Electronic Invoice Presentment

Transcript Electronic Invoice Presentment

Electronic Payment Systems 20-763 Lecture 10 Electronic Invoice Presentment and Payment

Outline

• Electronic bill (invoice) presentment and payment EBPP (EIPP) • Presentment: displaying notification of debt with details • Service providers • Bill consolidators • System Architecture • Future of ePayments 20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS

Electronic Billing

• U.S. consumers pay 18.2 billion bills per year – Occupies 2.4 billion man-hours • U.S. businesses pay 26 billion bills per year – Generating bills costs USD $20-35 billion per year – Postage costs USD $17 billion • Moore demo , PayNet demo , CheckFree demo , FirstUnion , PayTrust • Santa Clara 999999999, 1234 • Other providers: – Logica, Netscape, TransPoint • Hong Kong: Jetco • Key for customer retention (convenience) COPYRIGHT © 2002 MICHAEL I. SHAMOS 20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002

Savings on $100 Billed Electronically

AMOUNT SAVED

• Reduced non-payments • Reduced processing errors • • Eliminated paper processing • Saved postage • More efficient customer service Total potential savings

0.25

0.10

0.90

0.40

0.10

1.90

FALL 2002

SOURCE: MCKINSEY

What is EIPP?

• • • • • •

Statements or bills rendered in electronic form on Web (1) Multiple bills consolidated at one site (2) Customers visit the site to view their bills (3) Customers review bills and schedule payments (4) Remittance information returned to biller electronically (5) Payments routed from the customer's bank account to the biller’s account (6) SOURCE: VALERIE KRAMER, PNCBANK

DATA PARSING BILL FORMATTING BILLER HOSTING

EIPP Participants

PERSONAL FINANCE SYSTEM, AGGREGATOR, BANK DATA FLOW



BILL INFO PAYMENT ORDERS



MONEY FLOW PAYMENT AND REMITTANCE PROCESSING

20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002

SOURCE: EBILLING.ORG

EBPP Biller Models

Biller SWIFTBILL DEMO Biller Direct Biller Direct with BSP Hosting Biller Service Provider CSP with BSP Hosting Customer Service Provider Biller Hosting with CSP Customer

FALL 2002

SOURCE: VALERIE KRAMER, PNCBANK

Biller Direct Model

• Biller hosts its own site to present bills • Works through a financial institution to reach the settlement system to process payments • Requires payors to visit the biller’s site • Various vendors provide software to assist in internal development 20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS

Biller Service Providers (BSPs)

• Acts as agent for billers • Technically enables electronic invoice presentment • Warehouses invoice data • Payment and remittance processing • Players: – some banks – EDS , IBS (Interactive Business Systems) – – – CheckFree BlueGill Paytrust , Transpoint FALL 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS 20-763 ELECTRONIC PAYMENT SYSTEMS

Consolidator Model

• Bills from multiple billers are presented on a consolidated site • Site can be hosted by a financial institution or third party • Benefit to payer is one-stop bill payment • Key to success is critical mass of billers 20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS

Thick versus Thin Consolidators

Biller #1 Billing Appl.

Biller #2 Billing Appl.

Bill Data Bill Data Conso lidator’s Web Page

Thick data consolidated

Biller #1 Billing Appl.

Summary Data Biller #1’s Web Page

Thin -

URL link for detail Conso lidator’s Web Page

links to Biller’s site

20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002

SOURCE: VALERIE KRAMER, PNCBANK

EIPP Issues

• Retain familiar bill format • Information extraction • Bill presentation • Personalization – understanding customer bill review and payment habits • Settlement mechanism 20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS

Bill Extraction & Conversion Internet Bill Presentation

The e-Billing Process



Connect to biller legacy systems



Extract bill data



Convert to Web output formats



Integrate with third party systems and databases



Provide access to bills on biller’s Web site



Provide access to bills on consolidator Web sites Internet Bill Payment



Facilitate credit card and direct debit payments



Process payments and post to customer and biller accounts Internet Customer Care



Provide customer account management



Facilitate 1:1 marketing and e-commerce programs



Integrate bill analysis tools and applications

20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002

SOURCE: LOGNET

BillMiner Architecture

Management System* Customer Query System User Enrollment System Legacy System Biller Application Data Stream Conversion Module Semantic Analyzer Bill Database Presentation Engine Auditing & Licensing Advanced Features Module Accounts Receivable System Payment System BillMiner System

20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002

Consolidator System Internet

End -User

SOURCE: LOGNET

Integrating Payments with Upstream Processes

Buyer Seller Purchasing Dept.

Purch Order PO No.

Sales Dept.

Receiving Dept.

Ship & Invoice PO No.

Invoice No.

Shipping & Invoicing Dept.

Accounts Payable AOP, Payment Invoice No.

Payment No.

Accounts Receivable SOURCE: COMMERCENET

EIPP Projections

SOURCE: KILLEN & ASSOCIATES

Customer Interface

• Designing electronic bills – Typically varies from paper – Input from marketing – Requires internet expertise – May require regulatory approval – Possible legal issues – Advertising • Enrollment process…on-line is best!

