This announcement in Yahoo! Finance provides an overview of a collaboration between the Federal Reserve System and the Business Payments Coalition (BPC) around an industry initiative to create a place for e-invoices in standard formats to be exchanged, while separately seeing if the same can be accomplished for remittance information that accompanies payments. The BPC is a volunteer organization originally established about ten years ago under the name Remittance Coalition, and currently has about 500 member entities.
‘The Federal Reserve and the Business Payments Coalition (BPC) today announced 73 organizations have joined an industry effort to stand up an operational pilot exchange framework to enable businesses of all kinds to exchange electronic invoices (e-invoices). Another 42 organizations will strive to assess whether a similar exchange framework can facilitate electronic delivery of remittance information across all payment types….
The E-invoice Exchange Market Pilot and the Remittance Delivery Assessment Work Group are two industry efforts aimed at catalyzing the modernization of business-to-business (B2B) payments in the United States. The commitment to these work efforts by organizations across the industry is evidence that there is a real desire to modernize B2B payment processes. Digital payments and processes benefit businesses through lower costs, better cash management, error reduction, risk mitigation, increased transparency and improved efficiency.’
This effort sounds somewhat familiar since there are other products and services that are attempting to fill in parts of these gaps, for example the Nacha Phixius platform, Mastercard Track, and any number of commercial e-invoicing capabilities that one can find. We suppose that since there is no e-invoicing standard in the U.S., unlike some markets in Europe, this is a way of establishing de facto standards. We certainly applaud any methods to further the digitization of cash cycle operations, and standards are welcome. Given the adoption of ISO 20022 in all new real-time payments systems, as well as conversions of Fedwire, CHIPS and SWIFT, we would also think that the remittance part of this is a somewhat clear path.
‘The E-invoice Exchange Market Pilot and Remittance Delivery Assessment Work Group will continue to drive innovation and adoption of electronic B2B payments processes in the United States. To stay informed of the progress of both initiatives, visit BusinessPaymentsCoalition.org and FedPaymentsImprovement.org, and join the FedPayments Improvement Community to be among the first to hear about the latest payments improvement announcements.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group