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Electronic Payments – Safe and Easy for Government Entities of all SizesThe Final Frontier
Opportunities, Challenges and Solutions UPIC & STP 820
Sharon JablonBusiness Development ManagerAugust 18, 2009
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TCH offers a full line of payment services that facilitate the migration of paper to electronic payments
EPN ACH Processing &
Association services
CHIPS Wire: Large value, real time,
final payments
SVPCO - Check Services• Regional paper check
exchanges, transportation, settlement and adjustments
TCH provides private-sector, global payment systems and infrastructure to clear and settle 50 million payments for $2.2 trillion each day
SVPCO - Electronic Clearing Services
• Image Exchange Gateway & Settlement
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Market Needs & Trends Today’s Solutions
– UPIC– STP 820
Q&A
Agenda
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Market Needs & Trends
• Government Entities and Larger Corporations have been requesting electronic payments and would like to pay electronically
• Their smaller trading partners had no tools to comply
5 Large Receiver/Vendor
Remittance Processing Associated With Check Processing
SMEs
Has to be keyed into receivables by receiver or Converted at the lockbox
…..More accurate when keyed by sender from source
….......Much more accurate when comes directly from AP
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Customer Service calls to discuss payments take time and cost both payors and receivers money
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Why $ and Data Together?
Receivers do not want to:Be directed to web sites to find the payment related infoReceive and review emails to find explanation about paymentsReceive Faxes with info pertaining to a payment
All of these cause inconsistencies in reconcilement!
This wastes time and $
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What Stands in the way of Migrating To Electronic Payments?
Reluctance to divulge sensitive banking information Preference for the Credit “push” versus Debit “pull” model
Many AP/AR packages cannot create/receive electronic payments
No integration with cash management and accounting systems
Conflicting, multiple message formats A minimum amount of standard information is needed
Float
STP 820
UPIC
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Why Haven’t Electronic Payments between Trading Partners Grown More?
We have had….– Software tools
– Trading partner incentives
But we had challenges that impeded mass adoption…– Limited software products
– Windows installations
– One-on-one training
– Lag in development of browser based tools
And we haven’t had….– Easy to use formats and tools that were readily available
Previous attempts were not elegant and did not gain adoption
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Business-to-Business PaymentsA Solution Exists!
EPN Research
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Universal Payment Identification Code (UPIC®)
Masks routing and account numbers Credit payments only, blocks debits Use with any cash management or
accounts payable system Universal routing number Issued and maintained by banks
Portable
UPICs help prevent fraud
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How UPICs Work
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Corporate Sales Sold to: Hudson Computers Supply
ATTN: G. Nederman 45 E Main St. Suite 1B Warren, NY 32132-6754
Ship to: Hudson Computer Supply ATTN: G. Nederman 45 E Main St. Suite 1B Warren, NY 32132-6754
Qty Size Color Item # Description Unit
Price Disc Total
4 34’ N/A 7523411 T1 Cable $105.00 $420.00 2 N/A N/A 7565433 Network Router $540.00 $1080.00 1 Sm Blue 6543733 19’ LCD Display $426.00 $426.00 1 Md Red 6242444 Mousepad $15.00 $15.00 Questions? Call customer service @ 243-555-3232
If you are paying by check please return this portion with your payment Remit checks to: Sold to: ACME Products Inc. Hudson Computers Supply 1209 Cedar Ln. ATTN: G. Nederman Holyoke, MD 34212-4565 45 E Main St. Suite 1B
Warren, NY 32132-6754
We encourage you to send payments electronically via ACH credit or EDI Payments to: ACME Products Inc. ABA # - 021052053 UPIC/Acct # - 3783000152 Reference # - RJ8049 Invoice # - 0147586342
Invoice #
Order # Page #
Date 0147586
3458003 1 of 1
12/06/01
Customer # Amount 804978-75 $2096.28
Tax
Sub Total
$155.28
$1941.00
Shipping $0.00
TOTAL $2096.28
Invoice # 0147586
Customer #
Amount
804978-75
$2096.28
Due Date 01/06/02 * To ensure proper credit of electronic payments both the reference # and invoice #(s) are required.
George, Thank you for your order!!
