown. The cost of conversion, for example, is dwarfed by the savings realized over time, according to recent studies. To the extent that it’s measured at all, cost-per-paper-invoice can vary from a dollar to over $15 dollars, says the PayStream Advisors survey. But interestingly enough about half the companies surveyed have no idea what it’s costing them to process each paper invoice.
Electronic processing makes the costs much more transparent and easier to measure, therefore making it easier to spot the cost bottlenecks and act upon them. Aberdeen Group has shown that electronic invoice processing shaves $6 to $7 off the cost or processing each invoice. How? By accelerating the approval cycle, reducing the number of lost and missing invoices, reducing the number of “exceptions” and, ultimately, reducing FTE or allowing redirection of work into more value-added activities.
Annapolis Consulting puts it this way: Automation increases ease of use, ease of use increases adoption, adoption increases on-contract spend, on contract spend enhances visibility and visibility reduces wasteful spend. Just as important, visibility enhances leverage when it comes time to negotiate contracts with suppliers.
Today’s payables toolkit brims with options for the healthcare provider, from Electronic Invoice Presentment and Payment (EIPP) to a wide array of paperless e-payment options including commercial cards, virtual or “ghost” card accounts, wire payments and Automated Clearinghouse (ACH). End-to-end automation is both possible and achievable. It’s easier than ever to establish e-payments as the standard for conducting business with your key suppliers.
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?
Tuesday, July 13, 2010
Trends in ACH Dispute Management
Trends in ACH Dispute Management
Thursday, August 12 at 1 p.m. eastern
As ACH volumes have grown, so too have the number of ACH transaction disputes that processors must manage. Expensive to handle, these disputes are subject to a complex mix of rules and regulations, and can lead to hefty charge-offs if improperly managed. Just how big a problem are ACH disputes? This webinar will share the results of an exclusive survey of ACH processors on trends in ACH dispute management, including volumes, costs, levels of automation, future plans and more. Attendees will be able to benchmark their operations, gain actionable insights from our panelists, and learn what some processors are doing to automate their ACH dispute processing.
To register, e-mail Dave Nitchman of IAPP-TAWPI at dnitchman@tawpi.org.
Panelists:
Rossana Salaris, principal, Radix Consulting
Amer Khan, senior vice president, product and sales support, eGistics
Moderator:
Mark Brousseau, facilitator, IAPP-TAWPI Payments and Receivables Council
Thursday, August 12 at 1 p.m. eastern
As ACH volumes have grown, so too have the number of ACH transaction disputes that processors must manage. Expensive to handle, these disputes are subject to a complex mix of rules and regulations, and can lead to hefty charge-offs if improperly managed. Just how big a problem are ACH disputes? This webinar will share the results of an exclusive survey of ACH processors on trends in ACH dispute management, including volumes, costs, levels of automation, future plans and more. Attendees will be able to benchmark their operations, gain actionable insights from our panelists, and learn what some processors are doing to automate their ACH dispute processing.
To register, e-mail Dave Nitchman of IAPP-TAWPI at dnitchman@tawpi.org.
Panelists:
Rossana Salaris, principal, Radix Consulting
Amer Khan, senior vice president, product and sales support, eGistics
Moderator:
Mark Brousseau, facilitator, IAPP-TAWPI Payments and Receivables Council
Saturday, July 10, 2010
Same-day ACH settlement highlights need for better dispute management tools
By Ed Pearce (epearce@egisticsinc.com)
Last week's announcement by the Federal Reserve Board of posting rules for a new same-day automated clearing house (ACH) service brought the topic front and center. Everyone from industry analysts and bloggers to trade publications and associations have expounded the pros and cons of same-day settlement. But virtually unmentioned in the all the hubbub is the potential for more ACH disputes as a result of accelerated settlement -- a scenario most banks are ill-prepared to manage.
Starting next month, the Federal Reserve Banks will be offering a same-day settlement service for certain ACH debit payments through its FedACH service. FedACH customers may opt-in to the service by completing a participation agreement. The service will be limited to transactions arising from consumer checks converted to ACH and consumer debit transfers initiated over the Internet and phone. Same-day forward debit transfers will post to a financial institution's Federal Reserve account at 5 p.m. eastern time, while same-day return debit transfers will post at 5:30 p.m.
