Global Payment Integration: Best Practices in Deployment

Global Payment Integration:

Best Practices in Deployment

Tim Kolenda

Regional Treasurer, NA

AbbVie, Inc.

Rene Pelegero

President

Retail Payments Global

Consulting Group, LLC

Frank D’Amadeo

Assistant Treasurer

Con Edison

Steve Bernstein

Executive Director

J.P. Morgan

1

What we will examine

• Global trends in payments

• How those trends are driving the next for Global

integration

• How Corporates are deploying new tools to drive

best practice integration deployment

• What does the future portend for improvments?

2

1 Retail Payments Global Consulting (RPGC) Group L.L.C. 4

2 AbbVie Inc. 13

3 J.P. Morgan 18

4 Con Edison 48

Agenda

3

4


Best Practices in DeploymentRene Pelegero

President

Retail Payments Global Consulting Group, LLC

4

Many Payment Schemes Globally

5

Global, Regional, Local Payment Acceptance

Global•Simpler, less expensive

•Low market penetration and approval rates

Regional•Expensive but increases market reach

with lower risk

•Approach might not be available in every Region

Local •Most expensive, FX implications

•Highest penetration and approval rates

6

Strategic Trade Offs

Global Regional Local

Addressable Market

Penetration

Smallest penetration usually limited to

the A and B segments of the socio-

demographic scale

Larger population addressable based on

the acceptance of regional cards or other

similar payment instruments

Broadest reach of addressable population,

accessible to all socio-demographic

segments, including Cs, Ds, and Es

Payment

Instruments

Accepted

International general purposes payment

cards (GPPCs) such as Visa,

MasterCard, Amex, and China Union Pay

(CUP)

Extends beyond GPPCs to also include

global brands with Regional reach. May

also include some non-card Payment

Instruments such a Online Banking e-

Payment (OBeP) and internationally

branded e-wallets

All GPPC and other domestic cards, including

debit cards and domestic Private Label credit

cards (PLCC) if these are enabled for e-

commerce. Also include bank transfers

(both credits and debits) as well as any OBeP

and cash acceptance

Payment

Instruments not

Accepted

GPPC branded cards enabled for

regional and domestic use only, any

other domestic cards, including debit

cards if these are enabled for e-

commerce. Also include Private Label

credit cards (PLCC) and bank transfers

(both credits and debits) as well as any

OBeP and cash acceptance

GPPC branded cards enabled for

domestic use only, any other domestic

cards, including debit cards if these are

enabled for e-commerce. It may also

include domestic Private Label credit

cards (PLCC) and bank transfers (both

credits and debits) as well as any OBeP

and cash acceptance

None

Ease of

Implementation

Easiest. Must ensure that card

processor has proper acquiring license

to operate in target countries

Harder. Must ensure that regional

provider has the proper licenses to

process selected payment instruments in

the region

Hardest. Must develop relationship with local

acquirers and local banks (see next).

Copyright © Retail Payment Global Consulting Group LLC –

Not to be copied or reproduced without permission

7

Global Regional Local

Local Legal Entity Not needed May or may not be required Required to establish legal entity in-

country. May be possible to get around

this by establishing a “collections”

relationship with a legal representative

Local Bank Account Normally not required May or may not be required Usually required to process any local

Payment Instrument such as bank

transfers, OBeP, or cash collections

Payment Instrument

Know-how

Little Must have some understanding of the

regulatory and customary aspects of

processing the specific local payment

instruments

Must have a good understanding of the

regulatory and customary aspects of

processing the specific local payment

instruments

Cost per Transaction

of Processing

Payment Instrument

Normally high. Usually restricted to

international interchange and also

subject to FX conversions. However, it is

possible to leverage high volumes to get

lower prices

Some cost of payments optimization is

possible but usually dependent on highly

specialized vendors that put a premium

on each payment

Best environment to optimize the cost of

payments. Dealing directly with local

providers but economies of scale usually

disappear

Taxes (to consumer

and to acceptor)

