Ach Streamline

TECHNOLOGY INSIGHTS REPORT
Electronic Payments: Streamline P2P, Reduce Costs

A Buyers Guide to Electronic Payment Solutions
ePay
Featuring Profiles on American Express Bottomline Technologies J.P.Morgan TradeCard Vendorin
www.paystreamadvisors.com
Q2 2010
Electronic Payments
Table of Contents
Introduction .................................................................................................. 1 Case for ePayments Automation ................................................................ 2
Inefficiencies in Current Payment Processes ...................................................... 2 Factors Driving ePayments ................................................................................. 3 Challenges to Automating the Payment Process ................................................ 5
Table of Contents
Electronic Payment Types .......................................................................... 7 ACH Transactions ........................................................................................ 8

ACH Versus Card Payments ............................................................................... 8 Factors Driving ACH Payments ........................................................................... 8 Challenges to Adoption of ACH ......................................................................... 10
Wire Transfers ............................................................................................ 11
When to Use Wires ............................................................................................ 11 Wires Versus ACH Payments ............................................................................ 11
Corporate Purchasing Cards .................................................................. 12

Rationale for a P-Card Program ........................................................................12 P-Cards Deliver Against Goals ......................................................................... 12 Maturity of P-Card Programs ............................................................................ 13 Challenges to P-Card Programs ....................................................................... 13
Different Flavors of P-Cards ..................................................................... 15

Traditional Cards ................................................................................................15 Ghost Cards ...................................................................................................... 15 Single Use Cards .............................................................................................. 16 Buyer Initiated Card Payments ......................................................................... 16
ePayables Innovations .............................................................................. 17

Electronic Invoicing ............................................................................................17 Dynamic Payables Discounting ........................................................................ 18 Multi-Payment Platforms ................................................................................... 19
Learn from the Innovators ........................................................................ 20 Electronic Payments Solution Functionality .......................................... 21 Solution Profiles ........................................................................................ 24
American Express ............................................................................................... 24 Bottomline Technologies ..................................................................................... 27 Case Study: State of Mississippi ..................................................................30 J.P. Morgan & Chase Co. .................................................................................... 32 TradeCard ........................................................................................................... 35 Vendorin .............................................................................................................. 38 Case Study: Firestone ..................................................................................41
Evaluating ePayment Vendors ................................................................. 42 About PayStream Advisors, Inc ............................................................... 44

2010 PayStream Advisors, Inc. info@paystreamadvisors.com www.paystreamadvisors.com
Electronic Payments
Introduction
The Accounts Payable (AP) department has long suffered the stigma of being called a cost center or black hole from which money is constantly flowing out. Especially in recent times, with the spotlight turned on AP, the hole has become more noticeable. But just as every cloud has a silver lining, this added emphasis on the operations of the AP department has brought about a paradigm shift in the traditional invoice and payment management process. Increasingly, financially savvy managers understand that the AP department has tremendous potential to deliver strategic benefits around supplier relations and working capital improvements. Traditionally, the enemy of radical improvements in the financial supply chain has been an overreliance on people and paper-based processes, which result in lengthy processing cycles, slow and delayed payments, and unhappy suppliers. However, all of this is changing. On the one side, heightened visibility has led to a growing awareness among financial managers that things are changing, with or without their approval. On the other hand, robust and easy-to-use electronic payment (ePayment) options such as ACH and purchasing cards are widely available in the market today, and are opening the doors for innovative AP and finance departments to take control of supplier payments and shine in the limelight. PayStream has developed this Technology Insight Series report Electronic Payments: Streamline Purchase-to-Pay, Reduce Costs to provide an overview of the electronic payment landscape and address the following questions generally asked by finance managers:
Introduction
Payments Convergence Conference: PayStream has created the annual ePayments Convergence event to meet the needs of sophisticated finance professionals who are aggressively seeking to improve their penetration of ePayments, and who desire highquality information to drive decision making. This two day event is held in June each year to showcase leading practices by corporate innovators. For more information, go to www.paystream summit.com
What challenges are organizations facing when it comes to manual
settlement processes? What factors are driving the migration from paper checks to electronic payments? In spite of the widespread availability of ePayments and their tangible benefits, why are more than 75 percent of B2B payments settled via checks? What barriers are hindering further adoption of ePayments and how can they be overcome? What are the different types of electronic payments? How do ACH payments, wire transfers, and purchasing card transactions differ from one another? What benefits does each ePayment tool deliver? growth of electronic payments? Where does ePayments fit in a broader P2P automation roadmap? key players in this space? What solution functionality is available from these technology vendors? in order to streamline their payment processes and increase the usage of electronic payments?
What related developments in the procure-to-pay space are impacting the
What are the functional components of an ePayment solution? Who are the What are some of the best practices innovator companies are following
A companion report titled Electronic Invoice Management: Your Passport to Paper-free Accounts Payable, featuring profiles on nine leading electronic invoicing vendors, is also available on our website at http://paystreamadvisors.com/store/ details.cfm?id=284.
2010 PayStream Advisors, Inc.
info@paystreamadvisors.com
Electronic Payments
Case for ePayments Automation

Inefficiencies in Manual, Paper-Based Payment Processes
Even though automation has already delivered tangible results in the physical supply chain, automation has barely trickled into organizations financial operations. This is especially true as it pertains to the settlement of payables and cash flow visibility. Given the historical lack of innovation in this arena, buyers and suppliers today are experiencing a number of problems that prevent true optimization of the financial supply chain. Unlike improvements enjoyed by the automation of physical supply chain transactions, todays payables and collection processes are still primarily manual, non-integrated and inefficient resulting in numerous challenges for trading partners.
Inefficiencies in Current Process
Table 1
PAIN POINTS IN THE FINANCIAL SUPPLY CHAIN BUYER PAIN Inability to extend payment terms and increase DPO.
Supplier inquiries into payment status tie up valuable AP resources. Cost of printing and mailing paper checks, stop payments and re-issue costs with lost checks. Suppliers high cost of capital means incremental cost of goods and services for buyers. SUPPLIER PAIN Lack of visibility and uncertainty around payments hinders cash flow forecasting efforts. Need to maintain excess cash as hedge against uncertainty increases working capital tied-up in the cycle. Limited access to capital leads to reliance on expensive financing options like factoring and asset-based lending. Lack of or insufficient remittance detail along with payments makes cash application a challenge.
Manual and Inefficient Processes: The purchase-to-pay process has long

suffered from the inefficiencies inherent to manual, paper-based processes including the lack of visibility and control over financial transactions, unavailability of timely information and high processing costs. While buyers suffer from the high cost of making payments via checks, suppliers also face the issue of lost checks and missing or insufficient remittance detail. All these factors lead to frequent inquiries, exceptions and disputes.
Lack of Cash Flow Visibility: Lack of visibility and uncertainty around
cash flow is a source of major concern to suppliers. In the current environment, there still exists a great deal of uncertainty around the timing and amount of approved receivables. As a result, suppliers are compelled to maintain excess cash as a hedge against such uncertainties, which leads to an unnecessary increase in working capital that is tied up in the order-to-cash cycle. Many suppliers also frequently carry a higher amount of debt on their balance sheets to fund this uncertainty. The wasted operating capital affects the entire financial supply chain, increasing the costs of working capital and reducing profitability for all the participants.
High Cost of Supplier Financing: The above factors primarily pressure
from buyers to extend payables terms and uncertainty around the payment process pose another challenge for suppliers. Suppliers, who have limited access to capital, often have to rely on highcost financing methods like factoring or asset-based lending to fund their working capital and improve their cash positions. The cost of financing can be significant to suppliers, which in many cases is passed on to the buyers in the form of higher cost of goods and services.
Electronic Payments
Factors Driving Electronic Payments

Payments are the final step in the invoice receipt-to-pay processing cycle. With significant effort spent on the initial stages of accounts payable processing that includes invoice receipt, workflow and matching, organizations must not experience failure in exchanging payments in a timely and cost-effective manner. Electronic payment methods allow processing of payments in a faster, cheaper, and more convenient manner than paper-based checks. Depending on the type of ePayments tools and technologies adopted by an organization, it can achieve the following tangible benefits:
Factors Driving ePayments
Our parent company has mandated that we move toward reducing the number of checks we issue & increase our use of ACH transfers. We will be sending out a letter to our vendors requesting their banking information. - Accounts Payable Clerk, Mid-size Manufacturing Company in North America
Cost reduction from reduced headcount, lower administrative expenses, and

decrease in printing and mailing costs.
Reduction in the amount of paper consumed by an organization, especially

with the use of purchasing cards to remove purchase orders and invoices from the equation. and check float.
Compression of the procure-to-pay cycle resulting from the reduction in mail Increased ability to capture early payment discounts offered by suppliers due
to shorter processing cycle times.
Improved visibility into payments and overall spend translating to better

cashflow forecasting and risk management abilities. printed checks and data entry errors.
Reduction in the losses incurred resulting from check fraud, theft of pre Positive impact on the environment from going green as a result of
migrating from checks to electronic payments. Given the tangible benefits electronic payments deliver over paper-based checks, it is not surprising that adoption of the various formats of electronic payments has significantly increased over the past five years, while check usage is on a decline (see Figure 1).
Figure 1
REDUCTION IN CHECK VOLUMES WITH CORRESPONDING INCREASE IN ELECTRONIC PAYMENT METHODS Source: Federal Reserve and NACHA research
Electronic Payments
Factors Driving ePayments
Results of PayStreams Electronic Payments and P-Cards Adoption Survey 2009 echoed the same sentiments. A majority of companies (80 percent) stated that the need to reduce procure-to-pay transaction costs was one of the biggest factors driving their efforts to increase electronic payments. This was followed by the goal to remove paper from the AP department, cited as a reason by more than half the organizations surveyed (55 percent). Additionally, better cash management (46 percent) is another important factor. Given the overwhelming interest in cost reduction and improved cash management, we believe that increasing electronic payments will be a top automation priority for organizations over the next three years.
Figure 2
TOP FACTORS DRIVING ENTERPRISES TO FOCUS ON ELECTRONIC PAYMENTS Reducing overall payment costs emerged as the biggest driver for ePayments
While we are excited about the growth in electronic payments, there still exists one cause for concern. Though organizations have increased the usage of ePayment methods, a typical AP department remains mired with paper-based check processing. Data from the survey reveals that, on average, 71 percent of indirect spend and 78 percent of payment transactions are still processed via checks (Figure 3).
Figure 3
PAPER REMAINS THE RULE, NOT AN EXCEPTION! Organizations still rely heavily on paper when it comes to payments
Electronic Payments
Challenges to Automating the Payment Process

