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Wednesday July 14, 08:18
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B2B Payments Are An Opportunity For Banks
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By end-2004, B2B spending by US government and businesses will total USD 14.3 trillion, a more than 13 per cent increase on the 2000 figure, according to Visa’s new Commercial Consumption Expenditure (CCE) index. In contrast, Visa’s consumer spending totals in 2003 were almost half those for CCE, at USD 8.2 trillion while Visa’s CCE volume rose 20.4 per cent, according to Cards International. Financial institutions have sizeable opportunities in the commercial payments space, Visa predicts, with payment company-related products representing only about 2 per cent of all business-related payments in 2004.
Correlating increases in B2B payments volume will be reflected in Visa’s future CCE indexes, which are to be updated once a year. Corporate payments initiatives such as TWIST are now defining standards to cover the processing of invoices and invoice dispute management, the automated processing and reconciliation of payments supporting EFT, ACH payments, direct debits, checks and card payments. By defining a core payments kernel based on XML, the TWIST initiative is seeking to automate and catalyze B2B payments with end-to-end processing functions across banks, corporates and payment systems.
TWIST’s move to harmonize this core payments kernel with the SWIFT, IFX and OAGi standards ensures support for these standards in the banking community, which stands to increase corporate-to-corporate straight-through processing (STP) and to reduce operational costs. Automating the end-to-end process of invoicing, payments and working capital management in domestic and international trade brings efficiency gains for corporates and their banks, while improving core corporate treasury functions and accelerating cross-industry process innovations.
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