As a result of the faster settlement, banks undoubtedly will see more consumers coming into their branches complaining of unauthorized transactions. The limitations of traditional in-house ACH systems and the strict time constraints and complex processing requirements imposed by NACHA rules and Regulation E already have led to sharp increases in operations expenses and higher charge-offs associated with ACH disputes. A new influx of consumer disputes will require financial institutions to implement a more centralized, more streamlined approach to dispute management.
Several features will be critical:
• Real-time distributed data access to any authorized user, anywhere
• Intuitive search capabilities
• The ability to annotate comments to disputed transactions
• The ability to export data
• Expanded search capabilities
• Filtering capabilities to block and restrict access to certain transactions
• Unlimited data storage
It may be some time before same-day ACH settlement achieves critical mass. But the next generation of consumers will demand it. This means that banks must begin adapting their ACH infrastructure today or risk even higher operations costs, as well as falling behind the competition. And this includes deploying sophisticated solutions to manage the inevitable spike in ACH disputes.
Last week's announcement by the Federal Reserve Board of posting rules for a new same-day automated clearing house (ACH) service brought the topic front and center. Everyone from industry analysts and bloggers to trade publications and associations have expounded the pros and cons of same-day settlement. But virtually unmentioned in the all the hubbub is the potential for more ACH disputes as a result of accelerated settlement -- a scenario most banks are ill-prepared to manage.
Starting next month, the Federal Reserve Banks will be offering a same-day settlement service for certain ACH debit payments through its FedACH service. FedACH customers may opt-in to the service by completing a participation agreement. The service will be limited to transactions arising from consumer checks converted to ACH and consumer debit transfers initiated over the Internet and phone. Same-day forward debit transfers will post to a financial institution's Federal Reserve account at 5 p.m. eastern time, while same-day return debit transfers will post at 5:30 p.m.
As a result of the faster settlement, banks undoubtedly will see more consumers coming into their branches complaining of unauthorized transactions. The limitations of traditional in-house ACH systems and the strict time constraints and complex processing requirements imposed by NACHA rules and Regulation E already have led to sharp increases in operations expenses and higher charge-offs associated with ACH disputes. A new influx of consumer disputes will require financial institutions to implement a more centralized, more streamlined approach to dispute management.
Several features will be critical:
• Real-time distributed data access to any authorized user, anywhere
• Intuitive search capabilities
• The ability to annotate comments to disputed transactions
• The ability to export data
• Expanded search capabilities
• Filtering capabilities to block and restrict access to certain transactions
• Unlimited data storage
It may be some time before same-day ACH settlement achieves critical mass. But the next generation of consumers will demand it. This means that banks must begin adapting their ACH infrastructure today or risk even higher operations costs, as well as falling behind the competition. And this includes deploying sophisticated solutions to manage the inevitable spike in ACH disputes.
Tuesday, June 29, 2010
Taking the Sting Out of ACH Dispute Management
Posted by Mark Brousseau
The financial services landscape is undergoing radical change, with transaction processing rapidly migrating from paper-based to electronic payments. According to the Federal Reserve's 2007 Payments Study, electronic payments now exceed two-thirds of all non-cash payments -- a big change from a decade ago when paper checks were still king. Automated Clearing House (ACH) transactions have been a key to the growth of electronic payments. The number of ACH transactions in 2008 topped 18.2 billion, representing an increase of 1.2 billion over 2007, NACHA reports.
But this ACH growth also has created new back-office challenges, particularly in the area of transaction dispute management. The limitations of traditional in-house ACH systems and the strict time constraints and complex processing requirements imposed by NACHA rules and Regulation E have led to increases in operations expenses and potentially higher charge-offs associated with ACH disputes. And changes in the interpretation of Regulation E -- spelled out by Federal Reserve Bank staff and an OCC Advisory Letter -- may further complicate matters.
The Situation
One of the nation's largest bank ACH processors has taken proactive measures to better manage its ACH disputes. The bank's ACH operations perform a wide range of functions, including daily inbound and outbound transaction management, implementation and maintenance, customer service, compliance, and exception support.
Over the past several years, the bank has achieved significant growth in its ACH transaction volume. Along with this growth in overall ACH transactions, the bank has seen its ACH disputes increase 25 percent during the same period.
To be sure, the overall growth in ACH volumes is a factor in the increasing number of disputes. But customers also are better educated about ACH, and have higher expectations. Regardless of the cause, ACH disputes are costly to manage (with different attributes for each dispute and conflicting Regulation E and NACHA timelines), and present the risk of non-compliance and charge-off losses.
