The Electronic Payments Network (EPN), the ACH business of The Clearing House Payments Company, today announced that ACHDIRECT, a leading provider of cash management services, will adopt the EPN STP 820 remittance standard.
EPN STP 820 was developed by EPN, the ACH payments business of The Clearing House Payments Company L.L.C., working with industry groups, software providers, banks and businesses to facilitate straight-through-processing for B-to-B electronic payments. The standard enables corporate trading partners to transmit detailed remittance information within their electronic ACH payments and allows recipients to automatically post the transactions to their accounts receivables applications. The EPN STP 820 standard is supported by NACHA and the Association of Financial Professionals (AFP).
The adoption of the EPN STP 820 by ACHDIRECT will strengthen the company's flagship technology, Payments Gateway, a high-capacity modular payment processing environment designed for maximum flexibility and availability. The third-generation design in Payments Gateway enables customers to process credit card, debit card, and electronic check transactions in either real time or batch mode.
"By incorporating the EPN STP 820 remittance standard into our processing environment and client tools, ACH Direct will be able to provide our clients with a completely automated method of distributing remittance information to their trading partners along with the actual payment itself," said ACHDIRECT CEO Jeff Thorness. "ACH Direct is very excited about extending these capabilities to our clients because it will vastly simplify the previously complex process of communicating and linking remittance data to the corresponding deposit."
The EPN STP 820 standard addresses one of the key obstacles in business-to-business payments: the lack of a single standard format for remittance information. The AFP Payments Advisory Group, which represents a broad cross-section of corporate treasury and finance professionals, has said the EPN STP 820 "appears to address key barriers to the efficient delivery of remittance information with electronic payments, if properly implemented."
"ACHDIRECT's adoption of the EPN STP 820 standard will help more businesses initiate electronic payments and move away from checks," said Rossana Salaris, Senior Vice President of The Clearing House Payments Company, responsible for EPN. "As support for the standard continues to grow, every industry will benefit from the cost savings and operational improvements that result from widespread adoption of B-to-B electronic payments."
A Federal Reserve study showed that of the 3.9 billion business-to-business remittance payments each year, only 14% are executed electronically. Of these electronic payments only 32% could be posted automatically. This standard will dramatically increase the automatic reconciliation of electronic payments.