Transactions taxed in the Merchant’s

jurisdiction and rates. Consumers likely

are not taxed

Transactions may be taxed in the

Merchant’s jurisdiction or in another

favorable tax locations (e.g. Luxembourg

or Singapore) Consumers likely are not

taxed

Transactions are taxed at the local tax

rates and consumers may also be subject

to Value Added taxes

Copyright © Retail Payment Global Consulting Group LLC –

Not to be copied or reproduced without permission

Strategic Trade Offs

8

Cross Border Acquiring Regulations

Licenses– Acquirers can acquire transactions only in countries where Visa and Mastercard have granted them

licenses

– Acquirers can only enter into acquiring agreements with legal entities that reside in the same country as the acquirer is licensed

Physical Presence– Merchants must have a physical presence with “employees or agents conduct[ing] business activity

directly related to providing the cardholder with the goods or services purchased in the specific transaction”.* In other words, having an attorney’s office as the legal presence in a country is not sufficient

Settlement– Although many large trans-national acquirers can accept and process transactions in many

currencies, they are generally limited to the number of currencies in which they can settle

– Acquirers will only deposit funds from payment transactions into bank accounts that belong to the legal entity with whom they have an agreement

– Unless otherwise agreed with acquirer, acquirer will automatically convert from transaction currency (Ct) to settlement currency (Cs) at a FX rate and uplift only known to the acquire

9

Global Connectivity Challenges

Billing engine

Wells FargoAuthorize.net

Ingenico(Ogone)

WorldPay(Vantiv-Litle

platform)

Decidir

Direct Mail

US Based Customers

Switzerland

Argentina

Chile

Customers

Other

Credorax

EU Based Customers

HDFC

CC-AvenueIndia

Westpac

Australia

Magento

Worldpay(Streamline

platform)

Spain

10

The Emergence of the SwitchClient Domain

Merchant Domain

Payment Scheme

Domain

Customer

Magento Other e-commerce site

Switch

Acquirer 1

Any supported currency

Acquirer 2AmexSEPA

CT & DD

Local card

Schemes

Local

OBePsOther



EURGBP


ANY*

* ANY is any other currency that merchant decides to hold

Billing Engine

11

Conclusions

Global Payments Integration can be challenging

– Regulations, customary practices, economics

– Transaction flows, technologies, multiple vendors

– Global Payments cannot be ignored

Take a long term view

– Develop road map (i.e. countries and methods of payment)

– Stay abreast of market developments (e.g. new methods of

payment, new vendors)

12

13


Best Practices in DeploymentTimothy Kolenda

Regional Treasurer, North AmericaAbbVie Inc.

13

ABBV In-House Bank

CHF CZK DKK EUR HUF JPY MXN NZD PLN RUB SEK SGD USD

Physical AccountsEntity

A

ACr LIBOR –X Bps

BDb LIBOR +Y Bps

. . . .

ZCr LIBID –X Bps

Db LIBOR +Y Bps

Notional Accounts

Entity

B

Entity

C

Investments:MMF/

Time Deposits

Current State• Affiliate sends request for funds in advance

• Affiliate needs to forecast cash needs

• Affiliate books manual journal entry

• Affiliate needs a foreign currency bank account

• Treasury needs to convert foreign currency remittances

Cash Pooling and Notional Current Accounts

Future State• Automated same-day funding available

• Regional Treasury validates cash needs

• ERP automatically books journal entries

• Affiliate no longer needs hold a FX bank account

• Treasury will hold foreign currency as received

14

14

Payment Factory

• Payment file approved and managed from single location –> Controls improved

• “Payments On Behalf of” (POBO) done by the bank using local clearing systems –> Cost savings

