Companies in the business-to-consumer (B2C) space have historically relied on lockbox processing through a bank – or a series of banks, depending on their size. With payments coming in by check, DadeSystems Chief Marketing Officer Tom Berdan told PYMNTS in an interview that “seemed to solve most of their needs.” However, as check volumes are now on the decline, B2C companies are receiving payments from other channels, such as bill payment sites.
If companies offer payments through, say, a portal, funds typically come through an automated clearing house (ACH) transaction or a credit card (if those types of transactions are allowed). In the case of ACH, transactions could be initiated through a biller: A consumer may, for instance, give his bank account information to his utility company, which will then draft his account every month for his power consumption. But in other cases, the companies may want an individual consumer to make those transactions.
B2C companies have many different payment methods coming in through various channels. As methods shift from check payments to, say, bill payment sites, ACH origination sites and biller direct companies may see an impact, as in many cases each of those is an independent solution.
If they are using the bank lockbox, some of the information coming through that channel might not arrive until late in the day or the next day. And, if they receive funds through a bill payment site, they could be getting multiple files throughout the day. Their customer service representatives then have to navigate all of those systems to determine whether a given customer has made a payment.
However, Berdan said, “Integrated receivables (IR) solves a lot of those problems.” For starters, the technology reduces the cost and processing of payments, because “it creates one standardized workflow” to accept payments through any channel, whether that is a lockbox, ACH, bill payment site or their own site, he noted. The technology can also catch errors faster if consumers, say, mistype their account number.
At the same time, many B2C companies such as utilities do have a business-to-business (B2B) component. In one case, a property owner might have multiple locations billed to one company. B2C firms typically can’t handle those, and they have to create exceptions. In that case, someone has to manually go in and process them.
Beyond reducing costs with a standardized workflow, IR can also improve customer service by providing a single archive for customer service representatives. With the technology, FinTechs can enable B2C companies to process payments in a more efficient, accurate and timely manner.