Paper remains the rule and not an exception in a typical accounts payable department. What is the reason organizations still use checks so heavily? What factors are holding back the adoption of ePayments? Supplier Resistance: Given the fact that ePayments expedite payments, it is surprising that supplier resistance is one of the top barriers to the adoption of electronic payment methods. Persuading suppliers to change their processes to align with buyers needs is a costly and time-consuming process, and its success depends largely on the buyers ability to present a compelling value proposition to suppliers. In many cases, buyers have failed to effectively communicate the value of AP automation initiatives to their suppliers, and as a result have struggled to generate the results they expected. Suppliers are also reluctant to pay any fees to financial institutions that may be associated with payments via electronic methods. Additionally, many suppliers struggle with proper posting of account receivables from ePayments due to the inconsistent transmission of remittance information along with ePayments. This cash application problem can be a significant challenge. See PayStreams Receivables & Collection Management Report at http://paystreamadvisors.com/ store/details.cfm?id=284. For the supplier, payments automation should represent an opportunity to improve the efficiency of their accounts receivable (AR) processes. Therefore, buyer organizations need to be more proactive in providing supplier-driven visibility into the invoice settlement process. Given this scenario, technology providers that deliver supplier onboarding services in conjunction with the solution itself are gaining strong traction in the market. Technical Challenges: Until recently, a prevalent barrier to the adoption of ePayment applications was concern around their ability to easily and cost-effectively integrate with existing AP, AR, billing, cash management, supply chain, and other legacy systems.
Barriers to ePayments
We are currently campaigning to our suppliers to switch to ePayments. Suppliers with banking information on the invoice are automatically set up for ACH payments. New suppliers are asked to participate in ACH payments at setup. Manager, F500 Dairy Manufacturing Company in North America
Figure 4
BARRIERS TO ADOPTION OF ELECTRONIC PAYMENT METHODS The biggest barrier was the unwillingness of suppliers to accept electronic payments
Electronic Payments
Barriers to ePayments
However, state-of-the-art applications available in the market today that integrate seamlessly with back-end systems and provide secure data transfer protocols are enabling companies to overcome their initial resistance to automation. Most applications integrate easily with systems on the buyer and supplier sides, resulting in secure and seamless data transfer, as well as streamlined processes and more efficient workflows. Adopters can expect faster approval and cycle times, as well as better cash flow forecasting ability and vendor relationships. For those companies concerned with the upfront costs of technology, hosted solutions and Software-as-Service (SaaS) delivery models offer minimal implementation costs, with technology providers responsible for maintenance and upgrades. Last, but certainly not least: given the current emphasis on going green, electronic payments provide a substantial positive impact on the environment. They save trees and energy, while reducing air pollutants and solid waste. Business Practices: Electronic payments herald a tremendous change in the way buyers and suppliers conduct business. A natural barrier to electronic payments adoption on the supplier side is the loss of detailed remittance information. Many suppliers are concerned that if they switch to electronic payments they will not get sufficient remittance detail, which facilitates payment reconciliation. Unless ePayments transactions are properly structured, transmission of usable remittance details is limited. The recent emergence of payment and remittance advice consolidation, however, is beginning to alleviate this issue. These services, provided by third party invoice and payment networks and processors, collect detailed payment information from payers and make it readily available to suppliers in formats compatible with their accounting systems. With many solutions, suppliers have multiple options in which they can receive detailed remittance information - email, fax or even direct integration with their accounting systems. Another reason why buyer organizations hesitate to make the move to electronic payments is the perceived loss of mail float, which is inherent to paper checks. However, the advantages associated with check float are quickly diminishing as a result of electronic check imaging, which has accelerated check presentment to a day in most cases. In fact, usage of purchasing cards delivers more float than paper checks when check imaging is factored in. Furthermore, the cost savings from electronic payments typically outweigh the benefits of check float given current low interest rates and fast collection environments. Finally, the functionality provided by electronic payment solutions that allow buyers to control settlement with specific payment dates make check float a moot point.
We are investigating cost savings from electronic payments and weighing this against the loss of float to determine monetary benefit. This is being done in conjunction with our bank. Manager, Large Manufacturing Company in North America
Payment Service Providers (PSP): PSPs provide third party payment facilitation including translation and remittance management to foster payment collaboration between buyers and sellers.
Electronic Payments
Electronic Payment Types

Electronic payments come in many different flavors. Historically they have evolved into three different types:
ePayment Types
ACH, the most frequently used electronic payment method is designed for
large volume credit and debit transactions.
Wire transfers are perhaps the most expedient form of payment. They
are often used for high-dollar, one-off transactions, as well as international payments. function to purchase goods at the point of sale, and in many cases without paper invoices, but also permit accounts payable professionals to automate the settlement process. They have evolved into several types, including corporate purchasing cards, travel and entertainment cards, and fleet cards that target specific indirect spend categories, as well as one/multi-card systems that target multiple indirect spend categories.
Commercial cards are unique as they not only support the procurement
None of the above electronic payment types are mutually exclusive from one another or from paper checks. Depending on an organizations level of innovation, technological savvy and diversity of supplier base it can use a combination of the different payment types to satisfy its unique financial and business requirements. Our research shows significant changes in organizations payments mix over the last two years (See Figure 5); checks have been on the decline with a corresponding increase in electronic payments. Upcoming sections of this report will provide more details on the different electronic payment types and identify the benefits and challenges associated with each.
Figure 5
CHANGE IN USAGE OF ELECTRONIC PAYMENT METHODS Electronic payments are increasing while checks are on the decline
Electronic Payments
Adoption of ACH Payments
ACH Transactions
ACH payments are electronic payments made through the Automated Clearing House (ACH) Network, which is truly a powerful system in the United States. The ACH network has extensive reach to almost every financial institution in the country, and therefore provides access to every business that has a banking account. This is a significant advantage of ACH as no other electronic network has the same reach. PayStream research revealed that amongst the different electronic payment types available, ACH is preferred by a number of businesses. According to survey results, more than two-thirds (70 percent) of organizations have the ability to make ACH payments to their suppliers. Additionally, more than half (60 percent) of the companies that participated in our survey stated that they are taking active steps to increase their ACH ePayment programs. Suppliers are also more willing to accept electronic payments via ACH, compared to purchasing cards, as was revealed by the survey. This is supported by the fact that suppliers do not have to pay interchange fees when it comes to accepting ACH payments.
How does ACH Differ from Card Payments?

While both ACH and corporate purchasing cards have the same objective of transferring funds electronically from the buyer to the supplier, the two payment tools differ in the way they do it. It is important to understand the differences in order to select the most suitable payment type.
The primary difference between the two payment types is that they flow
through different networks; while ACH payments are made through the automated clearing house network, card payments are processed via a commercial card network.
ACH processing also differs from credit card processing in the sense that
it does not provide real time authorization of transactions; instead, it allows funds to be electronically debited or credited to a companys deposit account within a few days. of the transaction value as interchange fees, suppliers do not have to pay any fees for ACH. These transactions typically only involve a small fee per transaction to the buyer. out of the equation. On the other hand, card payments offer a significant amount of float to buyer organizations.
Unlike credit card payments, where suppliers have to pay a percentage
ACH payments are settled the same day or the next day at best, taking float
Factors Driving ACH Payments

PayStream research found that owing to the following payment attributes, ACH has emerged as a favorite ePayment tool among organizations:
Low Cost: ACH payments cost nothing to the supplier, while wire
transfers and card payments can be expensive. Overall, ACH is the lowest cost ePayment option to both buyers and suppliers. More than half the organizations (53 percent) that participated in our survey stated that they
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Electronic Payments
preferred ACH over other electronic payment options for this reason.
Ease of Integration: Almost half the companies surveyed (48 percent)
Benefits of ACH Payments
liked ACH for the ease with which it can be integrated with AP and other back-end accounting systems. Further, more than two-thirds of companies (68 percent) have already integrated their AP systems with ACH payments. receiving ACH payments, it is not surprising that they are accepted by more of an organizations supplier base than card payments or wire transfers. Almost half of the companies that participated in our survey (42 percent) validated this fact. the use of ACH are data security, protection against fraud, and the ease of use of ACH payments.
Supplier Acceptance: Given that suppliers do not have to pay any fees for
Other Factors: Some of the other factors that emerged as driving forces for
See Figure 6 for more details on how ACH payments measure up against card payments and wire transfers across a range of payment attributes.
Figure 6
PREFERRED ELECTRONIC PAYMENT METHODS ACROSS PAYMENT ATTRIBUTES ACH payments were preferred as they were low cost, could easily integrate with AP systems and were accepted by suppliers
Electronic Payments
Challenges to the Adoption of ACH

Even though ACH is a preferred form of payment across several payment attributes, the adoption of this form of electronic payment has been hampered by several factors. Our research reveals that: Almost half the organizations surveyed (47 percent) stated that less than five percent of their suppliers are enrolled in their ACH ePayment program. A mere one percent of innovative companies have been successful in enrolling over 80 percent of their supplier base.
Barriers to ACH Payments
More than 40 percent of companies make less than five percent of their
payments using ACH, and none of the organizations have been able to convert more than 80 percent of their payments to ACH. The primary barriers to the adoption of ACH payments are the perceived loss of float, the challenges involved in collecting banking information from suppliers, and the limited ability to exchange remittance information. On the buyer side, organizations are faced with the challenge of collecting banking details from a number of suppliers, validating the information, and keeping track of changes to banking procedures on the supplier side. Buyers are also concerned about moving from checks to ACH due to lost check float. Suppliers on the other hand are hesitant to accept ACH payments as the remittance detail delivered along with ACH payments is insufficient, or their systems are unable to receive and manage the information delivered. Our survey shows that more than one-third of the organizations have no clear remittance exchange mechanism in place to provide suppliers with adequate details to post their books without manual handling. Banks and technology vendors that provide ACH payment solutions need to address these issues if they wish to increase ACH share of business-to-business payments. They can do this by providing robust solution functionality that delivers remittance information in multiple formats supported by supplier systems. These should go hand-in-hand with value-added services such as supplier recruitment and management of bank account details.
Figure 7
REMITTANCE INFORMATION TRANSMISSION WITH ACH Auto-generated email is the most widely used method of transmitting remittance information along with ACH payments
10
Electronic Payments
Wire Transfer Payments

A wire transfer is an electronic payment type that transfers money between two banking accounts. Bank wire transfers can be made between domestic financial institutions, and also between banks located in different countries. Transfers within the United States are made via the Federal Reserve Wire Network (Fedwire). International transfers are made using the SWIFT (Society for Worldwide Interbank Financial Telecommunication) bank wire system.
Wire Transfers
When are Wires Typically Used?

Wire transfers are not as widely used as ACH or card payments because they are considerably more expensive than other forms of ePayments. Banks can charge buyers anywhere between $5 - $50 to send a wire and suppliers between $5 - $20 to receive a wire. However, wire transfers are the most expedient form of electronic payment, and funds can be transferred from the senders bank account to the receivers bank account the same day or by the next day. Wires are mostly used for large dollar, one-off transactions, which need to be processed and paid immediately. Another area where wire transfers are used is in the realm of international payments. Wires are perceived to be one of the safest ways of sending money to suppliers that are located outside the United States. More than half the organizations (53 percent) that participated in PayStreams survey stated that they preferred wires over other payment methods when it came to international settlements.
How do Wires Differ from ACH?

