VECTORsgi, a Metavante company and leading provider of financial transaction applications, announced at the NACHA PAYMENTS 2005 Conference that it worked with the NACHA X12 Finance subcommittee to conduct a successful proof of concept for Extensible Markup Language (XML) records to be embedded in NACHA's corporate trade exchange (CTX) format.
The goal of the project is to facilitate straight-through processing for business-to-business electronic payments.
The proof of concept began with a payment origination file from an accounts payable system. M&I Marshall & Ilsley Bank used VECTORsgi's VECTOR E-Payments Solution to convert payment origination files to a CTX design embedded with XML formatting. The files were then cleared through the ACH clearing system to JPMorgan Chase, which passed the payment with the accompanying XML remittance detail to the State of Louisiana Department of Public Safety, the receiving corporation.
This formatting is intended to increase the acceptance of electronic payments and speed the posting of transactions to accounts receivable, decrease the number of cases of disputed items, and potentially decrease the days of sales outstanding. It will simplify a bank's business processes and enable them to provide competitive corporate offerings and enhanced efficiencies.
"Successfully incorporating XML formatting into electronic payments positions financial institutions and businesses alike to multiply the benefits derived from electronic payments," said Sydney Smith Hicks, president of VECTORsgi. "Presently, only 15 percent of all remittances delivered are suitable for automated reconciliation. The NACHA X12 Finance subcommittee's efforts will improve the efficiency and popularity of electronic payments as we approach a fully automated solution."
VECTORsgi also played an instrumental role in developing an XML format to transfer addenda records with electronic payments, providing industry-specific details and further enhancing reconciliation. The format is currently under consideration before the NACHA board of directors for approval for general use.