• IHB can settle the A/P using foreign currency on hand –> Reduced FX trades

UK Sub

US Sub

JP Sub

Pay US Sup

A/P SSC

EUR Bank

USD PMT FileUS Sup

US Sup

FR Sup

ABBV In-House Bank

USD EUR

UK Sub US Sub JP Sub

Notional Accounts

Physical Accounts

Op. Bal: ₤ 10MM

Db: (₤ 2MM)

End Bal: ₤ 8MM

Op. Bal: $ 5MM

Db: ($ 1MM)

End Bal: $ 4MM

Op. Bal: ¥ 20B

Db: (¥ 2B)

End Bal: ¥ 18B

Exchange: (USD/GBP & EUR/JPY)

booked by the IHB as a journal entry

with rates based on daily FX rate

EUR PMT File

15

15

POBO Process

ABBV

In-House Bank

Entity A(EUR Functional)

Notional

Current

Account

Op. Bal: € 10MM

DB: (€ 2MM)

End Bal: € 8MM

EUR Vendor (€2MM)

PM

T R

eq

ue

st

Cash: €12MM

Loan: € 4MM

Curr: (€16MM)

Net Exp. € 0

Before Pmt

Cash: €10MM

Loan: € 4MM

Curr (€14MM)

Net Exp. € 0

After Pmt

IHB Exposure

• AP invoices input by PTP group

• Invoice approval by Finance Director in ERP / AP Sub-module

• AP payment batch file is routed to Treasury sub-module of ERP

• Payment file routed to local bank via SWIFT and paid from local Finco bank account as “POBO”

PTP invoice input ERP

AP

Business

Approval

NO

YES ERP

TR

16

Finco

Local Bank

Account

SEPA Payment

16

International Cash Pooling Structure

Finco Master Accts (held in-country, with local banks)

EUR

AT BE DKFR

DE

GR SE

IE LU

NO

NLHR

PT

BA

ES

(EUR)

IT

CZK

JE

CZ

(CZK)

HUFHU

(HUF)

NOK DKK SEK

USD

Daily Cash Mgmt. Sweep

PLN

PL

(PLN)

UK

(GBP)

GBP

AU

CN EG

HK

IN ID

JP

KR MY

NZ

PH

SG TW TH

VN

AUD HKD JPY NZD SGD

MX

(MXN)

MXN

CA

(CAD)

CAD

BR

ILTR

Bank I

Bank HBank G

Bank F

Bank E

Bank D

Bank ABank C

Bank B

Affiliate Bank Accounts

(held with local banks)

17

18


Best Practices in DeploymentSteve Bernstein

Executive Director

J.P. Morgan

18

What is ISO 200222?

ISO 20022 is a Universal

Financial Industry Message

Scheme based on XML

(eXtensible Mark-up Language)

ISO 20022 with Common Global

Implementation (CGI) has become

the format of choice for consistent

messaging across multiple banks

and countries

27

Format Extended Field

length

Transaction

Batching

Interoperable

Messaging

Global

applicability

Language / Multi-

byte Characters

Simple Bank

Integration

ANSI X12 ✓

SWIFT FIN ✓

EDIFACT ✓ ✓

Global Flat File ✓ ✓

ISO20022 ✓ ✓ ✓ ✓ ✓ ✓

Flexible in structure and language

to operate with the latest and

emerging technologies

Global and open financial messaging standard, ISO 20022 has evolved into the industry’s preferred

standard for new initiatives.

19

ISO 20022 Adoption – Global viewSWIFT worked with corporates on the implementation of ISO 20022 standards

*By the end of 2022 high-value payment systems for the top 5 traded currencies will require ISO 20022

Source: iso20022.org 20

SWIFT global payments innovation (gpi)

• SWIFT gpi is an initiative meant to

dramatically improve the customer experience

by increasing the speed, transparency and

end-to-end tracking of cross-border payments.