• Requires a fully structured and integrated customer service model FALL 2002

SOURCE: VALERIE KRAMER, PNCBANK

ILLUMINATED STATEMENT SOURCE: ENCIRQ

Encirq Preference Model

20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002

SOURCE: ENCIRQ

Paytrust

Statements, Billing & Reporting in Banking

（银行服务的对帐单、帐单和报告处理）



Account Statements

（对帐单） 

Fixed Deposit Statements

（定期存款对帐单） 

Loan Accounts

（贷款对帐单） 

Credit Card Bills

（信用卡对帐单） 

Merchant Statements

（贸易商对帐单） 

Mutual Fund Statements

（共有基金对帐单） 

Securities Statements

（债券对帐单） 

Branch Reports

（分公司报告） 

Statutory Reports

（法定报告）

SOURCE: CHECKFREE Corporate Customers

（企业客户）

Consumers

（私人客户）

Merchants

（贸易商）

Branch Managers

（分公司经理）

Management

（管理层）

Regulators

（法定管理者）

Tradelink’s E-Commerce Flow

Air Terminals ECIC Insurers Govt Depts US Customs Banks Establish Market Channel

Info Services

Tradelink & Partners

Negotiate Contract

Export Credit Insurance Declaration Prepare Products Arrange Logistics

Production Notification

Certificate of Origin

Carrier Notification Comply with Regulations

-Textile Quota Licenses -Electronic Visa Copy -Trade Declaration

Settle Payment

Quotation#

Purchase Order#

-Outward Processing Arrangements** -Cross Border Documentation** -Shipping Order* -Packing List# -Bill of Lading / -Dutiable Commodity Permit* -Manifest* Forwarder Cargo -TTRS Notification* Receipt** Manufacturer’s Declaration** -Commercial Invoice# -Packing List# -Insurance Certificate# -Proof of Delivery#

Trade Card / CIECC / Pan-Asia E-Commerce Alliance / PortsNPortals Overseas Buyers Sellers HK Traders China Traders & Manufacturers Container Terminals Carriers Forwarders * Confirmed development schedule (with Government / other service providers) ** Under scoping / consideration # TradeCard Services SOURCE: TRADELINK

EIPP Status

• Only 3 countries with widespread offering – US, Canada, Australia • Others – small scale or coming – Scandinavia, NZ, UK, Hong Kong, Switzerland • All are finding EIPP is complex – Scale- and/or partner- dependent 20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS

EIPP Major Ideas

• EIPP is data-rich – Interactive bill detail, challenge, resolution • EIPP is complex – Interaction with legacy accounting systems, data interchange • EIPP requires service providers – Biller service provider – Customer service provider • Are bills necessary?

Future of Electronic Payments

Money Supply Chain and Value Chain

• Where does it come from?

• More electronic flow • Role of banks?

– Can money be transferred without banks?

• Financial intermediaries • Banks, insurance companies, stores, stockbrokers • Agents (sports figures have them because they’re rich) – all vying to park your money • Increasingly, payment will be viewed as part of the supply chain. (Just one more piece of data.) FALL 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS 20-763 ELECTRONIC PAYMENT SYSTEMS

Role of Cash

• Will never vanish – Portability – Offline use – Authorized by government • Increasingly useless – Risk of theft – Not sufficiently liquid! (Must deposit in bank. How?) • Role of stored value cards 20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS

eCash

• Where does the technology stand?

• Security • Anonymity, pseudonymity, privacy – Rivest: anonymity may be a value-added feature • Double spending – Chaum’s protocol – Does not work completely offline • Not for large transactions – Possibility of detection not a deterrent • Outside the banking and Federal reserve system • Decline in importance of offline transactions FALL 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS 20-763 ELECTRONIC PAYMENT SYSTEMS

Ubiquitous Computing

• Limitations on processor speed/size • Solution: more processors • Computers in walls, desks, cars • Seamless movement of money (e.g. EZ Pass) • Will money exist in several forms?

– Accounts, e-scrip, cash, e-cash?

Checking

• Holdover from paper processing system • Future view : check is just a type of payment order for moving notational money • More research needed on clearing and settlement systems • Instantaneous clearance & settlement. Why not?

Micropayments

• Transaction cost vs. transaction value • Rivest prediction: method of choice for purchase of information over the Internet • Aggregation • Digital rights management • Hierarchical approach – Aggregate amounts < .01 cent until they reach 1 cent – Aggregate pennies until they reach dollars, etc .

Microcredit

• Small loans in underdeveloped nations (e.g. < $50) • Commercial banks unable to serve the needs of low income households and microenterprise • Cost of granting credit, servicing loan. Low return.

International Aspects

• Currency conversion • Controlled currencies • Banking laws • Alternative monetary systems • Credit cards, checking: minor importance • Availability of credit: major importance 20-763 ELECTRONIC PAYMENT SYSTEMS FALL 2002 COPYRIGHT © 2002 MICHAEL I. SHAMOS

Major Ideas

• Integration of payment with business processes – Straight-through processing • World trend toward globalization of currencies – Euro, HKD/USD, Eastern Caribbean dollar • Instantaneous settlement – Increases volatility – Reduces risk – Effect on currency control?

Electronic Invoice Presentment

Transcript Electronic Invoice Presentment

Electronic Payment Systems 20-763 Lecture 10 Electronic Invoice Presentment and Payment

Outline

Electronic Billing

Savings on $100 Billed Electronically

• Reduced non-payments • Reduced processing errors • • Eliminated paper processing • Saved postage • More efficient customer service Total potential savings

What is EIPP?

EIPP Participants

EBPP Biller Models

Biller Direct Model

Biller Service Providers (BSPs)

Consolidator Model

Thick versus Thin Consolidators

EIPP Issues

The e-Billing Process

BillMiner Architecture

Integrating Payments with Upstream Processes

EIPP Projections

Customer Interface

Encirq Preference Model

Paytrust

Statements, Billing & Reporting in Banking

（银行服务的对帐单、帐单和报告处理）

Tradelink’s E-Commerce Flow

EIPP Status

EIPP Major Ideas

Future of Electronic Payments

Money Supply Chain and Value Chain

Role of Cash

eCash

Ubiquitous Computing

Checking

Micropayments

Microcredit

International Aspects

Major Ideas

Directory