ACH transactions and wire transfers are sometimes confused with each other. They are both electronic transfers of money, but they are not the same type of transactions.
Wire transfers are typically used for transferring large dollar amounts of In the United States, wire transfers are processed through the Federal
Reserve Wire Network, while ACH payments are processed over the automated clearing house network.
funds between banks very quickly, whereas ACH can be used for any type of transaction.
Wire transfers are much more expedient than ACH payments, as they are
a real-time method of transferring payments. ACH on the other hand uses a batch process, and typically there is a one to two day delay to settle ACH transactions. records, organizations typically do not receive sufficient information with their wire transfers to post the payments to the correct accounts without manual intervention. suppliers.
While ACH payments support remittance delivery to suppliers via addenda
ACH transactions are less expensive than wire transfers, for both buyers and
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Electronic Payments
Rationale for Purchasing Cards
At businesses of all sizes, finding more efficient ways to buy what the company needs is getting serious attention. The corporate purchasing card, or p-card, has emerged as a favorite tool for many companies because it cuts overhead costs and provides strong reporting and spend management tools, as well as delivering the benefit of float and earning the buying company substantial rebates when card program volume is high. Large companies with established p-card programs continually look for ways to expand and improve them, often inviting competitive bids from the card providers or issuers. Even mid-sized and small companies that do not have p-card programs are investigating them for the above reasons.
Corporate Purchasing Cards
Rationale for a P-Card Program

The attraction of a p-card program is the automation and process efficiency it brings, especially to the purchase of small items, where it is difficult to justify the high overhead of using requisitions, purchase orders, approvals, matching and settlement by check through the AP process. P-cards have proven that a lot of overhead can be pared away by streamlining the process and essentially giving end-users cards they can use anywhere. However, companies do retain control over the process by placing restrictions on which merchants employees can go to and the amounts that they can charge. Increasingly, the attraction of a p-card program is also the rebates that are provided by the issuer based on how much is spent on the p-card. In a world where payment float is disappearing owing to ACH payments and check imaging, purchasing cards represent the only payment option that still offers buying organizations the advantage of float. Finally, cards are attractive because they make it easy to document how much has been bought from a given supplier; information that can sometimes be used to negotiate price discounts based on high-volume purchasing.
P-Cards Deliver Against their Goals

Performance improvements and cost savings from p-cards are readily apparent. Table 2 highlights the average cost savings realized by enterprises as a result of the utilization of p-cards. Plastic has sliced the cost of a single procure-to-pay (P2P) transaction by nearly half. In current economic times, where companies are attempting to reduce costs to improve the bottom line, this is perhaps the most desirable attribute of a p-card program. Additionally, commercial cards, on average, lower the P2P cycle times by a third. In addition to streamlining the P2P cycle, p-cards provide the additional benefit of incentives or rewards (cash back, etc.) from the card-issuing bank. Almost half the organizations (46 percent) participating in our research study indicated
Table 2
PERFORMANCE IMPACT OF COMMERCIAL CARDS
PERFORMANCE METRIC
NON P-CARD/ TRADITIONAL P2P PROCESS
P-CARD PROCESS
Average cost to process a single P2P transaction Average P2P cycle time
$37.30 16.5 days
$19.70 5.2 days
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Electronic Payments
Maturity of P-Card Programs
receiving an incentive varying from 0.5% to 2.0%. Further, a majority (54 percent) of the enterprises stated that due to the convenience and ease of use of p-cards, organizations choose them over any other payment method. Given the significant transaction cost and time savings, as well as the added incentive of rewards, it is not surprising that 65 percent of the enterprises participating in our research stated that they are either extremely satisfied or very satisfied with their p-card programs.
Maturity of P-Card Programs

PayStream research found that organizations are at varying levels of maturity with their p-card programs (Figure 8). Nearly half (49 percent) of the organizations have deployed p-cards for over 3 years, with an average age of 5.2 years, indicating that p-cards are a fairly mature technology solution. However, even though p-cards have been in existence for more than a decade, they capture, on average, only 9.3 percent of the enterprise indirect spend. With the cost of processing a p-card transaction nearly half of that of a non p-card transaction, an average enterprise can realize significant cost savings, as well as incentives from card-issuing banks by processing more transactions via p-cards.
Figure 8
MATURITY OF P-CARD PROGRAMS Almost half of the respondents (49%) have had their pcard programs for over three years
Challenges to Implementing P-Card Programs

In spite of the tangible benefits purchasing cards deliver, there have been hurdles to their widespread acceptance. On the supplier side, it has been lack of acceptance due to interchange fees. Even on the buyer side, challenges around controls and accounting applications have been hindering increased acceptance of p-cards. Control Issues: Lack of control is an issue that has scared some companies away from even offering p-cards to their employees. Many executives just do not like the idea of issuing cards to hundreds of employees when the company gets the bill and has the liability for paying for whatever has been bought. Issuing p-cards does not, however, mean throwing control out the window. In our experience, cards can be subject to a variety of controls, including:
A limit on the transaction size - e.g., no more than $100 can be spent in any
one transaction.
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Electronic Payments
A limit on the number of daily, weekly, or monthly transactionse.g., no more

than three card transactions will be allowed in any one day.
A limit on the value that can be charged in a given day, week or monthe.g.,
Barriers to P-Cards
no more than $250 per day may be charged to restricted cards.
Blocking certain merchant categories where the card should never be used
- e.g., no charges will be accepted for purchases at liquor stores, jewelry stores or car dealerships.
Because different people are expected to make different purchases and charge different amounts, the restrictions can be adjusted for each cardholder by card number. The more tightly the program is controlled, the less abuse can occur, but such controls also tend to keep programs smaller and reduce overhead savings, potential discounts and rebates. Ultimately, each company will choose its own balance point between control and savings, often making adjustments as it gains experience. Accounting Application: Another stumbling block is the issue of charging these small purchases to the right department, project or other accounting category. To alleviate this issue, most pcard providers also offer reconciliation tools to map transactions to the appropriate accounting codes. Companies use several techniques to improve the accounting process,. One technique is assigning the card to a specific accounting category for which a cardholder is most likely to buy. If this person buys exclusively for that category, mapping the transactions charged to that card and that accounting category will be right 100 percent of the time. If that person makes only 90 percent of his or her purchases for that category, the company has a choice: it can simply allow all purchases charged to that account, on the grounds that a few misapplications dont really matter, or it can require the person to review his or her purchases and assign the purchases appropriately. Alternatively, companies can issue multiple cards to persons who would buy for multiple accounting categories. The cardholder has to juggle these different cards and to choose the right one each time, but the accounting is straightforward. Companies can also use a combination of these two practices, based on buying needs and departmental preferences.
Table 3
OVERCOMING CHALLENGES ASSOCIATED WITH IMPLEMENTING P-CARD PROGRAMS
Problem: Loss of Control Over Purchases

Potential Solutions
Problem: Loss of Control Over Accounting Application

Potential Solutions
Transaction size ceiling Limit on number of transactions per day/week/month Limit of charge value per day/week/ month Blocking of inappropriate merchant categories
Default to the principal accounting category for which cardholder frequently makes purchases Use multiple cards for multiple accounts Accounting tied to merchant category codes
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Electronic Payments
Different Flavors of P-Cards

Corporate purchasing cards come in many different flavors, and are classified based on whether or not a piece of plastic is involved and how the card number information is provided to the supplier. This section looks at the different types of p-cards and highlights their differences.
Flavors of P-Cards
Traditional Cards
Traditional p-cards are the most widely used corporate card mechanism for procurement purposes. Traditional cards involve the issuance of physical, plastic cards to employees that are authorized to make credit card transactions in the organization. Cards can be assigned to individuals or departments with configurable controls, such as dollars per month and per transaction, transactions per day and per month, type of spend, or specific suppliers. Traditional cards are typically used at the point-of-sale or online at e-commerce websites and the individual or p-card administrator is responsible for reviewing the card statement to ensure that the charges are appropriate and then allocate them to the correct account code or budget.
Ghost Cards
In order to overcome some of the accounting issues associated with traditional pcards, organizations have been using ghost cards. Ghost cards are also known as virtual cards, supplier cards, or AP push cards. They do not involve the issuance of a piece of plastic, but instead rely on the usage of unique card account numbers. A ghost card is not issued to a particular employee, but each department is given a unique ghost card number, and purchases made using that card are automatically charged to that department. By centralizing all purchases for a particular department with a single account number, the payment and accounting processing is made easier. Another practice that is prevalent when it comes to ghost cards is the issuance of unique ghost card numbers to preferred suppliers for ongoing use. When an employee needs to buy something from that supplier, they call, email or visit the supplier and make their purchase. The supplier automatically charges the ghost card for purchases made by the employee. If the supplier sells to multiple business units or for different accounting categories, the supplier can collect the correct accounting information at the time of the sale and attach it to the record that would be reported back through the card network and the issuing bank, and it would be applied automatically to the right accounting category. Ghost cards have gained popularity as they support transaction limits and merchant code blocking like purchasing cards, but additionally they allow program managers to track and reconcile card activity without having to put a piece of plastic in the hands of every buyer in the organization. Another advantage of ghost cards is that suppliers can provide direct details of charge information into corporate ERP systems, so that purchases can be properly allocated, even without a physical invoice.
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Single Use Cards

A recent innovation in the area of commercial cards is the advent of single-use cards which are exposed uniquely for a specific transaction. Single-use cards can be plastic or virtual but they are mostly virtual cards. In this case, the card system can reveal the card number to the merchant at the conclusion of a successful order or shipment. These cards can be used by buyers for settlement on shipment, settlement on receipt or serve as a non-integrated check replacement settlement mechanism. The heart of this payment mechanism lies in its ability to offer time-based and dollar-range controls for each transaction and to capture and append unique accounting information to the transaction record to automate the reconciliation process. Instead of using a single card account number for each department or supplier, in this case, when payment has to be made, the system draws an account number from a pool of accounts and secures it with date and dollar range restrictions. If the supplier tries to overcharge the dollar amount or attempts to get payment before the specified date, the transaction is denied. The card pool design effectively eliminates the need for ghost and virtual cards, and allows buyers to use the same account for both partial shipments and recurring payments. This provides a degree of security superior to ghost cards as it precludes suppliers from charging more than the amount pre-authorized, and effectively eliminates fraud losses as the card can only be used by the specified merchant. Once used, the preauthorization request expires, and the account number is returned to the account pool.
Flavors of P-Cards
Buyer-Initiated Card Payments

Another innovation in the corporate card realm is the introduction of buyer-initiated card payments. In a traditional supplier-driven card transaction, whether the card information is delivered at the beginning or the end of the AP process, the supplier has to take certain steps to initiate the event that starts the payment process. Buyer-initiated card payments, on the other hand, turns the traditional seller-initiated transaction workflow 180 degrees by allowing buyers to drive the transaction. Buyers can send the payment file directly, from their ERP systems, with no point-ofsale transaction required and no need to show the card to the supplier. Under this scenario, the money is automatically deposited in the suppliers account, without any intervention on the seller side. Another advantage of buyer-initiated card payments is that unlike point-of-sale pcard transactions, these transactions are approved prior to payment, allowing buyer organizations to apply all internal purchasing policies and approval rules.
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ePayables Innovations
Along with the evolution of electronic payment tools, we are noticing a number of innovations in the procure-to-pay space. Figure 9 shows the adoption of various technologies in the accounts payable space, based on PayStream survey results. Electronic payments via ACH and purchasing cards are the most widely adopted technologies in the AP space. One of the primary reasons for this high traction is that when compared to more comprehensive procure-to-pay implementations, electronic payment solutions are relatively easy and quick to deploy, are less expensive, and deliver a quick return on investment. However, the emergence of innovative tools and technologies in AP automation has a direct impact on the uptick of electronic payments. Three related developments that support and complement electronic payments are electronic invoicing, dynamic payables discounting and multi-payment platforms.
Key Insights!
Figure 9
ADOPTION OF VARIOUS AP AUTOMATION TECHNOLOGIES Electronic payments via ACH and p-cards are the most used automation technologies in the AP department
Electronic Invoicing
Automation solutions that enable trading partners buyers, suppliers and banks to seamlessly exchange transaction-related information and funds are indelibly changing the invoicing and payables landscape. A new crop of electronic invoice networks are making significant inroads into reducing inefficiencies and driving costs out of companies financial operations through the elimination of paper. These electronic invoicing solutions improve the invoice receipt-to-payment cycle by streamlining how organizations receive and approve invoices and make payments. These new technologies have been given further impetus by the fact that the AP department is no longer considered just a cost center. Innovative financial managers are now recognizing AP automation as an area offering tremendous potential
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Electronic Payments
to generate bottom-line improvements with processing acceleration and discount management abilities, better ability to monitor and manage spend, strengthen working capital positions, and build stronger trading relationships. While the adoption of electronic invoicing is still limited to larger companies, we are evidencing this trend trickling downward to small and medium sized businesses for the following reasons:
Key Insights!
The evolution of hosted and Software-as-a-Service (SaaS) models has Table 4