• In parallel, SWIFT gpi is exploring of use of

open APIs and blockchain technologies to

build additional value into the cross-border

payment process

gpi Bank

sending

institution

Payment

originator Unique

Transaction

Identifier

gpi Bank

receiving

institution

Payment

beneficiary

Payment flowPayment status and

confirmations

What is SWIFT global payment innovation (gpi) Key benefits and features

Dramatically improves cross-border payments across the correspondent banking network

• End-to-end payment tracking

• Transfer of rich payment information –

reducing time spent on investigations

• Same-day use of funds

• Stop and Recall will allow messages to be

stopped in case of fraud or error, no matter

where they are in the gpi chain

• Future state to migrate MT traffic to ISO

20022

21

SWIFT global payments innovation (gpi)

Source: SWIFT.com

22

◼ API configuration supports frictionless

payments integration

◼ Streamlined reconciliation creates

content-rich reporting and auto-apply

invoicing reduces days sales

outstanding

◼ Last second initiation allows longer

funds availability and increased days

payable outstanding

Payments are immediate, irrevocable, secure, contextual and utilize ISO 20022

Client benefits

Real Time Payments

NPP

RTP

ICT

Live

Developing

RTP locations:

IBPS

RTR

IMPS

23

Real Time Payments – US

1

2

3

4

5

6

Key features

Amount: Credit transfers in USD of up to a $25,000 maximum

Speed: Money is available to payee within fifteen seconds

Availability: Instant payments available 24/7/365

Messaging: Extensible messaging (ISO 20022) supports more sophisticated

applications (e.g., bilateral messaging)

Security: Sender initiates the transaction from own funded

DDA

Reach: By EOY 2018, 23 TCH owner banks are expected to be part of the

RTP network

1. http://edgardunn.com/2017/06/financial-institution-running-late-faster-payments/

2. Used with permission from The Clearing House; excludes deposits of banks without US retail branches

State Deposit Share Coverage at

Bank “Go Live”2

0%-

20%

21%-

40%

61%-

80%

81%-

100%

41%-

60%

24

SEPA Instant Credit Transfer

• Expected that more than 2,000 payment

service providers (PSPs) will have

declared to be an SCT Inst scheme

participant by the end of 2018

• Available 24/7/365

• Initial duration of 10 seconds with a

maximum amount of 15,000 euros

• Current implementation guidelines are

based on ISO 200022

• Critical mass expected by 2020

The European Payment Council’s solution to deliver payments anywhere and at any time

Source: European Payments Council

25

Real-Time cross border payments in APAC

SWIFT to pilot gpi-enabled real-time enabled cross border payment inflows

to Australia, plugging into the country’s domestic New Payments Platform (NPP)

• This will allow faster P2P remittances and trade

settlement

• Approach will build on SWIFT gpi and its connectivity

with domestic instant payment systems

• NPP API framework is aligned to ISO 20022

standards

• Users, both consumer and businesses, can create a

PayID with their participating FI. Thus allowing the

link of financial accounts to information such as

phone numbers and email addresses

Source: SWIFT.com

26

Global Instant Payment Schemes

Americas Europe Africa Asia Pacific/Middle East

Belize

APS

Brazil

SITRAF

Canada

RTR*

Chile

TEF

Columbia

CENIT

Mexico

SPEI

Nicaragua

PayExpedite

US

RTP

Denmark

NetsRT

Europe

SEPA ICT

Finland

Siirto

Iceland

RTGS

Poland

Express Elixir

Russia

IPS*

Norway

Straksbeta-

linger

Spain

SNCE

Sweden

BIR

Switzerland

SIC

UK

FPS

Ghana

GhIPSS

Kenya

M-PESA

Nigeria

NIP

South Africa

RTC

Australia

NPP

Bahrain

EFTS

Bangladesh

BD-RTGS

Cambodia

China

IBPS

India

IMPS

Hong Kong

FPS

Japan

ZENGIN

Malaysia

eRENTAS

Philippines

InstaPay

Saudi

Arabia

FR-ACH*

Singapore

G3 Fast

and

Secure

Transfer

South

Korea

HOFINET

Sri Lanka

SLIPS

Taiwan

CIFS

UAE

UAEFTS

* Denotes countries not yet live but target date has been announcedSource: instapay.today

27

Takeaways

ISO 20022 is an inflection point for Global

Integration and being adopted prodigiously

28

APIsOpen Banking APIs

Benefits of Open Banking• Consumers have more choices of service providers.