The Solution
Recognizing these challenges, the bank began an evaluation of solutions to better manage its ACH dispute process. At that time, the bank used an ACH processing product that kept transactions online for a short period of time, after which the information was archived to an offline report warehouse. The offline warehouse required the bank to "restore" reports and customer statements, a time-consuming and costly process that prevented the bank from providing quick responses to customer inquiries.
The bank evaluated three options for enhancing its ACH capabilities: further extending its legacy ACH solution's capabilities, developing an in-house solution, or leveraging a hosted solution. Scarce in-house IT resources precluded the bank from extending its legacy solution's warehouse capabilities. Similarly, the bank ruled out developing a custom solution because of competing demands for its limited IT resources and the long time-to-market required to develop an in-house solution.
Ultimately, the bank selected a hosted ACH solution from eGistics based on its compelling business case and its track record in the bank's lockbox operation. Using eGistics, the bank was able to implement an ACH Dispute Management solution faster, more effectively, and more economically than it could using internal resources or its current ACH vendor.
Within a few weeks of selection eGistics delivered its ACH solution, which supports a range of ACH functions including dispute research, customer service inquiries (notably questions about transaction details and debit authorization), and compliance reporting for potential rules violations. eGistics’ ACH Dispute Management solution provides a secure, easy to use Web interface that enables users to quickly search ACH transactions using a variety of configurable search criteria.
The Benefits
Most important to the bank, the eGistics hosted framework streamlined the research, management and reporting of ACH transaction disputes. Here's how it works: The bank receives ACH transmission files from the ACH network. A copy of these files is forwarded to the eGistics ACH solution. Operators log in to the eGistics platform and are able to search for transactions in real-time. Additionally, transactions can be marked as disputed, and then managed through the resolution process. Because there is a single view of the transactions, all operators can see the status of a dispute or inquiry. Finally, each disputed transaction is given a disposition status such as: credited, denied, or returned.
Streamlined research and management of ACH disputes were part of an overall business case for the bank that included long-term storage, improved customer service, attractive total cost of ownership, minimal internal resources, minimal capital expense, and rapid deployment. And eGistics provided the bank with the peace of mind that its solution complied with industry requirements, was reliable and scalable, ensured the privacy of critical data, and maintained complete access management through transaction tracking, auditing and reporting.
The eGistics hosted solution enhances the bank's dispute management process by providing: real-time distributed data access to any authorized user (even across branches or operations centers); intuitive search capabilities; the ability to annotate comments to disputed transactions; and the ability to export data (such as for batch extracts). The eGistics solution also has provided the bank with expanded search capabilities, including the ability to search on any alpha-numeric field (e.g. date, amount, customer, etc.) or using multiple "operators" (e.g. "contains," "greater than," "less than," "equal to," etc.). eGistics' ability to search data based on configurable parameters allows the bank to spot trends and react more effectively to unauthorized ACH debits. And the filtering capabilities provided by the eGistics research tool will enable the bank to block and restrict access to certain transactions, when required. What's more, the bank can store data in the eGistics solution for an unlimited period of time.
The functionality delivered by the eGistics solution supports a range of ACH functions at the bank, including: dispute research; customer service inquiries (notably, questions about transaction details and debit authorization); fraud mitigation; and compliance (reporting for potential rules violations).
The Bottom Line
At a time when rising ACH dispute volumes are impacting the back-office operations at banks, one of the largest ACH banks in the United States has achieved significant benefits by moving to a hosted ACH dispute management solution. These benefits include better, faster customer service, more accurate and timelier dispute status and tracking, streamlined ACH operations with lower costs, and reduced losses from charge-offs.
The financial services landscape is undergoing radical change, with transaction processing rapidly migrating from paper-based to electronic payments. According to the Federal Reserve's 2007 Payments Study, electronic payments now exceed two-thirds of all non-cash payments -- a big change from a decade ago when paper checks were still king. Automated Clearing House (ACH) transactions have been a key to the growth of electronic payments. The number of ACH transactions in 2008 topped 18.2 billion, representing an increase of 1.2 billion over 2007, NACHA reports.
