ePayments - Automation is the Key



The rise of new, customizable business to-business payment networks could help speed the sluggish migration of corporate payments from legacy paper-based checks and invoices to more-efficient electronic payment platforms. A new crop of B2B payment hubs developed by batiks and credit card networks over the last year enhances corporations' abilities to electronically route B2B payments through automated clearinghouse systems, electronic funds transfer networks, and wire or commercial card channels, particularly for procurement and supply purchases.

These new Internet-based payment networks enable faster settlement of B2B payments compared with checks, providing opportunities to earn early-payment discounts with many suppliers. The networks also provide more-detailed invoice and remittance data. Banks and card networks hope to gain a greater share of the overall payments they handle through their B2B networks, say analysts.

Another important lure of the new B2B payment networks is their usefulness to corporations making international payments, says Anand Ramakrisbnan, senior vice president in the Rosemont, III., office of Paris-based consulting firm Capgemini. American Express Co. last year finalized the acquisition of Harbor get more info Payments Inc. to expand its electronic payments services; JPMorgan Chase & Co. last May acquired the B2B network developed by Xign Corp.; and MasterCard Worldwide unveiled its MasterCard Payments Gateway hub last October.

An indirect effect of the growth of new B2B networks likely is a reduction in check payments as more corporations shift to electronic platforms. Seventy-four percent of U.S. B2B payments were conducted by check in 2007, down from 81% that were in 2004, according to the Association for Einancial click here Professionals. "Each (B2B network system) is a little different, but most of them are built on an electronic invoicing and presentment platform that relies on scanned images of invoices that can easily be linked to electronic payments in order to track…

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