Nacha's Council for Electronic Billing and Payment has released a white paper analysing three models for business-to-business electronic invoice presentment and payment (EIPP).
The Council was established by US-based EFT operator Nacha eight years ago to conduct research into alternative electronic payment methods.
"The purpose of the white paper is to provide an objective, educational tool on Internet-based electronic invoice presentment in business-to-business transactions," says Connie Howard, chair of the Council's B2B Task Force and director of sales strategy development with TriSense Software. "It is intended to help businesses understand the different approaches emerging in the market today."
The white paper, entitled Business-to-Business EIPP: Presentment Models and Payment Options, outlines the three current EIPP models - seller direct, buyer direct, and consolidator. For each model, the paper presents an overview, a process flow, a usage analysis, model differentiators, and implementation considerations.
EIPP is the business-to-business version of electronic bill presentment and payment (EBPP) by which consumers pay bills via the Internet. While both B2C and B2B transactions have similar processes, the B2B environment is typically more complex, involving more participants and creating longer, more intricate value chains.
According to the paper, the motivations for businesses to migrate to EIPP include shortened transaction cycles, accelerated revenue cycles, improved cash flow management, increased marketing opportunities, improved productivity, reduced direct costs (eg postage and printing), and enhanced customer service.
Nacha says it will release a follow-up paper in the second quarter which will examine alternative payment options, such as Automated Clearing House (ACH), credit cards, alternative payment networks (eg Visa ePay, MasterCard RPPS), wire transfers and cheques.