DEFINING DYNAMIC PAYABLES DISCOUNTING SOLUTIONS DPD solutions are dynamic in more ways than one. They Allow suppliers to control the timing of payments. Calculate discount fees and payment amounts dynamically based on the number of days remaining until the due date. Provide the ability to dynamically capture discounts as the working capital needs dictate, rather than having to negotiate discounts in advance. Allow trading partners to tap into an alternative source of working capital with the use of third party creditors who pay early on behalf of the buyer.
significantly lowered the upfront cost of implementing AP automation solutions and reduced the hassle of maintaining them. Realizing that removing paper from AP needs to be accomplished via a series of small steps - not a big bang - companies are leveraging and upgrading previous investments in AP technologies. The convergence of electronic invoicing and front-end invoice imaging presents organizations with a single, comprehensive solution that can manage both paper and electronic invoices through a common process. Value added-services delivered by e-invoicing solution providers around supplier recruitment have enabled buyer organizations to bring suppliers onboard more quickly.
Dynamic Payables Discounting

A financial practice in place for years in parts of Europe is gaining acceptance in the United States, largely because of the technological innovations of a few, relatively new electronic invoicing and payment solution providers and collaborative bankers. PayStreams analysts have coined the term dynamic payables discounting, or dynamic discounting for short, to define this concept. Dynamic discounting solutions provide suppliers with the option of accepting early payments against any or all of their approved receivables, at any point, up to the maturity date for a discount fee. A portion of the finance charge or discount fee can be passed on to buyers. Our research reveals that this functionality has been rapidly gaining acceptance as it offers financing to suppliers at attractive rates while delivering an additional income stream to buyers a win-win situation all around. Many buyer companies are not nimble enough to take advantage of valuable discounts. Some seek to extend terms in order to preserve cash. Still others have investment alternatives so attractive that they outweigh the opportunity cost of missing a discount. Suppliers, on the other hand, too often find themselves financing sales by factoring their account receivables or through asset-based lending - both expensive sources of capital. Some suppliers, particularly smaller companies, dont enjoy either option and are frequently strapped for cash. Dynamic discounting serves the cash management needs of buyers and suppliers alike. The solution providers create the technological framework to facilitate this process. The transaction can be self-funded by the buyer or a bank can stand in as a short-term lender. Through Web-based buyer-supplier networks, buyers are able to project compressed settlement terms through supplier discounts. Suppliers are able to pick and choose among an array of payment options for each outstanding invoice. Banks pay the bill and collect from the buyer the full original price minus a percentage of the discount savings; an arrangement often referred to as revenue sharing. According to our research, when third party financing is involved, buyers are able
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to reduce their working capital requirements, some by as much as 40 percent, and suppliers gain access to capital at a more competitive rate than they are likely to obtain through a local bank.
Key Insights!
Multi-Payment Platforms
One emerging payment trend that is breaking a number of traditional concepts around electronic payments is the emergence of multi-payment platforms for settlement that include commercial cards. Using these platforms, buyers can send the payments from their ERP systems through the provider to the supplier. Under this scenario, the money is automatically deposited in the suppliers account, either through a commercial card, ACH or wire transaction, without the need for any manual intervention from the supplier. In the multi-payment platform situation, the buyer determines which suppliers to enroll in this platform and has the ability to monitor and/or deactivate suppliers at any time. The buyer also selects the payment method that each supplier is authorized to receive and picks the exact date for payment. The exact amount is then deposited on that date into the sellers account, without the need for plastic or card numbers, reducing keying errors. Another advantage of these platforms is that payment occurs after the accounts payable process, post matching or approval workflow, bringing another layer of control to the equation. Buyer-Side Benefits
Table 5
MULTI-PAYMENT PLATFORM PROCESS 1. The company uses current processes to procure goods and services. 2. Suppliers send invoices to the AP department 3. Invoices are matched/approved and entered into accounting system 4. Payments are batched and sent to the solution 5. Funds are deposited into suppliers account using the payment type selected by the buyer 6. Payment confirmation is sent to the buyer 7. Remittance information is delivered to the supplier
Organizations can increase electronic payments and reduce checks, with
minimal change to existing processes, resulting in a decrease in payment processing costs. able to determine the exact timing and method of payment. reduction of check fraud and account number masking.
Buyer organizations are in complete control of the payment process, being Multi-payment platforms deliver increased payment security through the Buyers also have the flexibility of increasing days payable outstanding (DPO),
improving cash conversion cycles and reducing cash flow volatility. incentives such as rebates and early payment discounts.
Organizations are placed in a favorable position to leverage financial

Supplier-Side Benefits
On the supplier side, multi-payment platforms simplify payment processing,

through the elimination of check processing.
These solutions also facilitate the capture of full remittance information on the
supplier side, improving the payment reconciliation process. reduce days sales outstanding (DSO).
Suppliers are now in a better position to improve cash flow forecasting and
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Learn from the Innovators

Convergence of ePayments
Stand-alone p-card and ACH programs are insufficient to meet the needs of the changing marketplace for ePayment solutions. The most efficient ePayment programs have harnessed a multi-channel strategy to attack the automation opportunity with a range of interconnected solutions which PayStream calls, Payments Convergence. PayStream believes the US disbursement market is converging on an expanded set of payment solutions driven by the need for efficiency gains, working capital improvements and improved visibility. PayStream recommends that organizations should examine the following best practices to gain maximum benefit from their electronic payment programs: Conduct regular spend analysis and segmentation. Spend analysis provides detailed spend data that is actionable and can identify categories for ACH and P-Card expansion, as well as enables them to identify instances of non-compliance with policy, procedures, or contractual terms. Organizations should assemble a cross-functional team with representatives from finance, procurement, and treasury to develop annual goals. Companies should then focus on growing electronic payments to suppliers in several targeted tiers. Enhance Payment Monitoring and Controls. Very few of the companies we have surveyed have robust control mechanisms to monitor payments especially to support growth in the number and type of transactions. New tools are now available, which incorporate additional control and reporting structures to handle alerts, workflow and payment tracking across payment types. Establish ePayments as the standard for conducting business with key suppliers. PayStream research found that innovator companies are much more likely to have defined electronic payments as the standard means of conducting business with strategic suppliers. This, in turn, promotes compliance with internal procurement and payment policies, and reduces maverick spend. Secure executive sponsors for the P-card program. P-cards streamline both ends of the procure-to-pay cycle. Organizations should develop a business case for p-cards by calculating the return-on-investment from such a program, and then secure executive sponsorship to achieve the associated cost savings. Without executive sponsorship in place, organizations may find it difficult to drive the implementation of a p-card program. Designate a P-card administrator and empower the position. Many administrators spend too much time on program administration, and thus only a limited amount on expansion and growth. The administrator should not only be responsible for the day-to-day tasks related to the programs, but should be responsible for the continuous expansion, compliance, and sale of the program to the internal stakeholders and external suppliers. Promote cross-functional collaboration among key stakeholders. Cross-functional coordination among key stakeholders such as accounts payable, procurement, finance, treasury, and suppliers establishes an environment where key information flows easily between these stakeholders and facilitates achievement of corporate goals.
Key Insights!
Payments Convergence Conference: PayStream has created the annual ePayments Convergence event to meet the needs of sophisticated finance professionals who are aggressively seeking to improve their penetration of ePayments and desire high-quality information to drive decision making. This two day event is held in June each year to showcase leading practices by corporate innovators. For more information, go to www.paystream summit.com
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Electronic Payments Solution Functionality

Electronic payments solutions deliver a range of functionality from supplier enrollment and management to payment processing and remittance detail delivery. PayStream Advisors has identified the following functional components and value-added services that are usually offered by ePayment technology providers: Supplier Enablement and Enrollment: As identified earlier, supplier adoption is key to the success of any electronic payment program. In best case scenarios, the application and the solution provider:
ePayments Functionality
Deliver vendor segmentation analysis to identify suppliers who are most
likely to switch to electronic payments and develop activation campaigns to recruit suppliers to the solution. to-many relationships, allowing suppliers to interact with multiple buyers at the same time.
Offer a quick, easy, and painless online enrollment process. Support many Provide additional services, such as recruiting suppliers for dynamic
discounting and segmentation analysis to identify high spend suppliers who may offer significant early payment discounts.
Electronic payment solutions offer functionality to allow suppliers to enroll themselves by logging into the application to provide bank account and registration information. Alternatively, buyers can manually enter supplier information or import the same from their ERP or AP systems. In some cases, vendors go a step further to authenticate the bank account information provided by suppliers before payments are initiated, either by verifying a cancelled check or by directly calling the suppliers bank.
Figure 10
ELECTRONIC PAYMENTS SOLUTION FUNCTIONALITY
ePayment solutions streamline and optimize the payment process and deliver tangible results around processing efficiencies, cost savings and working capital improvements.
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System Integration and Data Mapping: Many buyers and suppliers are hesitant to use electronic payments owing to concerns around integration with existing accounting infrastructure. To overcome this barrier, electronic payment technologies delivers seamless functionality to integrate the application with AP technologies on the buyer side and AR technologies on the seller side. These solutions also facilitate interaction between buyers and suppliers by:
Delivering built-in adapters for major ERPs like SAP and Oracle, while
providing custom integration for virtually any accounting system, including home-grown and legacy applications. formats (payment details, remittance information, etc.), at the time of supplier enrollment itself. systems and making it available on an online portal or passing it directly into suppliers accounting applications.
Providing any-to-any data mapping between buyer and supplier document Extracting payment and remittance information automatically from buyer
Online Portal and Supplier Self-Service: Through the integration of self-service supplier portals, electronic payments solutions can truly drive collaboration between buyers and suppliers. These portals accelerate the exchange of information between trading partners and provide improved visibility and control over financial transactions.
Suppliers ability to log into an online portal and track payment status in They receive notification immediately upon completion of the buyers
real-time strengthens the visibility and control they have over their accounts receivables processes. payables approval process, allowing them to monitor and assess their receivables, as needed. information and to notify buyers of any changes.
Suppliers can use the portal to also manage their profiles and banking And for the buyer, this translates into a reduction in resources required to
resolve discrepancies and respond to inquiries into invoice and payment status.
Payment and Remittance Processing: ePayment solutions deliver robust functionality to automate the steps that buyers take to initiate, post, and execute payment, including preparation, processing, and submission of the payment file to the bank. Some solutions also deliver capabilities around consolidation of all payment processing and transaction information enterprise-wide, including sophisticated multi-bank reporting for a single view of cash balances, as well as provide support for international and multi-currency payments. Payment automation solutions also provide comprehensive functionality around remittance delivery to suppliers by:
Allowing suppliers to specify and change the format in which they would like
to receive the remittance detail.
Providing functionality for suppliers to manage whether they want the
information to be available on the online portal or sent directly to their ERP systems.
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Allowing suppliers to download the information in a format of their choice for

further analysis, payment reconciliation etc. Reporting and Analytics: All ePayment applications offer some degree of reporting capability through standard built-in reporting templates and ad hoc, user-defined custom report creation tools. The wealth of information gleaned from the procure-to-pay process can not only be used to comply with regulatory requirements but also to provide valuable business intelligence for strategic spend analysis. More robust applications can deliver further functionality around:
Printing and exporting reports into multiple formats, including Adobe Acrobat
(.pdf), Microsoft Word (.doc), Microsoft Excel (.xls), Rich Text Format (.rtf) etc. and time stamps.
Comprehensive audit trails of all actions taken within the system with date Payment scheduling to automatically generate or email reports based on
specific time periods or event triggers.
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American Express Overview