But this ACH growth also has created new back-office challenges, particularly in the area of transaction dispute management. The limitations of traditional in-house ACH systems and the strict time constraints and complex processing requirements imposed by NACHA rules and Regulation E have led to increases in operations expenses and potentially higher charge-offs associated with ACH disputes. And changes in the interpretation of Regulation E -- spelled out by Federal Reserve Bank staff and an OCC Advisory Letter -- may further complicate matters.
The Situation
One of the nation's largest bank ACH processors has taken proactive measures to better manage its ACH disputes. The bank's ACH operations perform a wide range of functions, including daily inbound and outbound transaction management, implementation and maintenance, customer service, compliance, and exception support.
Over the past several years, the bank has achieved significant growth in its ACH transaction volume. Along with this growth in overall ACH transactions, the bank has seen its ACH disputes increase 25 percent during the same period.
To be sure, the overall growth in ACH volumes is a factor in the increasing number of disputes. But customers also are better educated about ACH, and have higher expectations. Regardless of the cause, ACH disputes are costly to manage (with different attributes for each dispute and conflicting Regulation E and NACHA timelines), and present the risk of non-compliance and charge-off losses.
The Solution
Recognizing these challenges, the bank began an evaluation of solutions to better manage its ACH dispute process. At that time, the bank used an ACH processing product that kept transactions online for a short period of time, after which the information was archived to an offline report warehouse. The offline warehouse required the bank to "restore" reports and customer statements, a time-consuming and costly process that prevented the bank from providing quick responses to customer inquiries.
The bank evaluated three options for enhancing its ACH capabilities: further extending its legacy ACH solution's capabilities, developing an in-house solution, or leveraging a hosted solution. Scarce in-house IT resources precluded the bank from extending its legacy solution's warehouse capabilities. Similarly, the bank ruled out developing a custom solution because of competing demands for its limited IT resources and the long time-to-market required to develop an in-house solution.
Ultimately, the bank selected a hosted ACH solution from eGistics based on its compelling business case and its track record in the bank's lockbox operation. Using eGistics, the bank was able to implement an ACH Dispute Management solution faster, more effectively, and more economically than it could using internal resources or its current ACH vendor.
Within a few weeks of selection eGistics delivered its ACH solution, which supports a range of ACH functions including dispute research, customer service inquiries (notably questions about transaction details and debit authorization), and compliance reporting for potential rules violations. eGistics’ ACH Dispute Management solution provides a secure, easy to use Web interface that enables users to quickly search ACH transactions using a variety of configurable search criteria.
The Benefits
Most important to the bank, the eGistics hosted framework streamlined the research, management and reporting of ACH transaction disputes. Here's how it works: The bank receives ACH transmission files from the ACH network. A copy of these files is forwarded to the eGistics ACH solution. Operators log in to the eGistics platform and are able to search for transactions in real-time. Additionally, transactions can be marked as disputed, and then managed through the resolution process. Because there is a single view of the transactions, all operators can see the status of a dispute or inquiry. Finally, each disputed transaction is given a disposition status such as: credited, denied, or returned.
Streamlined research and management of ACH disputes were part of an overall business case for the bank that included long-term storage, improved customer service, attractive total cost of ownership, minimal internal resources, minimal capital expense, and rapid deployment. And eGistics provided the bank with the peace of mind that its solution complied with industry requirements, was reliable and scalable, ensured the privacy of critical data, and maintained complete access management through transaction tracking, auditing and reporting.
The eGistics hosted solution enhances the bank's dispute management process by providing: real-time distributed data access to any authorized user (even across branches or operations centers); intuitive search capabilities; the ability to annotate comments to disputed transactions; and the ability to export data (such as for batch extracts). The eGistics solution also has provided the bank with expanded search capabilities, including the ability to search on any alpha-numeric field (e.g. date, amount, customer, etc.) or using multiple "operators" (e.g. "contains," "greater than," "less than," "equal to," etc.). eGistics' ability to search data based on configurable parameters allows the bank to spot trends and react more effectively to unauthorized ACH debits. And the filtering capabilities provided by the eGistics research tool will enable the bank to block and restrict access to certain transactions, when required. What's more, the bank can store data in the eGistics solution for an unlimited period of time.
The functionality delivered by the eGistics solution supports a range of ACH functions at the bank, including: dispute research; customer service inquiries (notably, questions about transaction details and debit authorization); fraud mitigation; and compliance (reporting for potential rules violations).
