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The Aite Group recently conducted a survey that analyzed remittance practices, benchmarks and perspectives of US and International corporations. The findings confirmed some commonly held views but also provided some surprising insights into practitioner’s
The study was based on 240 U.S.-based companies, 280 companies based outside of the U.S., and a total of 25 financial institutions and other industry participants (e.g., third-party processors, vendors, and industry utilities)
Some of the less surprising findings were:
Some of the more surprising findings were:
The shift from paper to electronic delivery of both payments and associated remittance has been inexorable but slow. The results of the survey show clearly that the most popular and prevalent form of remittance delivery has the following characteristics:
it’s ubiquitous, it’s familiar, it’s easy to use, it’s reliable, it’s based on a worldwide standard, and it is perceived as free. As the financial services industry, software vendors and standards groups continue to support efforts to enable straight through
processing, it will be important to keep these characteristics in mind.
How do these findings align with your experience? I’d love to hear from you.
Yes, companies out there continue to struggle with the disjointed payment / remittance process. Where they exist, email remittances (now printed direct from the fax machine that used to receive them over a phone line) are the norm - they come out of SAP
/ Other ERP systems as pdfs and arrive typically one or two days before the payment at the target email address.
Oh for the day when the payment itself carries the remittance and we can really start STP. Until then, we will remain in the dark and grateful that we have at least received the cash from our customer - adding it joyfully to the growing pile of unallocated
receipts in the sales ledger.
Maybe I'm missing something, but I'm unable to reconcile the first point in the second list with the first point in the first list. If 60% of B2B payers accept direct debits, how come 70% of payments are made by checks?
For many suppliers - me included! - collecting the payment in time is a major task in itself. Most incoming payments don't contain any remittance information, let alone in an industry-standard format. The second point in the second list shouldn't be a major
surprise for many such suppliers.
Until e-payments permit detailed narration required for reconcilation - rather than just a cryptic message that can be accommodated in the limited lengths of their reference field - we can expect the usage of checks to continue to dominate B2B payments.
I missed this article unntil now but the day is coming when a web reference carried within the limited lengths of e-payment reference fields can be associated with any amount of remittance information held outside payment infrstructures.
The short URL is automated and generated as part of the payment file.
Any amount of payment remittance detail, required for reconciliation, can be downloaded as a PDF or via web service to enable straight through processing.
Its almost free but ticks all other remittance delivery charateristics.
19 Mar 2009
This post is from a series of posts in the group:
Payments systems visions, strategies, trends, pilots, forecasting, and planning for the short-, medium-, and far-term.