Winning vendors over to e-payments

Electronic payment is poised for expansion, with more businesses getting into the game to gain the benefits of reduced costs for payer and payee alike, faster processing, improved transparency and lower risks of fraud and theft. But the B2B industry's migration to an automated environment is cautious at best, despite the undeniable financial and operational gains for all — corporates, vendors and financial institutions. Cheque payments still account for 80 per cent of the total wholesale payment cycle, according to recent research by the Aite Group. The reason? Adopting a new technology requires abolishing familiar, time-tested routines and transforming high-volume processes and the IT resources to support it. The paper suggests how corporates (accounts payable and procurement organisations) can encourage their vendors to implement electronic payment relationships to save money, and how banks and electronic invoicing presentment and payment providers can put e-payments into practice, making the e-payment relationship a win-win proposition for all. In particular, the paper advocates partnerships between corporates and banks to launch campaigns that educate vendors on e-payment migration — with a case study demonstrating the success of such a campaign. The paper closes with a broader outlook on the payment industry as a whole and enumerates some of the capabilities vendors will be looking for in the next generation of electronic payment solutions, such as automated clearing house and wires. It strategically weighs the different electronic payment methods to which they aim to convert their vendors for maximum benefit.