American Express has proven its commitment to the electronic payments market and has developed a leadership position over its 160 year history. The company entered the corporate payments market more than 40 years ago and has been innovating since. Payments and expense management are the companys core business, enabling it to be singularly focused on solving its clients payments needs. As its clients payment needs have expanded, American Express has responded by launching innovative payment programs and introducing a host of solutions through partnerships and acquisitions. Todays payment solutions are targeted at reducing costs, improving working capital, leveraging existing technology investments and workflows, and improving spend management control for its corporate customers and their suppliers. American Express serves more than 60 percent of the U.S. Fortune 500, and its expense and payment management experience spans organizations of all sizes and in virtually every industry.
Company Name American Express http://corp.americanexpress.com/corporate 1850 New York, New York 60,000 B2B.Payments@aexp.com Corporate Card, Corporate Purchasing Cards, vPayment and Buyer Initiated Payments
Solution Profile
Table 6
AMERICAN EXPRESS COMPANY AND SOLUTION INFORMATION
Website Founded Headquarters Number of Employees Sales Contact Solution Name
American Express Corporate Payments Solutions
American Express has a portfolio of payment products, including Corporate Card and Corporate Purchasing Cards, vPayment and Buyer Initiated Payment accounts, which service the needs of corporate enterprises. American Express Corporate Purchasing Card The American Express Corporate Purchasing Card provides the control, efficiency, and transparency companies need to manage spend on ad hoc and routine expenses to achieve greater savings. Configurable settings on the Corporate Purchasing Card provide sophisticated controls that dovetail with a companys unique processes and help streamline payables processing for all types of commodities. This flexible and valuable solutionavailable in 27 markets globally:
Improves control by setting Cardmember limits at the industry, commodity,

supplier, and transaction levels.
Achieves greater efficiency by eliminating paper invoices and checks. Leverages enhanced reporting and reconciliation tools to improve contract
and policy compliance, manage suppliers, and consolidate vendors. American Express vPayment The American Express vPayment solution is designed to automatically assign a unique virtual account number from a pre-defined pool to each buyer-approved transaction. Each unique virtual account is configured at the time of request to
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Solution Profile
control authorization parameters including validity date ranges and specific dollar amounts. Downstream reconciliation of card charges with purchase orders, goods receipt or invoices is simple and automated owing to the products ability to capture key transaction data at the time of the account number request. vPayment is easy to use for both buyers and suppliers since it is accepted anywhere American Express Cards are accepted around the world. Following are some of the key features of the vPayment solution: Integration: Disbursing clients have the flexibility to integrate vPayment at multiple points within their procure-to-pay process. A unique vPayment account can be seamlessly requested on the back of saving a purchase order, receiving goods or posting an approved invoice. Adding vPayment to existing workflows is easy but customers can also opt for a stand alone, ondemand, Web-hosted vPayment solution. This latter solution is often used by customers to eliminate costly check replacement programs. Deploying vPayment places no additional integration burden on the supplier, who on condition of being an American Express supplier can process charges the same way it does today. Supplier Management: Because vPayment works with any supplier that accepts American Express, clients can use vPayment across a network of millions of suppliers around the globe. Where suppliers are not enabled, customers have the added benefit of American Express commitment to ongoing merchant enrollment. Payment Workflow: vPayments role in the procure-to-pay process begins after the approval of a transaction. The approval to settle a payment (e.g. approved purchase order, satisfactory receipt of goods or services, approved invoice) is driven by an organizations processes and policies. vPayment is designed to take a settlement approval and assign it a unique virtual account number bound by a validity date and a dollar amount. Once delivered to the supplier, the supplier is able to charge the account number, like any other card, within the boundaries of the agreed settlement parameters. On the back-end, the customer receives notification of the charge and is able to leverage the pre-authorization parameters to effect a hands-free reconciliation of the charge to the original settlement approval, be it an approved purchase order, a satisfactory receipt of goods/ services, or an approved invoice. Security: The technology offers buyers control over the payment process by allowing them to match the parameters of a vPayment account with those of a particular approved transaction within their ERP, thereby adding a further layer of security against fraud. This provides a greater degree of security than ghost cards as it precludes suppliers from charging more than the amount pre-authorized. Once used, the pre-authorization request expires and cannot be used until the account number is returned to the account pool. Working Capital Management: vPayments value proposition lies in its flexibility, in that it offers the control of a check, the float of a purchasing card and the efficiency of electronic funds transfer (EFT). American Express Buyer Initiated Payment (BIP) Buyer Initiated Payment (BIP) is an automated, Web-based solution that enables an organization to increase electronic payments to suppliers. Clients that choose BIP have the flexibility of choosing between multiple settlement methods, including virtual card payment account, ACH, or wire. Following are some of the key features of the BIP solution: Integration: The solution does not require any additional hardware or software to
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be installed on the client side. BIP connects to any ERP or back-end accounting system. The ease of use of the solution also ensures that users do not require extensive training to start using the platform. Supplier Management: Due to the companys long-standing, direct relationships with millions of merchants, American Express is able to manage the end-to-end enrollment process for 100 percent of targeted suppliers. American Express provides a dedicated supplier enablement team to help with enrollment strategy, maximizing adoption, and ongoing support. Payment Workflow: The BIP solution allows clients to maintain their existing procurement and invoicing workflow processes. After invoices have been approved, the buying organization carries out a payment run, like it would to produce an ACH or a check file and sends a standard payment instruction file to American Express for payment execution. The solution is designed to ensure buyers have complete control over the exact date, amount and payment method, which will be used to settle outstanding invoices with each and every supplier. Security: BIP provides clients with the efficiency of electronic payments, while at the same time delivering additional security by eliminating the need to exchange card account numbers with suppliers. Instead virtual card numbers are housed within the American Express payment portal, limiting the amount of sensitive information that needs to be shared via email, fax, or paper documents. Access to the payment portal is also secure, requiring users to have a valid ID and password. Working Capital: BIP can help a company take the next step in improving its working capital by extending its days payable outstanding (DPO). The DPO extension is driven by the float benefits associated with a card program. American Express pays the supplier immediately thereby giving it a payment acceleration, while the cardholder only pays American Express on the agreed terms after the monthly card statement. American Express Reporting and Analytics American Express reporting and analytics tools are configured to the buyers needs based on the solution(s) implemented. American Express provides a full suite of standard reports and provides customers with the ability to create customized reports with full interactive functionality to query, filter, and sort spending data as needed. The tools provide access to market-level or global spending information with transaction-level data from over 120 countries and summary-level data from 39 countries. Buyers can choose to access standard reports (authorizations, declines, transaction data, etc.) for each American Express solution separately (e.g., Buyer Initiated Payments or Corporate Purchasing Card) or in a consolidated fashion across all of the commercial card solutions. Reports are available in Adobe Acrobat PDF format or can be downloaded into Microsoft Excel. American Express Implementation and Support American Express has a strong track record of deploying solutions in the marketplace and leverages its extensive resources to work with customers on identifying optimal implementation plans. Implementation of American Express solutions are based on the unique needs, processes, and systems of each client. The more integrated solutions can typically be implemented in 8-10 weeks. To ensure a smooth transition and drive rapid adoption of solutions, American Express provides tailored training to both its customers and its suppliers.
Solution Profile
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Bottomline Technologies Overview

Bottomline Technologies (NASDAQ: EPAY) provides collaborative payment, invoice, and document automation solutions to corporations, financial institutions, and banks around the world. The companys solutions are used to automate and manage processes involving payments, invoicing, global cash management, supply chain finance, and transactional documents. Organizations trust these solutions to meet their needs for cost reduction, competitive differentiation, and optimization of working capital. The company has more than 9,000 global customers, with offices in North America, EMEA and Asia-Pacific. Bank of America purchased Fleet in 2004 and operated the PayMode service until September of 2009 when Bottomline Technologies acquired the product from Bank of America. Through the PayMode acquisition, Bottomline Technologies has been able to complete its order-to-pay offerings by integrating the Bottomline Business eXchange (BBX) and PayMode platforms. Bottomline will continue expansion of the product offering by presenting next-generation solutions for fully integrated payables automation, including expansion of its global capabilities in both payments and invoicing. PayMode is a SAAS offering and is marketed and sold by Bottomlines Corporate solutions group across all vertical markets. Additionally, Bottomline has a key strategic relationship with Bank of America who sells the solutions to its Treasury clients.
Solution Profile
Company Name
Bottomline Technologies www.bottomline.com 1989 Portsmouth, NH 725 info@bottomline.com 1-800-472-1321 PayMode
Table 7
AMERICAN EXPRESS COMPANY AND SOLUTION INFORMATION
Website Founded Headquarters Number of Employees Sales Contact Solution Name
Bottomline Technologies PayMode
PayMode is a business-to-business electronic invoice and payment network of more than 90,000 active, authenticated suppliers. The PayMode solution supports a number of electronic payment methods, including ACH, card and Wire transactions. If the client chooses, payments can also be made via checks. By transforming paper (invoices and checks) into electronic transactions, PayMode reduces processing costs and extends cash flow benefits.
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Following are some of the key features of the PayMode solution: Integration: PayMode is able to integrate with all ERP and AP automation systems. A few major systems that the solution has been integrated with to date include SAP, Oracle, JD Edwards, Lawson, GEAC, PeopleSoft, Banner, Elite, Solomon, Great Plains, AMS and McKesson. PayMode has also been successful in integrating with a number of homegrown and legacy systems. Supplier Management: Enrollment in the PayMode network is free to the supplier. Bottomline Technologies provides professional services that include technical integration of clients payment applications to PayMode, and development of a custom set of direct marketing and enrollment services for the purpose of rapidly and efficiently enrolling suppliers in the PayMode electronic payment network. The key success factor in the PayMode network, which today boasts more than 90,000 suppliers and a growth rate of 46 percent for 2009, has been its ease of use and the flexibility of the product platform. This ease of use also translates to high rates of conversion once suppliers are enrolled. Within 12-16 weeks of beginning the vendor marketing campaigns, clients typically see between 50 to 70 percent of their suppliers successfully receiving ePayments via the network. Security Measures: PayMode incorporates a number of security features including:
Solution Profile
Digital signatures and certificates with 2048-bit encryption; User access controls including password best practices and functionalitybased privileges;
Multi-approval payment workflow utilizing digital certifications; Additional levels of database encryption for confidential data types
(passwords, card, bank account, SSN, etc.); attempts, lockouts, alerts, etc.);
Controls established for web portal user account log-in (repeated Multi-tiered authentication of all enrollments including bank account
verification, signer authority, company validation, and OFAC checking.
Payment Workflow: Incoming invoices are routed to defined approval groups for decision. General Ledger coding can be applied based on client-defined rules for each approval group. PO matching and PO flip are also offered as client options. Additionally, discount options are offered to both the supplier and the buyer. Once approved, the invoices are integrated into the clients ERP application for payables processing. Once the payables process is complete, payment instructions are passed back to PayMode for settlement. PayMode offers several options for clients to manage audit and/or financial payment controls within the application. There are multiple levels of approvals that can be applied at the file or payment level. Payments are processed only after the full approval process has been completed. Clients have the ability to review, approve, or reject files and/or payments. Financial limits can also be set to forewarn the client when payment instruction files have been received that exceed normal processing amounts. Once approval has been provided, payments are processed and notification is sent to the supplier.
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Solution Profile
Working Capital Management: The current PayMode offering includes dynamic discount capabilities. A planned expansion to include Supply Chain Financing will be completed later this Spring. Further, Bottomlines full invoice-to-payment service provides better working capital management and more efficient terms management, as well as greater visibility into the order-to-pay process. Remittance Information: Unlike traditional ACH restrictions for remittance detail, there is absolutely no limit to the amount of data that can be linked to a PayMode payment. Bottomline works with suppliers to deliver data in the precise format required, allowing them to post and reconcile the payment quickly and accurately. Options include online reports, online downloads such as XML, .csv, .xls, BAIV2, and EDI 835, CCD+ and CTX for ACH, as well as proprietary receivables output files. Dispute Management: The solution delivers a collaborative interface to expedite dispute resolution between buyers and suppliers. Discussion threads allow buyers and sellers to exchange information when an incoming invoice needs repair (dispute) or needs to be resubmitted (reject). Email and online messaging tools are offered to facilitate the dialogue. Reporting and Analytics: The PayMode solution comes bundled with a robust reporting module. There are more than 20 standard reports, available to any user of the PayMode service, based on their granted privileges for report viewing. Further, users have the ability to generate custom reports by filtering on unique search requirements each time they access the PayMode online reports. Reports can be printed as .pdf, or downloaded in a number of different formats (.xml, .csv, excel, BAIV2, EDI 835). Implementation and Support: An average PayMode implementation is 3060 business days. A key success component of the PayMode implementation process is the ease of use for the client. PayMode does not require specific file formats; it accepts virtually all native file formats and provides a file translation service to ensure limited IT resource requirements by the client. Additionally, Bottomline provides complete supplier on-boarding services to ensure successful adoption, including handling of any file formats the supplier may require for delivery of remittance data. The baseline PayMode service consists of a professional service engagement that addresses the clients total invoice and payment needs. Additionally, Bottomline Implementation Specialists work with clients to understand their existing AP processes and ensure maximum utilization of the features within PayMode - all with minimal impact to daily AP processes/controls. At the end of the implementation, a User Acceptance Test is executed and online training is conducted for all users of the service who were not part of the implementation project team. Online help is also available after implementation along with live customer support. P-Card Solution Functionality: PayMode accepts and processes downstream to the card processing platform used by its clients. The features and functionality of the particular card offering would be specific to the financial institution that supports the clients card services.
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Case Study: State of Mississippi