We encourage you to send payments electronically via ACH credit or EDI Payments to:
ABC Treasurer’s Office ABA # - 021052053 UPIC/Acct # - 3783000152 Reference # - RJ8049 Invoice # - 0147586342
Requesting Electronic Payments
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Online Cash Manager
UPIC / Account Number
UPIC / Account Number
Universal Routing Number
Universal Routing Number
UPIC / AccountNumber
UPIC / AccountNumber
Universal Routing Number
Universal Routing Number
A/P Vendor Setup Screen
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Receiving industry wide adoption around the United States
Telecommunications
Agriculture
Real Estate Financial ServicesPaper Supplier
Fund Raising
Employment
Banking Association
BenefitsAdministration
Hotel Industry
Education
Medical Technologies
Computer Manufacturing
Government Agencies Wholesale Distributors
Universal Payment Identification Code
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What are UPIC Adopters Saying?
Oregon State Treasurer
State Treasurer of Nebraska
Verizon
NACHA
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Financial Institutions offering UPIC:
•23 Financial Institutions have issued 825 UPICs •Total UPIC payments through August 1, 2009 1.45M valued at over $52Billion
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The Past - Electronic Payment with Remittance Information
Remittance informationNot deliveredFaxEmailDatafile820BAIProprietary (custom) larger customers)
Financial Institutione-payment with Limited remittance information
Accounting Software Limited electronic payment capabilities
Financial Institutione-payment with limitedremittance information
Accounting Software& Cash ManagementMostly manual entry and single invoice
Cash ManagementMostly manual entry and single invoice
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Business-to-Business Payments
A Solution Exists!
STP820
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What is the Straight-through Processing - STP 820?
Streamlined standard for making electronic payments
with remittance information.
Easy to implement & easy to use.
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STP 820 – Sleek…easy to implement in cash management and accounting software
Fields Mandatory
Customer Account Number XCustomer Name X Invoice NumberInvoice DateInvoice Gross AmountAmount PaidPO NumberDiscount AmountAdjustment AmountAdjustment Reason Code
12 adjustment reason codes01 Pricing Error 03 Extension Error 04 Item Not Accepted - damaged05 Item Not Accepted - Quality
06 Quantity Contested 07 Incorrect Product 11 Returns - Damage 12 Returns - Quality 59 Item not received 75 Total order not received 81 Credit as Agreed CM Covered by Credit Memo
10 Data ElementsIn the remittance area there are 10 data elements with places for explanation if desired.
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Making a PaymentSTP 820 Implementation at Union Bank of California
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Approved/Certified by
Promoted by
Supported by
Adopted by
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Today: The Beauty of the STP 820
Accounting Software
Accounting Software
CTX w
ith S
TP 8
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STP
820
CTX with STP 820
CTX with STP 820
Payables ReceivablesCustomer Account NumberCustomer NameInvoice Gross AmountAmount PaidInvoice NumberInvoice DatePO NumberDiscountAdjustment AmountAdjustment Code
Bank’s Web Cash Manager
ACH Operator
Customer Account NumberCustomer NameInvoice Gross AmountAmount PaidInvoice NumberInvoice DatePO NumberDiscountAdjustment AmountAdjustment Code
EDI820/STP820 STP820
EDI820STP820
A Standard that can be delivered by any bank
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Energy Company Posts to Receivables
“Any” Government Entity or Company
UBOC Web Cash Manager Payment to Energy Vendor
Customer Experience with Bank Cash Management Package
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Verizon
Posts toAccounts Receivables
- STP 820 module
The Clearing House (Great Plains DynamicsAccounts Payable – STP 820 module)
Citibank Verizon’s Bank
Customer Experience with STP 820 & Accounting Software
ACH Operator
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QuickBooks Accounts Payable from Coastal Software
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How can Government & Trading Partners use the STP 820?
Banking Cash Management Software
Accounting software from resellers
Middle-ware from software providers
CALL TO ACTION!!!
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But it will save money
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Enabling CHIPS and Fedwire to Carry Remittance Information
Research undertaken in October 2006
STP 820 data elements will simplify invoice payment and reconcilement
ISO has amended the ISO 20022 standard to include all STP 820 data elements
Fedwire & CHIPS working together on an implementation – Scheduled for 10/2010
What the Future Holds
www.chips.org
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Adoption is Growing
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The Clearing House research, “The Remaining Barriers to e-Payments and Straight-through Processing” at:
www.epaynetwork.com/cms/resources/research/corporate/001780.pdf
EPN STP 820 materials http://www.epaynetwork.com/cms/services/001457.php
UPIC materials
http://www.epaynetwork.com/cms/services/processing/value/risk/001480.php
Sign-up for webinars
– Next webinar will be August 26, 2009 2:00 P.M.
http://www.epaynetwork.com/webregister/
Resources
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Thank you
Sharon Jablon, AAPEPN, Business Development Manager212-613-0178sharon.jablon@epaynetwork.comwww.epaynetwork.com