Straight Through Processing (STP) is the latest trend in payment processing for financial services companies, merchants and businesses.
With traditional payment processing, a single transaction is typically handled by several different people and involves multiple steps. With STP, the entire process all the way to final settlement is entirely automated. STP means businesses can process remittances faster, cheaper and easier.
Traditional payment processing usually routes remittance documents to a supervisor for approval and then to payment processing personnel for reconciling the payment with the order and additional paperwork. Once the payment has been made and reconciled, accounting personnel enters the purchase into the accounting software and creates reports. This lengthy process inevitably takes a lot of time, slowing the acquisition of the payment and the accounting of the sale.
The traditional method requires a lot of people, documentation, check points, decisions, processing and time. The entire process is time consuming, costly and inefficient. STP remedies the problems of the traditional method by creating one platform that allows a business to create payment processing policy rules, as well as monitoring and accounting.
With Straight Through Processing, all of these steps are automated with your back-end systems. STP monitors and automates the entire process based on rules and conditions established by operational policy, providing updates and real-time information on payment progress.
A well-conceived STP system can almost completely automate the accounts receivable process. This means spending less time and money on personnel and documentation overhead, and will speed the process by reducing the number of steps and potential errors that can occur during remittance processing.
STP can reduce complexity and save money for a business of any size. However, larger businesses benefit the most from an STP system. With FTNI’s services and products, your entire payment processing system can evolve into an efficient STP system, saving you time and money compared to traditional payment processing.
Originally published August 20, 2014.