State of Mississippi is a PayMode customer sold through the Bank of America Merrill Lynch channel. The Client: The State of Mississippis Department of Finance and Administration (DFA) helps the Governor, State agencies and the State Legislature provide effective, efficient and fiscally sound government to the citizens of Mississippi. The agency has overall management responsibility for the States $11.2 billion in annual disbursements to over 30,000 business and government payees. The Requirement: Operating as the central disbursement authority for over 125 state agencies, DFAs mission and organizational culture promotes continual improvement in operational efficiencies and cost reduction. Having identified paper processing as a source of inefficiency, DFA wanted to reduce the amount of paper involved in its disbursement process much of it stemming from the use of paper checks and remittance documents. Additionally, DFAs Electronic Funds Transfer (EFT) platform was not adequately supporting the amount or complexity of remittance information associated with payments. In addition to the need to convert a paper-based payment process to a more streamlined electronic process, DFA identified other important requirements:
Case Study
Through PayMode, the State of Mississippi implemented a state-of-the-art electronic payment and remittance system without the headaches or overhead involved in the implementation of an ERP. The staff has been exceptional. Every time we need or question something, they immediately bring the folks who can get it done to the table and just get it done. Cille Litchfield, Deputy Executive Director, Mississippi Department of Finance and Administration
Ensure that up-stream State agencies could continue to manage their
relationships with the States 30,000+ business and government payees vendors, suppliers, service providers and Mississippi- domiciled municipalities without disruption. requiring changes to their existing bank accounts or internal processes.
Allow State payees of all sizes to accept electronic payments, without
Maintain the States existing banking relationships in Mississippi. Enable their existing Statewide Automated Accounting System (SAAS) to
initiate electronic payment requests and send remittance information without requiring a significant technology investment or system changes. dedicating resources to the process.
Solicit and encourage State payees to accept electronic payments without Implement a solution quickly and inexpensively. Use a HIPAA-compliant payment solution.
The Situation: Invoices are processed and approved for payment by each State of Mississippi agency, and associated remittance information is forwarded to DFA for centralized disbursement processing. Payments are made in both check and ACH formats. Payment information is made accessible to the agencies since each maintains its own relationships with the States vendors. The Solution: DFA conducted a search for an electronic payment solution. After learning about PayMode, DFA found an answer to its electronic payment needs. PayMode provided DFA the following benefits and features:
A proven alternative to paper-based processing. Experience with state and municipal implementations. Bank neutral processing for both the State and its vendors.
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Electronic Payments
An ability to quickly integrate with the States accounting system and

workflow. program.
Broadly accepted by vendors and a proven vendor marketing and acquisition Real-time reporting of both in-process and settled payments. Sophisticated security and cost-effectiveness. Outstanding references from public and private sector customers with whom
the State could validate all of the above. The Implementation: SAAS Integration DFAs existing disbursement workflow was documented and SAAS was configured to generate a PayMode payment file. The file, which is regularly created during the DFAs pay run, consists of both payment and remittance information. In order to capture remittance information from up-stream State agencies, additional integrations were completed with multiple billing systems resident within the agencies. This also provided up-stream agencies with a real-time view into their payments, as well as the ability to track payment history. Vendor Sign-Up The PayMode Accelerated Enrollment Program was used to rapidly sign up State payees in PayMode to receive payments and remittances electronically. A tiered program was created to incrementally target various types of State payees. The first group to be targeted included Mississippi-domiciled municipalities and educational institutions and those vendors receiving EFT payments. The second tier of targeted vendors included those related to the States technology and general expense categories. Finally, agency-specific vendors were targeted, such as those of the Mississippi Department of Transportation, as well as medical payments that required compliance with standards set forth in the Health Insurance Portability and Accountability Act (HIPAA).
Case Study
With PayMode, the State of Mississippi benefits from: Lower State disbursement costs. More efficient and effective interagency remittance processing. Significant decrease in paper. Positioning as leader among U.S. states in financial management.
The Results: DFA was set up to electronically disburse payments, along with associated remittance information, to State vendors, suppliers, service providers and municipalities within its existing A/P system environment and process. This work was completed over a period of eight weeks. DFA and the other agencies experienced no disruption to their ongoing operations. Additional integration work was completed at later dates as incremental State agencies aligned with the States PayMode program. Vendors representing over 58 percent of the State of Mississippis annual disbursement dollars and 70 percent of the payment transactions are presently enrolled with PayMode, significantly reducing the amount of paper involved in the States process. Additionally, the less efficient EFT process originally in place was virtually eliminated. State payments continue to be captured as more State vendors are solicited and enrolled. Today over 20,000 payees are currently receiving electronic payments from the State using PayMode. With a successful electronic payment program in place the State has expanded their use of PayMode to receive invoices electronically from their strategic vendors. In addition to receiving invoices, PayMode Invoice Management facilitates matching invoices to purchase orders and routing invoices to authorized users for approval. The vendors have the flexibility to submit invoices in multiple formats and access online reporting tools to gain visibility into the status of their invoices. This solution augments the existing payment program to achieve straight-through processing and further reduces the paper in States processes.
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Electronic Payments
J.P. Morgan Overview