• More Customized and relevant product offerings.

• Banks can extend additional services to more

consumers.

• Introduction of new digital offerings

• Transfers data between two applications – in real time.

• Allows internal applications to communicate with each

other or to external/ 3rd party applications efficiently.

What is an API?

29

Why are APIs Important?

• Standardized APIs can provide an efficient and effective

communication method

• Studies have found over 70% of all Americans say they would use

entirely computer-based support for their banking*

• Internet banking parity from a functionality perspective

• These will be the new normal

• ERP solutions, payroll vendors, and other service providers will use

these to interact with banks, replacing legacy file transfers / BAI files /

OFX / CSV downloads

• This allows the bank to be able to react and build to client needs

much more quickly

Source: Ipsos poll conducted on behalf of ABA. For the survey, a national sample of 1,000 adults aged 18+ were interviewed online, August 2016

Where are APIs going?

30

Growing API Importance & Usage

Source: Aite Group survey with 12 product managers at global fintech vendors, June to August 2017

31

32

Digital Wallets

Source: GlobalWebIndex by ystats.com

One-third of global internet users used mobile payments services in Q2 2017

32

Global Payment Gateways

Invoice

workflow &

financing

Dynamic

discounting

Track &

Trace

Value-add

Payables

Optimize

payment

type, speed

and cost

Pay multiple

invoices /

bills

Auto and

partial pay

Receivables

UI - Payor

Portal

HPP-

Hosted

Pay Page

JavaScript

Widgets

APIs

Payor – Use Cases Value-addChannel

UI - Payee

Portal

HPP-

Hosted

Pay Page

JavaScript

Widgets

APIs

Payee – Use Cases Channel

Payment Types

Wires RTP

FX ACH PSD2: AISP/ PISP

E-Wallets Cash & Coin

Card Checks

Services

Onboarding &

Service

Reconciliation/

Virtual AccountingFraud Tracking

Liquidity

Management

Bill

Payment

Invoice

Payment

Commission

Bill

Payment

Invoice

Payment

Data Analytics &

Decisioning

B2C B2C

C2B C2B

B2B B2B

Global

Payment Gateway

Reporting

Commission

33

Trending

Leveraging API’s, open banking and digital wallets to improve

customer experience is a key focal point

E-Wallets

34

1,8

59

2,2

90

2,7

74

3,3

05

3,8

79 4,4

79

1,0

53

1,3

65

1,7

23

2,1

20

2,5

52

3,0

01

56.6%

59.6%

62.1%

64.1%

65.8%

67.0%

50%

52%

54%

56%

58%

60%

62%

64%

66%

68%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2016 2017 2018 2019 2020 2021

Worldwide eComm Sales

APAC eComm Sales

APAC % of Total

eCommerce Global Growth

APAC leading the opportunity

APAC e-retail revenue is expected

to nearly double by 2021

Evolving Payments Landscape

E-wallets dominant

Technology Disruption

Internet penetration will be ~49% by 2019

Significant growth in online mobile

usage and internet penetration

APAC eCommerce sales1 (U.S. $’B)e-Commerce sales by payment methods

Digital wallets are overtaking

traditional cash payment methods

30%

22%

16%

11%

7%4%

10%10%

51%

16%

9%7%

4% 3%

CreditCard

eWallet Banktransfer

Cash onDelivery

Debitcard

Pre-PaidCards

Others

2016 2021E

Source: eMarketerSource: Worldpay as of Nov 2017

Online Penetration Asia Pacific

29.5% 32.8% 35.7% 38.5%

40.6%

43.1% 45.8%

48.8%

25%

30%

35%

40%

45%

50%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2016 2017 2018 2019

Smartphone Penetration

Internet Penetration

Source: eMarketer

More than 75% of connected consumers in APAC made their most recent eCommerce

purchase via mobile, attributed to emerging, mobile-first markets in the region

Source: Kantar TNS annual study of digital behaviors, Dec 2017;

