The Ever-Changing Face of Payments

As we take a look at recent trends, data and what we are seeing with our own customers, a few things are certain. As the payments landscape changes, we see more payment types and channels being added but not many (if any) being phased out. This translates into increased complexity of payments processing for businesses today and into the future.

Checks Remain Strong but Move toward Electronic Imaging

For example, checks are still in wide use and are not going away as many had predicted in the past. The volume of checks is lower than other payment types, but businesses are still relying on them for both accounts payable and receivables. However, trends show consumers are adopting new methods to enhance the way these checks are processed. Nearly one in six checks are now deposited as an electronic image rather than paper and we expect this trend to continue growing significantly in the future.

Fraud Continues to be a Concern

One of the reasons that businesses and consumers still rely on checks could have to do with fraud concerns. Fraudulent transactions accounted for $6.1 billion in value, representing 31.1 million unauthorized transactions in 2012. Of this amount, card fraud substantially outpaced both check and ACH fraud rates, representing 92% of all unauthorized transactions. That clearly poses a concern for businesses who want to provide convenience to their customers but avoid fraud loss. Businesses must continue to focus on security, such as providing end-to-end encryption to ensure the transaction is secure from initiation to posting through to reconciliation. This becomes even more important with the imminent proliferation of mobile payments.

Mobile Payments Abound

Mobile payments are on their way to becoming the new norm. In North America, mobile transactions accounted for nearly one-fifth of all transactions last year, making up approximately $37 billion in volume. Both businesses and consumers alike are embracing the mobile trend and increasingly leveraging mobile remote deposit capture (mRDC), in addition to credit card and ACH-facilitated mobile payments, for more traditional payment remittances. More than one in eight Americans have used their mobile devices to deposit checks. Furthermore, of the 17% of checks paid as electronic images in 2012, 93% of them came from business customers.

No doubt, smartphone payment usage will only continue to increase as the number of smartphone users is anticipated to be nearly 160 million by 2014 in the U.S. alone. mRDC will likely be the next big wave of growth in mobile payments, with 48 million smartphone users expected to use mobile deposit features by 2016. This could provide significant cost and time advantages to businesses who embrace this trend.

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Topics: mobile payments, payments, ach, check processing, electronic check imaging, mRDC, RDC

Are Collections Causing You Consternation?

The collections process can be tricky for any company, but especially for distribution companies who deal with large volumes of customers and deliveries on a daily to weekly basis. You need customers to be current in order to protect your revenue flow and keep your operations moving smoothly, but you must also be careful not to damage the personal relationship you’ve formed with your customers.

The good news is that there are new ways to not only make your collections efforts easier, but to help you improve cash flow and simplify your administration all at the same time. The same technology can be employed whether you operate on a payment due upon delivery basis or a monthly billing basis.

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Topics: automated payments, FTNI, ach, distribution companies, payment via ach, recurring credit card processing

ACH Processing 101: A beginner's guide

What Is ACH?

ACH (Automated Clearing House) is a nationwide electronic funds transfer (EFT) network that process large volumes of transactions involving credit or debit. The ACH is a private system that facilitates the secure transfer of electronic payments by connecting to financial institutions throughout the United States.

How Does ACH (ACH Payment Processing) Work?

The Receiver is the first step in the process of a transaction involving the ACH. Receivers must first grant authorization to the Originators who issued the ACH credit or debit request. The Originator’s account is then identified by the financial institution’s routing number and their account number. When the Originator has received the authorization, they will create a new ACH entry, which is then sent to the correct originating institution. This can be done as long as the financial institution performs ACH origination. The entry is distributed to an operator at ACH who continues the process by disseminating it to a receiving institution. At this stage, the Receiver’s account will receive a credit or a debit depending on the nature of the transaction.

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Topics: ach, ACH Processing

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