J.P. Morgan is a leading global financial services firm with assets of $2 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. J.P. Morgan serves millions of consumers in the United States and many of the worlds most prominent corporate, institutional and government clients under its J.P. Morgan, Chase, and Washington Mutual brands. The Treasury Services business of J.P. Morgan is a full-service provider of innovative payment, collection, liquidity and investment management, trade finance, commercial card and information solutions. These solutions are utilized by large corporations, financial services institutions, middle market companies, small businesses, governments and municipalities worldwide. With more than 50,000 clients and a presence in 39 countries, J.P. Morgan Treasury Services is one of the worlds largest providers of treasury management services and a division of J.P. Morgan Chase Bank, N.A., member FDIC. More information can be found at www.jpmorgan.com/ts. J.P. Morgan has provided electronic payment solutions to clients since 1972. It has led the industry in ACH originations for a record 34 years in a row, since the inception of the network. J.P. Morgan has offered p-card based solutions for over 2 decades and has been in the EIPP space since 2001. J.P. Morgan acquired Xign Corporation in May 2007.
Company Name J.P. Morgan www.jpmorgan.com/ordertopay New York, New York 220,000 jpmx.salesinfo@jpmchase.com (877) 944-6877 Order-to-Pay and Total Settlement 125+ Buyers and 85,000+ Suppliers on Order-to-Pay Network
Solution Profile
Table 8
J.P. MORGAN COMPANY AND SOLUTION INFORMATION
Website Headquarters Number of Employees Sales Contact Solution Name Number of Customers
Order-to-Pay & Total SettlementSM
J.P. Morgans Order-to-Pay Service delivers comprehensive, on-demand capabilities for the automation of accounts payable processes and the optimization of working capital. The solution delivers robust functionality around purchase order delivery, invoice and payment processing, and discount management by connecting buyers with their suppliers across a secure settlement network. The service provides both buyers and suppliers access through common Web-based portals, affording a single point of interaction with all of their trading partners. The J.P. Morgan Supplier Services organization helps clients target, recruit and onboard new suppliers.
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Electronic Payments
Following are some of the key features of the Order-to-Pay solution: Integration: Order-to-Pay can both send and receive data files in a variety of file formats. It seamlessly integrates with most ERP and financial systems such as SAP, Oracle, PeopleSoft, JD Edwards, and Lawson. Supplier Management: J.P. Morgan has over 85,000 suppliers enrolled on the Order-to-Pay supplier network. In addition, J.P. Morgan offers full service supplier segmentation and recruitment capabilities, which are utilized by buyers to determine which suppliers to recruit and for ongoing campaign management. Order-to-Pay offers several solutions, which can be utilized to assist in meeting the very dynamic needs of a customers supplier base. The company has a Supplier Services Team, which can be leveraged by Order-to-Pay clients to penetrate their targeted suppliers, discuss features and how the services will benefit their organization. Security Measures: Order-to-Pay incorporates best-in-class security that is SAS70 compliant. At a minimum, all user connections are made over secure links using SSLv3 and 128-bit encryption. J.P. Morgan utilizes X.509 industry standard PKI (public key infrastructure) technology to verify users and transactions, as well as communications are digitally signed using a 1024 bit signature key and encrypted using 3DES and occur over https protocol. Working Capital Management: The Order-to-Pay solution can help clients manage working capital in a variety of ways. As per J.P. Morgan, its current customers report that over 40 percent of their invoice volume and over 20 percent of spend is now earning discounts, with an average discount rate of 1.6 percent and an APR of 36 percent, all while maintaining an average DPO of 35 days. Remittance information: The Order-to-Pay solution delivers detailed remittance data to the supplier along with each payment. Remittance is available via the Web-based portal, via email and/or interfaced to the supplier systems using industry standard file formats (e.g. 820). Dispute Management: The Order-to-Pay solution allows for workflow based online dispute management as well as customer service initiated dispute management. It also provides self-service capabilities such as payment status inquiry, stop payments, check images, p-card transaction reporting, etc. Reporting & Analytics: The solution provides over 60 standard reports, as well as an ad-hoc reporting tool that allows buyers to create and export reports based on their specific needs. In addition, buyers have the ability to monitor supplier enrollment and compliance, monthly accruals, on-time payments, and order/ invoice/receipt/payment reconciliation through standard reports. Suppliers have a dashboard including an aging summary, early payment opportunities, and a collections forecast as performance indicators and improvement opportunities. In addition to Order-to-Pay, J.P. Morgan offers a solution called Total SettlementSM that allows clients to process ACH, commercial card, check and wire payments via a single interface. This is a robust payment automation solution that includes Web-based portals for the buyer and supplier as well as detailed remittance delivery along with supplier enablement and support. Implementation and Support: The average implementation time for an electronic payments solution is 45 days; the length of the implementation is based on the functionality being deployed. High level overviews, on-site kickoffs, dedicated Implementation Program Managers and Technical Consultants, as
Solution Profile
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Electronic Payments
well as product support is available to customers. User guides are leveraged throughout the training/implementation process. Clients are also trained on the J.P. Morgan Product Support process when implementation is complete. J.P. Morgan has launched a Rapid Deployment solution that facilitates quick client on-boarding via a simplified Web-based implementation process that does not require deep technical expertise. P-Card Solution Functionality: J.P. Morgan provides all flavors of commercial card solutions - one card, p-cards, corporate/T&E cards, fleet, payroll, debit, single use account, ghost and, AP-cards. Following are some key features related to commercial cards: Tools: J.P. Morgans suite of products provides real-time access to online reconciliation, customized reporting, accounts payable process automation, and e-commerce applications via Web-based portals. Management, administrators, and other authorized personnel can use the reports to monitor spending limits and track spending history. Administrators can make changes to most controls and limits (such as cash advance amounts, credit limits, and velocity controls) online, in real time. Reports: Methods of reporting include a Web-based user interface for electronic reporting and the ability to export data from the system through customizable file feeds. All data elements associated with the order/invoice (such as purchase order number, invoice number and accounting distributions) are available for reporting both in standard and ad-hoc form. Integration: J.P. Morgan can automatically attach default accounting codes to each transaction based on employee, hierarchy, merchant, and MCC, account, or customer code. Reclassification and split capabilities are also available. Data available via J.P. Morgans systems can be used to generate reports, or can be provided directly to the clients general ledgers or ERP systems in a format that matches their requirements. J.P. Morgan has integrated p-cards with all the major ERP providers as well as other legacy accounting/financial systems. Controls: J.P. Morgans commercial card program offers numerous standard card controls, as well as key features such as full hierarchy support, real-time adjustments of spending controls online, and denial at the point of sale for transactions that do not meet a clients specified requirements. The program administrator can establish dollar, merchant category code (MCC), transaction, and cash advance limits at any level of the clients hierarchy: by individual, department, or for the entire organization.
Solution Profile
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Electronic Payments
TradeCard Overview
TradeCard is headquartered in New York City with offices in San Francisco, Hong Kong, Brussels, Taipei, Seoul, Colombo, and Shenzhen. Since being founded by the World Trade Center Association in 1995, TradeCard has gained significant market traction with its clients, enabling them to realize sizeable savings in their supply chain processes through reduced cost of goods, improved working capital and increased visibility for themselves and their trading partners. TradeCard is a global platform that connects buyers, sellers and service providers in a hosted software network. Customers automate transactions from purchase orders to payments and charge backs and benefit from online financial services integrated into the workflow. Automated transaction management enables buyers and sellers to improve margins and cash flow while gaining supply chain visibility. Financial institutions benefit by offering more services in the supply chain. TradeCards global support team ensures customers are up and running quickly and easily. Companies such as Dicks Sporting Goods, Stride Rite, Under Armour, and Columbia Sportswear use TradeCard to automate all supply chain processes from order through settlement. According to TradeCard, its customers get substantial savings in multiple ways: efficiency savings by eliminating paper and automating processes, working capital savings by extending terms with vendors, cost of goods savings through early payment discount programs, and bank line savings by eliminating letters of credit.
Company Name TradeCard http://www.tradecard.com New York, New York 1995 190 5,000 TradeCard Esther Lutz ELUTZ@tradecard.com; (646) 549 5060
Solution Profile
Table 9
TRADECARD COMPANY AND SOLUTION INFORMATION
Website Headquarters Founded Number of Employees Number of Customers Solution Name Sales Contact
TradeCard Platform
The TradeCard Platform was introduced in 1999 to simplify international trade and enable secure transactions through the Internet in an electronic, automated environment. Buyers, suppliers, financial institutions and other service providers are among TradeCards 5,000 customers. The TradeCard Platform is delivered via s Software-as-a-Service (SaaS) model and new releases of the platform are easily rolled out twice per year. The TradeCard Platform continues to grow to deliver a bank-neutral trade network that automates financial and physical aspects of the supply chain.
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Electronic Payments
Solution Profile
TradeCard utilizes J.P. Morgan Chase and Citi to process electronic payments. When payments are processed, TradeCard receives a payment confirmation number, which is provided to the buyer and supplier to reconcile their payments. When an invoice is approved for payment, the TradeCard system creates and schedules the payment based on the date specified by the buyer or a date calculated by TradeCard based upon the payment terms agreed upon by the buyer and the supplier. The payment contains all of the necessary information to process the payment (including bank accounts and routing instructions) as stored on the members profile, and can be warehoused until the payment due date. There are at least two sets of payment instructions per transaction (one to debit the buyer and the second to credit the supplier). On the appropriate date (value date or day(s) prior, depending on the form of payment), the TradeCard system will transmit the payment instruction to the settlement financial institution to debit the buyer. The financial institution sends payment acknowledgements and confirmations to TradeCard electronically, automatically updating the TradeCard system. Upon confirmation that funds have been received from the buyer, the system automatically schedules the transmission of the payment instruction to credit the supplier and transmits the instruction to the financial institution. The processing of the supplier payment by the financial institution is electronically communicated back to TradeCard, which automatically confirms the payment to the supplier. Following are some of the key features of TradeCard solution: Integration: TradeCard is ERP agnostic and can communicate with any in-house system, whether it is a standardized ERP system or a home-grown legacy system. TradeCard currently integrates with and complements ERP and supply chain investments for current customers that run SAP, Oracle, Lawson, i2, Manugistics, Manhattan Associates, Blue Cherry, Essentus, and many smaller and legacy solutions. TradeCard extends the functionality of in-house systems beyond its customers four walls. Supplier Management: Suppliers are generally trained in a multi-phased approach depending on the specific process users are required to perform (e.g. sales, shipping, finance, etc). Initial training and orientation are provided during vendor activation and registration seminars organized jointly between buyers and TradeCard. Subsequently each respective supplier user group will receive additional Web-based training to review their specific processes. Suppliers also get assigned a client manager (based on geographic location) that works with them on registration, training and ongoing support. Security Measures: TradeCards security model ensures that information provided to TradeCard is trusted regardless of the technical capability of the provider. Whether information is provided via a secure protocol (AS2, AS3, SFTP/SSH2, HTTPS with client authentication, EDI VAN, or EBMS 3.0) or an unsecured protocol (email, Web browser-based file upload/download, or HTML screens) combined with 2-factor authentication (E-identity), authentication of the information provider is assured. Working Capital Management: Supply chain capital optimization is predicated on TradeCards patented technology that automates information flow between trading partners, integrating financial service providers on demand. A unique aspect of TradeCards programs is that there is no balance sheet impact or administrative overhead. Through the TradeCard Platform, suppliers take advantage of online financial services for payment protection, early payment programs and trade financing. Brands
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Electronic Payments
Solution Profile
and retailers are able to maintain or extend existing terms with suppliers and eliminate the need for credit lines for purchases. Financial institutions gain direct visibility into the transaction through TradeCards automated environment to reduce risk and increase financing opportunities. All parties benefit from process efficiencies, data accuracy and cost savings. Dispute Management: Buyers have the ability to negotiate and resolve discrepancies online via TradeCard with their vendors. Any impact to payment, based upon exception resolution, can be calculated on the Payment Authorization Document, which defines the actual settlement. A buyer can determine if payment should be automatically generated (i.e. auto approved) if no invoice discrepancies are found. TradeCard enables tolerances to be set for price, time and volume discrepancies. Alternatively, buyers can be advised each time a transaction is ready for payment allowing them to review the documents online. Reporting & Analytics: TradeCard provides a standard set of pre-defined reports to assist in the review and management of orders, invoices, and payments. There are approximately 65 standard reports, subdivided into the following categories: Management, Administrative, Payment, and Transactions Report output is generally driven by the role of the transaction party (Buyer, Seller, Agent, etc) executing the report and other predefined filtering criteria. TradeCard users can run their own reports on demand or preset them to run at a specified schedule. Users can download reports from TradeCard in their preferred format (PDF, CSV, Text and HTML file formats are available). Implementation and Support: Average implementation is within 90 days. No hardware or software purchase is needed by customers. No special training or knowledge is needed by IT staff. The main factor determining the length of implementation is the number of parties that need to be connected to the platform. TradeCard assigns a Client Manager (based on geographic location of users) to work with buyer organizations on registration, training, and everyday support issues. As part of the implementation project scope, TradeCard allocates the necessary resources to prepare specific training materials and conducts a number of on-site training sessions at customers main locations and local offices. Training is also tailored to fit specific needs; for instance, using a Trainthe-Trainer model, or training via Web-seminars, etc. Strategic Partnerships: TradeCard has more than 25 financial institution partners on its platform to enable transactions and settlements, including J.P. Morgan Chase and Citi. TradeCard also has strategic partnerships with supply chain and technology partners such as Avery Dennison and Descartes. TradeCards Early Payment Program: TradeCards early payment program (EPP) enables supply chain capital optimization across the supply chain ecosystem. It enables financially weaker partners - typically suppliers - to access capital based upon the buyers typically stronger credit profile, without guarantees, covenants or balance sheet impact to either party. TradeCard is available on a transaction-by-transaction basis, or for a predetermined period. It can be setup to use the funds from the buyer or from a TradeCard financial institution partner.
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Electronic Payments
Vendorin Overview
Vendorin operates a business-to-business network focused on collecting, validating, managing, and facilitating the open but secure sharing of the type of information to which companies need ready and reliable access in order to support increased electronic interactions and improved communications with customers and suppliers. Vendorins solutions were introduced in the market in early 2009, and have seen an enthusiastic reception. Vendorin plans to grow its network quickly by introducing Electronic Payment Enablement Solutions to mid-size and large buyer organizations, both through direct sales and through partnerships. As large organizations adopt Vendorin, their vendors will be recruited to join the Vendorin Network, growing the Network ever faster.
Solution Profile
Company Name
Vendorin, Inc. www.vendorin.com Omaha, Nebraska 25 2007 Darren Blakely, Founder & EVP darren.blakely@vendorin.com Vendorin Network, Vendor Profile Hosting, Electronic Payment Enablement
Table 10
VENDORIN COMPANY AND SOLUTION INFORMATION
Website Headquarters Number of Employees Founded Sales Contact Solution Name
Vendorin Network
Vendorin operates the Vendorin Network and two solutions utilizing the Vendorin Network: Vendor Profile Hosting and Electronic Payment Enablement. All Vendorin solutions are offered via a Software-as-a-Service (SaaS) model and were introduced to the general market in 2009. The Vendorin Network and the Profile Hosting Solution provides an efficient and lowcost method for companies to create an online profile, easily manage and enhance their profile over time, and securely but openly share their profile with selected trading partners in an effort to improve communication efficiency and facilitate increased electronic interactions. The Vendorin Network currently consists of more than 10 million company profiles awaiting activation. As a major component of operating the Vendorin Network and the associated Profile Hosting Solution, the company is committed to facilitating a broad-based and ongoing transition to electronic payments through its Electronic Payment Enablement Solution. This solution provides mid-size and large buyer organizations and their banking partners with the ability to leverage the electronic payment information and remittance delivery preferences contained within profiles hosted on the
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Electronic Payments
Vendorin Network to quickly and easily make the conversion from paying suppliers by check to paying suppliers electronically. Following are some of the key features of the Vendorin solution: Payment Functionality: Vendorins Electronic Payment Enablement Solutions support check, ACH, commercial card and wire transfer for domestic U.S. payments. However, the solution is focused on helping clients make the transition from paying suppliers by check to paying suppliers electronically. Since ACH is the payment method best suited for both the payer and payee in most cases, it is the primary focus in the conversion, but Vendorin also supports a transition to card-based and wire transfer payments. Integration: Vendorin interfaces will all major ERP and AP automation systems. Integrations have been completed with SAP, Oracle, PeopleSoft and others. Vendorin clients typically create a payment file from their ERP system, which is delivered to Vendorin in an automated fashion. Vendorin has the ability to deliver return files to clients, so that the process can be fully automated in the clients ERP system. Implementation & Support: Implementation for Electronic Payment Enablement Solutions is typically completed in 90 days. Vendorins systems and processes are designed to achieve a 90 day implementation time frame for all clients. The implementation can take longer in case the client is unable to meet its milestones. Vendorin assigns a dedicated Client Implementation Manager to each new Electronic Payment Enablement client. The Client Implementation Manager conducts training and implementation assistance in one or more on-site visits. The 90 day implementation process is managed by weekly conference calls conducted by the Client Implementation Manager. Technical assistance is provided by Vendorin as required by the client. User manuals and other training materials are provided during client training. The company offers customer support via phone and email during standard business hours. Training is offered on site as a standard component of the implementation process, and can be repeated on request. Security: Vendorin has incorporated industry leading security measures in its solutions. It conducts regular third-party security audits to ensure ongoing compliance with its IT Security Policy. Some of the audits Vendorin passed in 2009 include SAS 70, multiple source code audits, ISO 27002 information security standard based audits and monthly security vulnerability audits. Supplier Management: The Vendorin Network was introduced to the general market in 2009 and contains thousands of active supplier profiles at this point. There are over 10 million profiles awaiting activation in the Vendorin Network. Vendorin conducts supplier recruitment/on-boarding campaigns for its Electronic Payment Enablement clients. These campaigns are typically focused on ACH credit acceptance by suppliers, but can also be used for card acceptance campaigns. Vendorin utilizes email as well as inbound and outbound phone communication in its attempts to convince suppliers to accept electronic payments. Remittance Information: Vendorin accepts payment files containing remittance information from its Electronic Payment Enablement clients. It will then convert the payment files so that payments can be processed by the bank of the clients
Solution Profile
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Electronic Payments
choice and remittance delivery can be sent to suppliers in their preferred format. Suppliers have a choice between sophisticated remittance formats such as EDI, and more simple formats such as readable remittance delivered by email or fax. Suppliers also have the ability to retrieve historical remittance data by accessing their Vendorin profile. Reporting & Analytics: Vendorins system offers filtered views and advanced search options. It also produces a number of daily, weekly and monthly reports that are available to clients. Vendorin can also provide custom reports for clients and configure the reports to be generated on a schedule. Alternatively, reports can be run on request. Further, Vendorin provides detailed reporting on its supplier enablement campaign during the 90 day implementation campaign. Vendorin guarantees achievement of 75 percent conversion from check to electronic payment of the targeted payments and tracks the progression towards this guarantee during the implementation campaign.
Solution Profile
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Electronic Payments
Case Study: Firestone

