Payment Considerations

No matter what method of EBPP you implement, realize that payment processing can be highly complex. For your customers, you will need to support multiple electronic payment system options, which might include credit cards, electronic checks, automatic balance transfers, and debit cards. Electronic fund transfers are the most prevalent transactions in the B2B world, but some business customers prefer to pay by other means. In addition, whatever payment methods you accept, you’ll need to integrate those services with your own A/R system.

Payment processing is made even more complicated by the number of parties that can be involved. For example, accepting credit-card payments means interacting with the credit-card companies or a third party like CyberCash. Accepting an electronic fund transfer means the processing will pass from the customer’s financial institution to the automated clearing house (ACH) network for settlement. And, if you syndicate your bill presentment to multiple sites, you must work with multiple consolidators, portals, and consumer service providers (CSPs) to get paid. If you’re a biller, this means the payment service you choose must be able to integrate with the many channels that may be involved in processing your payments.

Although accepting electronic payments usually means you get money faster, you should realize that most electronic-payment system mechanisms are neither real time nor online. The ACH network and credit-card infrastructures are batch-processing-intensive. No matter which service provider you choose, some level of integration or customization will be required for you to be able to accept batch-payment data transfers from external parties.

Another key concern is security. Be sure to choose a vendor with a sound approach for encrypting its data transfers. Related to this is the data-center infrastructure the payment provider offers. The payment vendor should have clearly documented backup and recovery procedures, and should ensure high levels of availability, reliability, and performance through its service-level agreements (SLAs). The payment vendor should provide you with reporting or audit-trail data for your internal analysis, ideally accessible through a Web-based administration interface.

Finally, standards compliance is becoming more important. For example, XML will play a critical role as a standard format for billing data, making it easier for trading partners to ingest such data into their own backend systems.

In addition, emerging standards for financial transactions, such as Open Financial Exchange (OFX) and Interactive Financial Exchange (IFX), will also play a role. OFX, created by CheckFree, Intuit, and Microsoft, defines a means for financial-services companies to exchange financial data over the Internet. IFX is a similar initiative designed specifically for online bill presentment and payment.

All these standards will play a role in providing an alternative to EDI, an expensive approach to electronic commerce that to date has been implemented only by very large companies with many trading partners and a strict B2B focus. Of the three, XML has the most momentum, thanks to the general push for more standard methods of B2B integration. OFX and IFX are in the medium adopter stage.