NACHA’s Council for Electronic Billing and Payment has published a white paper describing business-to- business 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 at http://cebp.nacha.org/publicdocs/publicdocs.html .
The two-part series on EIPP is designed to be of interest to billers, payers, financial institutions, technology providers, and other industry participants. Its purpose is to educate industry about EIPP, promote a common language and context for EIPP, and describe and review available EIPP options, including both presentment and payment alternatives.
“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 business-to-business 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 typically more complex, involving multiple internal participants, detailed analytic requirements, and intricate value chains. In addition, a more complex set of payment alternatives are 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.”
The mission of the B2B Task Force is to facilitate education and adoption of business-to-business, Internet-based electronic invoice presentment and payment (EIPP). The task force has 111 members representing 63 organizations.
The Council for Electronic Billing and Payment was formed in 1993 to act as a forum to facilitate, educate, and promote the use of electronic billing and payment programs and services to all interested stakeholders in the payments industry. The Council currently has 98 member organizations. The Council’s next meeting is October 22-23 in San Diego, CA. Guests are welcome to attend. More information is available at .
About NACHA – The Electronic Payments Association
NACHA is the leading organization in developing electronic solutions to improve the payments system. NACHA represents more than 12,000 financial institutions through direct memberships and a network of regional payments associations, and 650 organizations through its industry councils. NACHA develops operating rules and business practices for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet commerce, electronic bill and invoice presentment and payment (EBPP, EIPP), financial electronic data interchange (EDI), international payments, electronic checks, and electronic benefits transfer (EBT). Visit NACHA on the Internet at .
[Part One – Presentment Models (PDF Format)]
[Part Two – Payment Options (PDF Format)]