The Challenge: Firestone recognized that it could achieve significant cost savings by reducing the number of supplier checks it was initiating in favor of lower cost electronic payments. Greater use of electronic payments would also allow Firestone to integrate its SAP financial system with bank payment systems, take advantage of payment discounts offered by its suppliers more frequently, improve its cash forecasting capabilities, simplify reconciliation, reduce check fraud, and generally improve supplier relationships - particularly with those suppliers who were already requesting that Firestone begin paying them electronically. The Solution: Vendorin delivered on its commitment to convert at least 75 percent of Firestones supplier payments from check to electronic payments - and did it in 90 days. The Vendorin supplier analysis team performed a review of Firestones vendor master file to determine which suppliers were both a good fit for conversion to electronic payments and would deliver the greatest economic impact for Firestone once converted to electronic payments. Once targeted suppliers were selected, the Vendorin supplier marketing team began a six-week Firestone branded supplier outreach effort which included email, inbound and outbound telesales, and a secure website for supplier education and enablement. At the same time, the Vendorin integration team began working with Firestone and its bank to ensure that Firestone would be able to create payment files and the bank would be able to process these payment files by the end of the conversion program. In August 2009, Firestone began processing electronic payments as a result of the Electronic Payment Enablement Program carried out by Vendorin. Firestone is now delivering tens of millions of dollars of supplier payments to nearly 1,500 suppliers each month. Firestones bank is happy to be processing a greater number of electronic payments and Firestones suppliers are happy to be receiving not only their payments electronically but also the remittance information needed to reconcile their payments from Firestone. The Results
Case Study
Vendorin enabled more than 50 percent of targeted suppliers for electronic

payment in less than 90 days. electronic payments.
Integrated SAP financial system with bank payment system to support Eliminated more than 75 percent of supplier checks. Reduced the cost to initiate supplier payments by more than 80 percent.
This project wouldnt have been possible without the technology, supplier outreach services, and market expertise Vendorin delivered. While they focused on communicating with our suppliers and enabling them for electronic payments, we were able to stay focused on doing our jobs without disruption. With the quick implementation, big ROI, and a fast payback, this project really delivered. - Supervisor Cash Management, Firestone Diversified Products
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Electronic Payments
Evaluating ePayments Vendors

While the benefits of electronic payments are undisputed, selecting the right electronic payment vendor is a challenging task. It is critical to analyze what various technology solution providers offer and how the functionality matches with an organizations business needs. This section is helpful in identifying the most appropriate solution provider for your business needs:
Vendor Evaluation
Company Overview
In addition to learning how long a company has been in business, it is helpful to know whether ePayments is a core offering for the company and to understand growth plans and the future vision of the service provider. Ask the following questions:
How long has the company been in business? Since when has it been
offering payment automation solutions?
How many customers does it have, and who are they? How is it funded? If it is a public company, look at the prospectus. How does it plan to grow, and are there any mergers or acquisitions on the
horizon?
How will it manage growth and the resulting increased customer demand on
its systems?
Solution Overview
Ask the following questions:
What type of payment methods does the solution support check, ACH,
commercial cards, and wire transfers? payment types?
Does the solution support a single Web-based interface to process different How does the system interface with ERP and/or AP automation systems? What security measures are incorporated in the solution? Is the solution provider including any additional features and functionality in
the forthcoming versions of the solution? electronic payments?
How does the solution provider work with suppliers reluctant to accept How does the solution support the exchange of remittance information? What payment workflow capabilities are available as part of the solution? What capabilities does the solution offer to facilitate dispute management? Does the solution deliver a shared supplier network and/or portal? If so, how
many suppliers are currently enrolled on the network?
Does the provider offer any value added services designed to increase
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Electronic Payments
supplier adoption?
Does the solution include a reporting module? How many standard reports
are available? What reports are bundled with the solution?
Vendor Evaluation
Can users generate custom reports and save the queries for reuse later? Can data from the solution be downloaded into third party reporting tools like
Crystal Reports for further analysis? to buyers and sellers?
What out-of-the-box payment-related metrics/KPIs does the solution provide

Specifically, with respect to commercial cards, ask the following questions
What are the different types of cards available one card, p-cards,
corporate/T&E cards, fleet, payroll etc? available around ghost cards?
Does the solution support ghost cards? What features and functionality are Does the solution support virtual payment accounts? If so, how many
customers use this functionality?
Describe the tools available to monitor the commercial card program. What What reports are standard? What categories can program administrators What are the different ways in which the provider enables or supports
tools are offered to the cardholder? The commercial card program manager? The controller of the buying organization? isolate and analyze in standard reporting? What tools does the solution offer for ad hoc reports? customers to get Level 2 and 3 data? In case the merchant is not providing Level 2 and 3 data, how does the provider facilitate availability of such information? specific lines in the GL? With which ERP and accounting systems does the solution already have GL interfaces? transaction limits, daily, weekly or monthly limits, merchant category codes, etc.
What services does the provider offer that can link card transactions to What are the different ways in which card usage can be controlled Does the program screen transaction activity for fraud patterns? Does the provider company offer any supplier recruitment/on-boarding
support with the program? How successful has it been in convincing its customers suppliers to accept cards? Are there any specific industry verticals that are targeted for merchant acceptance?
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Electronic Payments
About PayStream Advisors, Inc.

PayStream Advisors is a technology research and consulting firm that improves the way companies plan, evaluate, and select emerging technologies to achieve their business objectives. PayStream Advisors assists clients in sorting through the growing complexities of IT applications related to business process automation with the goal of making objective, analytical, and actionable recommendations. Wherever business process automation technology is an issue, PayStream Advisors is there to help. For more information, call (704) 523-7357 or visit us on the Web at www.paystreamadvisors.com.
PayStream Advisors
About the Analyst
As Research Director, Sush Koka manages PayStream Advisors overall technology research effort. She writes research reports, leads client briefings, and participates in consulting engagements in the purchase-to-pay and order-to-cash functional areas. Her deep experience both as a market analyst and a consultant enables her to analyze trends in financial services automation, assess feasibility of products and drive research activities. Her areas of focus include invoice and payment management, travel and expense management, and business process automation. She has extensively researched and written reports in these areas, and her work has been published in trade magazines such as Supply & Demand Chain Executive and DOCUMENT Magazine.
Online Resources
Free Reports Software Directory Technology Solution Profiles End-User Case Studies
Advisory Services
Assess your current state Develop your business case Create and manage your RFP Review and select the perfect vendor
Search for Accounts Payable Solutions!

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TECHNOLOGY INSIGHTS REPORT

Electronic Payments: Streamline P2P, Reduce Costs

Featuring Profiles on American Express Bottomline Technologies J.P.Morgan TradeCard Vendorin

Electronic Payment Types .......................................................................... 7 ACH Transactions ........................................................................................ 8

Wire Transfers ............................................................................................ 11

When to Use Wires ............................................................................................ 11 Wires Versus ACH Payments ............................................................................ 11

Corporate Purchasing Cards .................................................................. 12

Different Flavors of P-Cards ..................................................................... 15

ePayables Innovations .............................................................................. 17

Evaluating ePayment Vendors ................................................................. 42 About PayStream Advisors, Inc ............................................................... 44

What challenges are organizations facing when it comes to manual

What related developments in the procure-to-pay space are impacting the

2010 PayStream Advisors, Inc.

Case for ePayments Automation

Inefficiencies in Current Process

Manual and Inefficient Processes: The purchase-to-pay process has long

Lack of Cash Flow Visibility: Lack of visibility and uncertainty around

High Cost of Supplier Financing: The above factors primarily pressure

2010 PayStream Advisors, Inc.

Factors Driving Electronic Payments

Factors Driving ePayments

Cost reduction from reduced headcount, lower administrative expenses, and

Reduction in the amount of paper consumed by an organization, especially

Improved visibility into payments and overall spend translating to better

2010 PayStream Advisors, Inc.

Factors Driving ePayments

2010 PayStream Advisors, Inc.

Challenges to Automating the Payment Process

2010 PayStream Advisors, Inc.

2010 PayStream Advisors, Inc.

Electronic Payment Types

2010 PayStream Advisors, Inc.

How does ACH Differ from Card Payments?

Unlike credit card payments, where suppliers have to pay a percentage

Factors Driving ACH Payments

2010 PayStream Advisors, Inc.

Ease of Integration: Almost half the companies surveyed (48 percent)

Benefits of ACH Payments

2010 PayStream Advisors, Inc.

Challenges to the Adoption of ACH

Barriers to ACH Payments

2010 PayStream Advisors, Inc.

Wire Transfer Payments

When are Wires Typically Used?

How do Wires Differ from ACH?

While ACH payments support remittance delivery to suppliers via addenda

2010 PayStream Advisors, Inc.

Corporate Purchasing Cards

Rationale for a P-Card Program

P-Cards Deliver Against their Goals

NON P-CARD/ TRADITIONAL P2P PROCESS

$37.30 16.5 days

$19.70 5.2 days

2010 PayStream Advisors, Inc.

Maturity of P-Card Programs

Challenges to Implementing P-Card Programs

A limit on the number of daily, weekly, or monthly transactionse.g., no more

no more than $250 per day may be charged to restricted cards.

Problem: Loss of Control Over Purchases