The Bottom Line
At a time when rising ACH dispute volumes are impacting the back-office operations at banks, one of the largest ACH banks in the United States has achieved significant benefits by moving to a hosted ACH dispute management solution. These benefits include better, faster customer service, more accurate and timelier dispute status and tracking, streamlined ACH operations with lower costs, and reduced losses from charge-offs.
Wednesday, May 19, 2010
NACHA stats reveal electronic migration
Posted by Mark Brousseau
If you’re looking for more proof that consumers continue to move away from paper-based check payments and towards more convenient and “greener” electronic transactions, look no further than NACHA’s 2009 statistics for the Automatic Clearing House (ACH) Network, says Leilani Doyle (ldoyle@usdataworks.com), product manager at US Dataworks, Inc., a leading provider of enterprise payments solutions.
Doyle notes that while overall ACH payment volume increased by more than 475 million transactions in 2009 – a 2.6 percent increase compared to 2008 – Accounts Receivable Check (ARC) Conversion volume decreased by about 10 percent, according to NACHA’s statistics. The drop in ARC volume was offset by a spike in Internet-initiated (WEB) transactions of 9.7 percent in 2009, Doyle points out. Similarly, US Dataworks, the long-time market share leader in ARC volumes, saw its WEB volumes soar 700 percent in 2009 compared to the previous year, Doyle said.
“This trend is not surprising,” Doyle says. “It reflects the shift in consumer preferences from writing checks to making payments over the Internet.”
Doyle adds that she also wasn’t surprised by the uptick in Back Office Conversion (BOC) volumes indicated by NACHA’s annual statistics. “BOC will continue to grow as businesses that still take checks over the counter look for ways to reduce their costs to process checks,” Doyle explains.
What do you think?
If you’re looking for more proof that consumers continue to move away from paper-based check payments and towards more convenient and “greener” electronic transactions, look no further than NACHA’s 2009 statistics for the Automatic Clearing House (ACH) Network, says Leilani Doyle (ldoyle@usdataworks.com), product manager at US Dataworks, Inc., a leading provider of enterprise payments solutions.
Doyle notes that while overall ACH payment volume increased by more than 475 million transactions in 2009 – a 2.6 percent increase compared to 2008 – Accounts Receivable Check (ARC) Conversion volume decreased by about 10 percent, according to NACHA’s statistics. The drop in ARC volume was offset by a spike in Internet-initiated (WEB) transactions of 9.7 percent in 2009, Doyle points out. Similarly, US Dataworks, the long-time market share leader in ARC volumes, saw its WEB volumes soar 700 percent in 2009 compared to the previous year, Doyle said.
“This trend is not surprising,” Doyle says. “It reflects the shift in consumer preferences from writing checks to making payments over the Internet.”
Doyle adds that she also wasn’t surprised by the uptick in Back Office Conversion (BOC) volumes indicated by NACHA’s annual statistics. “BOC will continue to grow as businesses that still take checks over the counter look for ways to reduce their costs to process checks,” Doyle explains.
What do you think?
Thursday, April 29, 2010
WEB payments up, unauthorized transactions down
Posted by Mark Brousseau
Companies experienced cost savings in 2009 as people switched to lower cost ACH bill payments and companies spent less time managing unauthorized debits.
WEB bill payments (ACH payments initiated at the billing company's website) grew 9.7% in 2009 vs. 2008 and unauthorized WEB debits decreased 13% down to 0.04%.
One utility company in Florida continued their strong growth in 2009. However, this utility company has not always grown their electronic payments at impressive rates. Looking back to 2004, the utility's electronic payment adoption rate was well below industry average. The utility company substantially increased their electronic payment options and integrated the entire payment process resulting in a tripling of their electronic payment adoption rate.
Source: NACHA, April 7, 2010
Companies experienced cost savings in 2009 as people switched to lower cost ACH bill payments and companies spent less time managing unauthorized debits.
WEB bill payments (ACH payments initiated at the billing company's website) grew 9.7% in 2009 vs. 2008 and unauthorized WEB debits decreased 13% down to 0.04%.
One utility company in Florida continued their strong growth in 2009. However, this utility company has not always grown their electronic payments at impressive rates. Looking back to 2004, the utility's electronic payment adoption rate was well below industry average. The utility company substantially increased their electronic payment options and integrated the entire payment process resulting in a tripling of their electronic payment adoption rate.
Source: NACHA, April 7, 2010
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