Abila MIP Going Paperless with your Accounts Payable
CPI Summit Europe Presentation
1. Commercial Payments: What’s on the
European Horizon?
Name of Presenter
Organization
Session Title Goes Here
How Payment Hubs
Will Alter the
Commercial Payments Horizon
in Europe
Kevin Woods, AOC Solutions
Scott Songer, SilverStream Advisors
COMMERCIAL CARDS &
PAYMENTS SUMMIT EUROPE
2. COMMERCIAL CARDS &
PAYMENTS SUMMIT EUROPE
Evolution of AP Payments
AP 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
3. COMMERCIAL CARDS &
PAYMENTS SUMMIT EUROPE
Evolution of AP Payments
AP 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
5. 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”
6. 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 Process
Initiated
Card Based Payments
Processed
Payment Remittance Sent
The “Payment Hub” Stakeholders
7. 1. Client Initiated AP File sent to Payment Hub Payment Platform
2. No Merchant Intervention Needed – Merchant never sees an
account number. Process completely automated.
3. Allows Organizations to “Push” payment directly to Supplier
4. Features a “Vendor Ghost Account” assignment for automated
“One-to-One” transaction reconciliation
5. 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 charges
7. Auto reconciliation takes place within Payment Hub
The “Payment Hub” Options
8. 1. Client Initiated AP File sent to Payment Hub Payment Platform
2. Allows Merchants to “Pull” payment directly from Organization
3. Credit Limit updated on account for invoice amount
4. Remittance notification sent to merchant to run transaction
on account number housed by Merchant
5. Transaction is keyed/run on local merchant POS system
6. Reconciliation takes place within Payment Hub set at a specific
threshold amount
The “Payment Hub” Options
9. • 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
10. • 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
11. What are the benefits to key Stakeholders utilizing the Payment Hub AP Process?
The “Payment Hub” Benefits
12. 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
13. 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
14. 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.
Since the Global crisis first unfolded several years ago, leading
banks have increasingly recognized the importance of payments
and transaction business.
15. 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.
With the help of their technology partners, banks will be looking
to significantly enhance their technology offerings.
Payment Hubs…Single File Solutions…Centralized Payment Modules..different terminology but the same needs..
Client needs a way to send one file and have the vendors paid….card lead, ACH when card not accepted..checks as a last resort..
True payments hub….provide the ability to create a payment that is predicated upon business rules that create the most efficient payment method for the Client and the vendor while carefully examining the stakeholders…Client, Vendor and Issuer
The economics of payment methods have become a strategic focus for Global corporate stakeholders.
Not only did the financial crisis hit the bottom line of banks, it also negatively impacted customer satisfaction levels and overall attitudes toward the financial services industry. Combined with a renewed interest in transparency, in 2011, banks will be expected to deliver much better levels of customer service.
In the B2B world as with consumer, cards are used and accepted much more frequently for certain spend categories in comparison to others. For example, in the fall of 2009, First Annapolis worked together with the NAPCP to launch a supplier acceptance survey. This figure shows relative supplier acceptance levels for varying types of spend. Purchasing card issuers, acquirers, and card networks have been proactive in recent years to enhance card acceptance in many of the categories listed below, including telecom, temporary staffing, utilities, and professional services such as accounting, consulting, and legal
Innovation, which is critical in the battle for clients,will become increasingly difficult and costly for banks to manage alone as the payments proposition
grows more complex —and especially as the pressure to evolve becomes more urgent. Banks will therefore need to consider whether partnerships, commercial
agreements and other alliances with non-banks vendors and technology operators can provide the capabilities they need to execute their chosen payments strategy promptly.
Collaborations with third parties can potentially help banks to speed time-to-market, spread investment expenses and reduce operating costs of new payments initiatives.
And partners can help banks extend their footprints (i.e. geographically, farther into client value chains, etc.), helping sway clients toward bank providers and away from competitors.
As the need to innovate becomes more urgent, however, banks will need to consider using partnerships to further more revenue focussed initiatives. And the pressure is likely to intensify in coming years, as banks focus time and money on increased regulatory compliance, leaving less bandwidth to innovate internally (even among the few banks that have been successful incubators of innovation in the past).ent Instruction.
