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Approximately 10 million American households use online bill
paying today, and the percentage is steadily increasing. Some people don’t realize it, but not all of
their ‘online’ payments are actually executed as electronic transactions. In fact, only the larger-volume payees are
‘wired’ to electronically receive remittance advices and the electronic deposit
of funds. These large-volume payees
account for roughly 70% of all recurring payments; the remaining 30% of
payments which are initiated as online payments are actually executed as good
ole paper checks. The online payment
processors (companies such as Checkfree, Metavante, and others) have done a good job in ‘wiring’ the
larger volume payees over the past 15 years, but they have largely reached a
point of diminishing returns due to the expense involved in forging electronic
payment connections and in maintaining those connections over time. Given the current delivery mechanisms, it
just isn’t economically feasible to ‘wire up’ most low-volume payees.
Who are ‘low-volume payees’?
Low-volume payees are any entity that receives payments with
some frequency on a recurring basis.
Some examples of low-volume payees include doctors, dentists, churches,
municipalities, small utilities and utility districts, and residential service
providers such as lawn or pool maintenance.
In short, it is anyone that provides some service to a consumer which is
not paid for at the time the service is rendered.
Issues for the payees
The problems associated with receiving checks from online
bill payers relates to the accuracy of the remittance information and the
timeliness of funds availability. When
an electronic payment processor generates a check on behalf of a consumer, the
payee is deprived of any remittance advice that might normally accompany
checks. In some instances, the payee
actually receives a single check in an aggregate amount together with a list of
all of the accounts and the individual amounts that the check represents. Either way, receiving such a check represents
a manual exception process in order to appropriately credit accounts with
payments. In terms of funds availability,
it may take several days for the checks to clear and for the funds to be
available for use.
With RemitCenter, the funds are electronically deposited to an account you
choose, at the bank of your choice. With paper-based payments you receive a paper check, get it deposited,
and possibly wait for the check to clear before the funds are made available. With RemitCenter
the funds are available to you overnight. This approach is also more secure, since checks
can be stolen or mis-appropriated.
At the same time the funds are depositied to your account, you will receive an email
notification that a deposit has been made. The email will direct you to logon to your
RemitCenter control console (an Internet browser application), where you can view and
download the remittance information associated with the payment. Once downloaded, the
remittance information can be electronically imported into your accounts receivable package.
Features:
 Easy, no cost online enrollment - you pay a small handling fee of $0.25 for each payment, which is
automatically deducted as payments to you are processed
Quicker cash in hand
Reliability in scheduling
Remittance data availability for import to your accounts receivable ledger
Reduces A/R work load
Reduces data entry errors
Reduces Collection issues
Convenient online history of payment activity
Issues for the payers
The primary issue for the payer relates to mistakes made by
payees in accurately posting payments to accounts. As discussed above, payees usually go through
a manual process to update accounts, and as with many manual processes mistakes
are made. With RemitCenter, your payments are made electronically to the payee, funds are
moved electronically, and remittance information is electronically available to the payee.
What do you need to do to send payments through RemitCenter? Nothing! If your payee is
registered with RemitCenter, your payments will automatically be sent to the payee through the
electronic payment network, without any action on your part. If your payee enrolls at RemitCenter
you may notice that what was previously a "5 day merchant" now appears as a "2 day merchant", which
means that you now need to set-up payments to that payee two days in advance of the due date, rather
than five days in advance. That's it!
Any payee who appears in your merchant list as a "5 day merchant" is eligible to participate
in the RemitCenter payment network. So if you have ever had problems with the posting of your online
payments, or if you would like the flexibility of setting-up payments two days in advance instead of three,
please ask your payees to enroll at RemitCenter.
Issues for the payment processors
Payment processors such as Checkfree, MasterCard, Online Resources and others have reached
a point of diminishing returns to do the integration effort required to send electronic payments to
low volume payees. The time and expense required to implement the electronic processes and maintain the
connections over time simply are not worth the value of reducing the small number of checks sent to
low volume payees. RemitCenter offers an attractive alternative to paper checks; rather than the expense
of printing and mailing paper checks, the processor sends one aggregate file per day for all of the payees
enrolled with RemitCenter. From that perspective, RemitCenter is a payment consolidator for the low
volume payees. In any perspective this approach represents reduced expense and smoother operation for the
payment processors.
The solution is RemitCenter!
[PDF]
Click here to open a new window with a PowerPoint presentation of RemitCenter in Adobe Acrobat format.
Enrollment for payees
Enrollment for RemitCenter is quick and secure. You will need to provide your bank routing and transit
number and your bank account number at that bank (both of which can be found on a check or a deposit slip,
so please have one handy when you start the enrollment process). As a security measure and in order to ensure that you
are the actual account holder, your enrollment process will not be complete until we have deposited money to your
account and you have validated the amounts.
When you register your U.S. bank account, RemitCenter makes two small deposits to your bank account,
each for an amount between $0.01 USD and $0.99 USD. These deposits should post to your bank account
within 2-3 business days. To find the amounts of the random deposits, you can look at your online
account statement or contact your bank's customer service department.
Once you know the amounts of the deposits, log in to your RemitCenter account and click the Confirm Bank
Account link on your Account Overview page to enter the amounts. If the amounts are correct, your
bank account will be confirmed and your enrollment will be complete.
Within several days after your enrollment is complete, all payments being sent to you that used to arrive as
a check without the remittance advice (from companies such as Checkfree or Metavante or Online Resources) will
now be directly depositied to your account. You will also receive an email notification of the deposit(s), and
you will be able to log in to your RemitCenter account to view and/or download the remittance information.
About RemitCenter
RemitCenter is a privately held company headquartered outside Denton, Texas. RemitCenter
is managed by Mark Atchison, who has 20+ years
experience in paper and electronic payment processing. Mark is a former executive with EDS, where
he designed, implemented and managed an electronic banking and payment processing service that provides
service to over 330 financial institutions, 500,000 online users, and processes over 400,000 online
payments per month. Mark has worked closely with the major payment processors and is a former board
member of the Interactive Financial Exchange Forum (www.ifxforum.org).
Send an email to Mark at mark.atchison@remitcenter.com,
or Mark can be reached at 001 940 231 1949 - call him!.
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