Digital disruption sweeping APAC

2

The next big eCommerce opportunity

35

Digital Payment Trends - China

12Source: https://realmoney.thestreet.com/articles/05/30/2018/e-commerce-mobile-and-china-takeaways-latest-internet-trends-report

• China’s online ad revenue has reached $50

billion, and its annual mobile payment

volumes has increased to $16 trillion.

• China is now the largest e-commerce market

in the world. It accounts for more than 40%

of the value of worldwide e-commerce

transactions, up from less than 1% about a

decade ago.

• China has also become a major global force

in mobile payments with 11 times the

transaction value of the United States.https://mobilepaymentconference.com

36

Canada’s payments landscape over next 5 years.Payments Canada – Industry Modernization Roadmap

• Payments Canada is engaged in a major multi-

year Modernization Program

• Three new core payments systems

• Core wire system (Lynx)

• Core batch system (SOE)

• New real-time payments system (RTR)

• Mandatory adoption of ISO 20022 across all

payment systems

• New risk models, settlement models, and

system rules

37

Digital Payment Trends - India

Source: https://www.livemint.com/Industry/MMgDqn8vcgXPjLFiVoLav

Trending Mobile Wallets in IndiaSource: https://www.statista.com/outlook/296/119/digital-payments/india#market-revenue

• UPI (Unified Payment Interface)

technology launched by National

Payments Corporation of India(NPCI) on

August 17th will result in more people

conducting cashless transactions.

• Use of POS(Point of Sale) machines and

digital wallets are growing as government

and retail companies push for less-cash

payments

Payment Trends in India

38

Cross-Border Payments Services in LATAM

LATAM service providers are aiming to support smooth and secure cross-border transactions to continue the rapid

eCommerce growth

• Customers in Brazil, Argentina and Mexico will spend

$32B more online in 2019 than in 2014

• Companies like allpago, MercadoPago and

PagSeguro are utilizing credit cards linked to a single

account to settle at numerous eCommerce sites

• RippleLatam utilizes a digital wallet to allow users to

send any currency to any Ripple wallet – including

virtual currencies

• braspag has now integrated with PayPal and

PagSeguro increasing merchant exposure through

digital wallets

39

Evolution of Channels

Source: https://gomedici.com/overview-of-the-payments-industry/

40

What is Blockchain?

f

◼ Cost reduction through disintermediation

◼ Innovation through competitive pressure

◼ Efficiency through streamlined, automated

processes

◼ End-users in control of their data

◼ Transparency and integrity of data

◼ System maturity:

◼ Stability

◼ Performance

◼ Resiliency

◼ Security

◼ Regulatory compliance

◼ Interoperability and standardization

1 A blockchain is a specific type of Distributed Ledger Tech (DLT) which offers additional security features over basic DLT, but the terms are often used interchangeably.

Benefits Challenges

5

41

Countries Adopting Blockchain

Source: https://mlsdev.com/blog/the-future-of-the-blockchain-technology-use-cases-geographical-expansion-potential-risks-and-challenges

42

Size of global Blockchain market

Source: Statista.com

43

How Blockchain could change global payments

Source: https://gomedici.com/overview-of-the-payments-industry/

• Through smart contracts, foreign

exchange can be sourced from

participants willing to facilitate the

conversion of fiat currencies

• Enable international regulators to

monitor transactions in real-time and

enforce AML Policies.

