cpi summit europe presentation
TRANSCRIPT
Commercial Payments: What’s on the European Horizon?
Name of Presenter
Organization
Session Title Goes HereHow Payment Hubs
Will Alter the Commercial Payments Horizon
in EuropeKevin Woods, AOC Solutions
Scott Songer, SilverStream Advisors
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
Evolution of AP PaymentsAP Current State:
•Checks remain the primary method of payments for Supplies and Services
•ACH growing momentum but still far behind checks
•PCards significant gains but remains small percentage of overall payments
•AP Payment Cards gained traction in the marketplace- “Non-traditional payment forms” to meet the needs of the Clients and their issuers- Payment types morphed from traditional Single Use cards into lower risk card-based
payment solutions- AP Payments growth in the United States tops $27T Annually
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
Evolution of AP PaymentsAP Organizations Need:
•A better way to pay than costly checks•A more effective means than the timely (should this word be “time-consuming”?) capturing of ACH payment information•Automated ERP systems that “communicate” with payment solutions•More efficient means of notification about payments made•Their Pcard issuers to provide more automation, alternative payments and seamless integrations•Promises that can be delivered, not just promised
- Don’t need to be “over promised and under delivered”
•An issuer who listens and reacts•To know where to “turn” for thought leadership and expertise
Evolution of The “Payment Hub”
Clients utilize a variety of ERP/AP Applications that currently provide an output file that we have created custom integrated files specifications for to include but are not limited to:
Oracle SAPJD Edwards PeopleSoftPeopleSoft LawsonBanner MeditechMeditech MasterpieceGreat Plains QuickBooks
Organization (Buyer)
Profile & Configurations
Merchant (Buyer)Profile &
Configurations
Payment Type &
Interfaces
Check
EFT
Other
CardACH
What is a Payment Hub? – “The Basics”`Organization Agrees to Automate their AP Process using the Payment Hub Payment Platform
Organization Provides AOC their Master Merchant List
AOC Analyzes Master Merchant List for currently enrolled Merchants
AOC works with Master Merchant list to enroll all Merchants not set-up within Payment Hub
Payment Hub updated with Organizations Master Merchant List - Merchant Profile & Preferred Payment Options
The “Payment Hub”
PO Sent to Merchant
Invoice Submitted to Organization
ERP System
AP File sent to AOC (Approved Invoices)
Buyer Configurations
Merchant Configurations
Payment Types
AP File Processed
Payment ProcessInitiated
Card Based Payments Processed
Payment Remittance Sent
The “Payment Hub” Stakeholders
1. Client Initiated AP File sent to Payment Hub Payment Platform2. No Merchant Intervention Needed – Merchant never sees an
account number. Process completely automated.3. Allows Organizations to “Push” payment directly to Supplier4. Features a “Vendor Ghost Account” assignment for automated
“One-to-One” transaction reconciliation5. Credit limit of account is managed real time for invoice amount
– Uses credit limit of “0.00” during non-activity time 6. No card information in the hands of the supplier to help reduce
potential fraudulent charges7. Auto reconciliation takes place within Payment Hub
The “Payment Hub” Options
1. Client Initiated AP File sent to Payment Hub Payment Platform2. Allows Merchants to “Pull” payment directly from Organization3. Credit Limit updated on account for invoice amount4. Remittance notification sent to merchant to run transaction
on account number housed by Merchant5. Transaction is keyed/run on local merchant POS system6. Reconciliation takes place within Payment Hub set at a specific
threshold amount
The “Payment Hub” Options
• Client Initiated AP File sent to Payment Hub Payment Platform• Allows funds to be captured prior to payment being made to
Merchant• Funds drawn from Organization DDA account via ACH process• Single Use Ghost Account (SUGA) used – credit limit updated on
account for invoice amount• Upon receipt of funds, payment remittance is sent to Merchant
with specific PIN number and told to access Payment Hub• Merchant accesses Payment Hub which they enter their
assigned PIN to receive account information• Upon receipt of account information, Merchant runs
transaction via their local POS terminal• Reconciliation takes place within Payment Hub set at a specific
threshold amount
The “Payment Hub” Options
• Client Initiated AP File sent to Issuer Payment Platform• Alternative to Pcard when Vendor does not accepts payment
for Invoices on a “card account”• Does not require multiple files - works off same file as all other
payment forms• Payments to vendor made by Issuer• All data resident in the “Payment Hub”• Reconciliation takes place within Payment Hub at a specific
threshold amount
The “Payment Hub” Options
What are the benefits to key Stakeholders utilizing the Payment Hub AP Process?
The “Payment Hub” Benefits
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
Future of the “Payment Hub”AP Payments tomorrow•AP Payment shall always remain with us, but it how we handle them that will define our future•The integration of data and the direct reconciliation between the Client’s ERP/AP and the Seller AR systems has become the leading priority•In Europe: Movement to replace checks with an automated electronic payment solution, driven by technology solutions like the Payment Hub•US-based Clients: Integration between our platform and the major ERP systems (Oracle, SAP, JDE, PeopleSoft, etc) has been requested
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
What is the commercial payments value chain?
• The deployment of an e-payables solution that automates the process of payments is a huge gain in productivity, providing visibility in process and payment status
• Supports international trade and multinational businesses• Enables your clients to Leverage efficient settlement processes
of Guaranteed payments• Creating strategic value added partnerships with non-banking
entities and vendors to realize the full value of a payments revenue stream
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
Global Transitions
Since the Global crisis first unfolded several years ago, leading banks have increasingly recognized the importance of payments and transaction business.
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
What are the catalyst for change?
With the help of their technology partners, banks will be looking to significantly enhance their technology offerings.
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
Pain Points
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
Branching Out
Key Business Drivers for Electronic Payments
Average Cost Per Transaction
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
Competitive Advantage
COMMERCIAL CARDS & PAYMENTS SUMMIT EUROPE
QUESTIONS?