Discover how banks and corporate treasurers achieve traceability through the payment lifecycle using Symmetree by Axletree.

Payment Traceability: The Reality

We consider supplier and employee payments as a frictionless process. You input the beneficiary’s information along with transaction details into your payment system and you send it to an approval queue. The payment system transmits the payment to the bank once it obtains the necessary approvals. Sounds straightforward, right?

Reality is often disappointing. Underneath that blissful facade lies a web of complexity that grows geometrically with the addition of another counterparty or payment method. When you pull back the veil over that complexity, you find that there are four main drivers behind potential sources of friction and a lack of payment traceability .

1.Communication between interlinking systems

When dealing with multiple systems to create, validate, and approve payments, there are a variety of bumps in the road that can occur. This onerous process requires manual uploads, and separate credentials to access disparate systems that have limits on their supported payment types. This is a source of frustration and friction within the daily life of a treasury professional. Leading enterprises use a single, secure system that integrates all internal processes and external payment networks to create a unified, hassle-free payment experience.

2. Validity of payment information

Is the payment data transmitted to your bank valid? Errors in processing can occur if the payment information, the payment method, and the payment formats do not align with your bank’s expectations. These errors drive up your payment processing costs. You can avoid these errors by implementing payment validations to ensure that your organization does not release payments if they lack critical information. By validating payments before processing them, you can increase the probability of having successful transactions and reducing failure costs, while keeping your suppliers and employees happy.

3. Payment message/file format

Banks send and receive payment data in a variety of formats and standards, while ERPs tend be more limited with the data formats they can ingest. This mismatch poses a considerable roadblock for efficient processing of payment and acknowledgement data – besides the inherent risks and costs associated with potential delays in processing, there are significant impacts on the end user experience due to a lengthier onboarding process. This places a limit on the growth of your business. Adherence to a mutually beneficial standard for messaging results in a significant boost to straight through processing goals.

4. Payment rails/channels utilized

Existing ERP and financial systems face a limit on the number of payment rails and networks they can access. This introduces additional disorder whilst sending payments locally and across the globe. A payment processing platform with intelligent routing that uses a variety of host-to-host, ACH, RTP, SEPA, SWIFT, API, and blockchain connectors allows you to stay cost-efficient for each payment type and agile to the needs of your suppliers and employees.

Organizations look for a payment traceability solution that integrates proprietary back-office applications with a variety of banks and payment rails – a platform to bridge the gap between different proprietary messaging formats of the enterprise and those of the recipient. Achieving straight through processing (STP) by integrating your applications improves your business agility, and reduces the time and cost related to the deployment of business solutions in your payment’s ecosystem. This translates to minimum effort, reduced risks, and lower implementation and maintenance costs.

Start your payment transformation journey today!

Click here to read about How Real-Time Payments Can Modernize the Payments Ecosystem!

February 11, 2021