• Allows transfer of funds with minimal

fees and guaranteed delivery without

need of correspondent banks

44

iin (Interbank Information Network)

Fraud

Fraudster Lists

Account Validation

Anti-Money

Laundering

Inquiries

Risk Rating

Sanctions

Customer

Information

FATF

Account/Name/

Address

Enrichment

Tracking

Payment Status

Inquiry Status

Runs on Quorum, ®, a permissioned-variant of the Ethereum blockchain, developed by J.P. Morgan

Client Experience

Reduce inquiry turn

around times, payment

delays and client

engagement

Security

Enhanced security of

personal information

across a secure,

encrypted network

Information Exchange

Associated with

Underlying

Transaction

Exchange information

and communicate

about in-process

transactions (currently

not possible) Verified Information

Leverages bank’s

sourced and validated

customer and KYC

information – currently

70+ banks on network

Reduced Cost

Faster processing

reduces cost

* Today’s goal is to enroll 400 banks covering 80% of the world’s payment flow*45

iin Continued

46

Takeaways

Interconnectivity of devices, evolving consumer experiences when

making payments, and the expansion of blockchain development and

investment is making integration into global payments viable, cheaper,

easier, and more secure.

47

48


Best Practices in DeploymentFrank D’Amadeo

Assistant Treasurer

Con Edison

48

Consolidated Edison Facts

• Con Edison's principal business segments are Consolidated Edison Company of New York's regulated electric, gas and steam utility activities, Orange & Rockland Utilities' (O&R) regulated electric and gas utility activities, and Con Edison's competitive energy businesses

• 2nd Largest Solar Utility in US

• Con Edison/O&R provides electric and gas service to approximately 3.6 million and 1.2 million customers respectively

• Operating Revenue approximately $12 Billion

• Total Assets approximately $51 Billion

• Approximately 15,000 employees

49

2017 Annual Con Edison Payment History

Personal Banking10%

Credit Card Payments

4%

Check's33%

In Person2%

ACH/Wire5%

In-house (DPP, Internet, IVR)

45%

Other 1%

Percentage of Dollars

Personal Banking

17%

Credit Card Payments

5%

Check's22%

In Person3%

ACH/Wire4%

In-house (DPP, Internet, IVR)

48%

Other 1%

2018 - % of Transactions by Category

50

Con Edison Payments Process Flow

In-House

Lockbox

Custom

Chase

ACH

Checks

Chase

Home

Banking

E-lock

box

Accounts

Receivable

System

Internet

IVR

Telephone

ACH Debit File to Bank

ACH

Debit File

Contracted

Payment

Aggergators

ACH Files

Un-

honored

Returns

51

Payment Integration Methods

• Home Banking – Route payments to Chase E-Lockbox

• Decision Repair – Fix once – automatic repair thereafter

• NOC’s back to originator

• In-house system development for Internet and Mobile

• Redesign under way – focus on customer experience

52

Payment Integration Methods

• In-house Lockbox

• Integrated ACH module

• Expanded to process Correspondence Mail and A/P

invoices

• Outsource Credit Card Payments

• NY regulator is just beginning to consider allowing

socialization of credit card fees

53

Current Pain Points

• ACH payments represent 5% of total

• ERP’s are customized and do not by default support

CCD+ or CTX payment transactions with addenda

detail

• Straight through processing success rate very low

• Many obstacles

54

RTP vs Existing Payment Process

55

Will Real Time Processing Help?

• B2B payments represent 40% of Check Volumes

• ACH only represent 5% of Total Payment Volume

• Corporate ERP’s

• Escheatment Issue - 12% of Checks are never

cashed

• RTP has the potential to automate B2B

payments

56

Will Real Time Processing Help?

• Customer Refunds

• Issue 200,000 Checks Per Year - $50 Million Dollars

• Escheatment Issue - 12% of Checks are never

cashed

• Use Zelle to Issue Electronic Refund Payments

• Use service provider to process vs. customizing legacy

systems

57

Q & A

58

Global Payment Integration: Best Practices in Deployment

Documents