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Tips for Selecting an Integrated Payments Platform

In my recent blog article, “Why Outsource B2B ePayment Adoption?”, I conveyed the results from a recent SunGard study around B2B ePayments and why more and more organizations are opting to outsource the payments process.  The study included 171 participants spanning a broad range of industry and revenue classifications, with 48% of the respondents from companies with more than $1 billion in revenue.  When asked to identify the top requirement for a payments solution or solution provider, study participants pointed first to a requirement for an integrated platform.

Rather than looking for a specific payment type such as virtual card, companies first want a platform that can handle the full spectrum of payment methods from check to ACH, EFT (electronic funds transfer), wire, virtual card, and SWIFT. They are coupling this approach with the introduction of a formal vendor enrollment program: a highly targeted campaign to help educate and convert vendors from check to electronic payment. A solution provider that offers both of these options presents the most effective short and longer term solution to corporations.

An integrated platform is typically a Web-based portal that provides authorized users with a secure connection to manage their payment processing jobs from start to finish. Using an intuitive interface, payers transfer payment files to be executed in various formats (including spreadsheets). Within the portal, they can review records prior to payment, release jobs, check job status, choose delivery options and view reports on all completed jobs.

A typical integrated platform splits payables data files, differentiating disbursements to be paid by ACH, EFT, wire, virtual card, or SWIFT from those to be paid by check. Electronic payments are executed, checks are printed and mailed, and electronic confirmations are available to ensure job completion. In processing the payments, the system assigns each transaction a corresponding trace number - essential for reconciling payments together as a single payment run.

An integrated platform is such an attractive option because it can facilitate the migration of vendors away from checks to a virtual card program. Virtual cards offer increased security over traditional payment methods with the added benefit of rebates, helping to turn Accounts Payable from a standard cost center to a newfound revenue center. Virtual card payments drive rebate revenue by taking some of the interchange fees received by the card issuer and sharing with the payer in the form of a rebate check. While the economic model speaks for itself, the challenge remains in the logistics and operations.

Here are a few more tips on what a solution provider should be able to provide in an integrated payments platform:

  • Rebates - Enable companies to earn monthly rebates.
  • Bank independence - Allow companies to leverage their existing bank relationships.
  • Secure card number generation and electronic delivery - Generate one-time/invoice specific use and unique credit card numbers that are automatically assigned and delivered to your vendors electronically.
  • Delivery of remittance details - Electronically transmit remittance advices to accompany all card payments.
  • Simplified reconciliation - Invoice details are available for each card payment to simplify the reconciliation process.
  • Fast implementation - Works with existing accounting systems and current payment output files
  • Rapid vendor enrollment - Automated, online enrollment process, making it fast and easy for vendors to enroll and immediately receive electronic payments and remittance information.
  • Transaction archive - Provide a secure, online archive of payment transactions, allowing both you and your vendors to access payment history quickly to resolve disputes.

Do you have any additional tips on selecting an integrated payments platform? I’d like to hear from you.


Comments: (1)

A Finextra member
A Finextra member 27 September, 2012, 15:07Be the first to give this comment the thumbs up 0 likes

Great list! One additional tip that I would add:

Fraud Prevention Security - Ensure the platform has multi-factor authentication (MFA) and not just login ID and password. One-time passcodes are ideal. If card payment data will be stored, it is critical that the provider be PCI-compliant.

The largest data security breaches in history occurred in 2011 (think Sony Playstation, RSA, Michaels Stores, etc) and 2012 is on track to match or surpass that record.

If a provider does not know what MFA or PCI-Compliance is, that should be a red flag.

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