Paying Through the No's

White paper compares electronic payment methods

Herndon, VA  Aug. 1, 2001 The Council for Electronic Billing and Payment, a division of NACHA's (the electronic payments association) has published a white paper describing B2B electronic payments methods. The white paper, authored by the Council's Business-to-Business Task Force, develops a framework that businesses can use to evaluate the comparative benefits of specific electronic payment mechanisms.

"The purpose of the white paper is to provide an objective, educational tool on business-to-business electronic payments," said Pete Lambert, chairman of the B2B Task Force and vice president of Wachovia Bank. "The focus is on key issues that drive the selection of an appropriate payment tool."

The white paper is the second in a series produced by the Council on electronic invoice presentment and payment (EIPP). It outlines the features of B2B electronic payment methods  Automated Clearing House (ACH), alternative electronic networks (MasterCard RPPS, Visa ePay), and credit card  as well as traditional payments (check and wire transfer). For each payment method, the paper presents an overview, process flows for buyer- and seller-initiated payments, functional differentiators, and an economic analysis.

The first paper, issued in January 2001, analyzed the three models of electronic invoice presentment that are emerging in the market  Buyer Direct, Seller Direct, and Consolidator. Both papers are available on the Council's Web site.

"The Council for Electronic Billing and Payment believes that widescale adoption and product innovation will occur only when the executives in the B2B space have a broader understanding of electronic invoice presentment processes and related payment options," said Jane Wallace, acting chair of the Council and CEO of the Consumer and Payments Division at Princeton eCom. "This white paper plays an important educational role by providing a comprehensive overview of the electronic invoice presentment and payment arena."

EIPP is the B2B version of electronic bill presentment and payment (EBPP), by which bills are presented and paid on the Internet. While both business-to-consumer (B2C) and B2B transactions have similar processes, the B2B environment is more complex typically, involving multiple internal participants, detailed analytic requirements and intricate value chains. In addition, a more complex set of payment alternatives is typically available for B2B purposes.

"Because EIPP is a promising tool, TowerGroup projects a rapid increase in business usage to 8 percent of B2B bill volume by 2005," said Beth Robertson, senior analyst at TowerGroup and a member of both the Council and the B2B Task Force. "The many benefits for businesses migrating to EIPP include improved cash management, enhanced analytic and data access tools, improved productivity, and lower direct costs."