cpi summit europe presentation

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


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


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


• 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


• 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


What are the benefits to key Stakeholders utilizing the Payment Hub AP Process?

The “Payment Hub” Benefits


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


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


Global Transitions

Since the Global crisis first unfolded several years ago, leading banks have increasingly recognized the importance of payments and transaction business.


What are the catalyst for change?

With the help of their technology partners, banks will be looking to significantly enhance their technology offerings.


Pain Points


Branching Out

Key Business Drivers for Electronic Payments

Average Cost Per Transaction


Competitive Advantage


QUESTIONS?

cpi summit europe presentation

Documents