In 2008, we will see more and more corporate clients turning to their financial institution to help them facilitate the receipt of payments, streamline information capture, improve cash flow, meet regulatory compliance, and improve customer service. Multiple paper and electronic payment mechanisms coexist and must be managed to deliver efficiencies in enterprise payment processing. This is especially true in today’s post-Check 21 environment, where we are seeing the convergence of several different types of electronic payments – all designed to expedite and improve the availability of funds.

We see the dramatic efficiencies that will be achieved with the implementation of ASP or software-as-a-service based receivables solutions. Hosted/managed service offerings will provide a receivables solution that consolidates the images and data from all types of wholesale and retail lockbox transactions, through paper or electronic acquisition. Integrating paper-based transactions (checks, stubs, and invoices) with electronic payments (ACH, EDI, credit card and wire) provides end-users with a single point of access to all their lockbox data, offering enhanced management controls of their receivables operation. Hosted outsourced receivables will also connect corporate and commercial clients to all the new check clearing options – ACH, truncation, substitute check/image replacement document (IRD), and electronic check image exchange.

Brian Hurdis is president of Metavante Image Solutions.
He can be reached at 405-787-1800.

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The most significant trend we expect to see in the payments automation space this year is the emergence of Remote Deposit Capture and Image Cash Letter deposits as the preeminent channel for processing checks. We expect reductions in both Accounts Receivable Conversion (ARC) and Back Office Conversion (BOC) adoption rates and, possibly, replacement of some existing ARC/BOC implementations. Three developments that will drive this convergence are:

• Distribution of work to the remote desktop
• Streamlining of processes
• Consolidation to ‘single set’ business rules

Giving up ARC/BOC will eliminate overhead associated with the creation and maintenance of business rules implemented on a one-off basis and the software needed to support those rules; reduce the labor cost of compliance monitoring of notice and “opt out” provisions, and; maintenance of tables needed to support the business processes.

Increased adoption by banks of check image clearing, currently being promoted by the Federal Reserve’s new pricing structure, will increase the speed of clearing, effectively leaving ARC/BOC with little competitive advantage.

The increased penetration of RDC and ICL processes does, however, open the market to the next generation of automated, rules-based processing software. These applications are just coming to market and provide a solid foundation from which to further streamline processing fromreceipt to deposit to distribution via the debit card channel. High quality integrated solutions will combine RDC, ICL, and receivables processing in multiple channels; be intuitive to the user, and; straight-forward to support.

Daniel J. King is senior business analyst at Informatix, Inc. He can be reached at
916-830-1400 or daniel.king@informatixinc.com.

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We see several big changes as we move into 2008 including:

1. The adoption of distributed capture technology will accelerate
2. Pass 2 power encoding will start to decline
3. The trend toward outsourcing remittance processing will continue as
   pressure builds on billers
4. Vendors will continue to consolidate and impact the industry
5. Emerging international payments markets will offer new opportunities for
   U.S. companies.

The big picture is that these trends are helping to drive a convergence of paper-based and electronic payments that will require banks and billers to rethink traditional processing silos. Likewise, the convergence of payments and document processing is spawning a new breed of automated technology and processes.

This electronic processing is the key to survival for banks, billers and vendors alike. Those who do not embrace the changes in the payments market, actively participate in the emerging electronic marketplace, and determine how to leverage new processes and technologies, will find themselves at a disadvantage in 2008 and beyond.

John Kincade is vice president of sales at J&B Software, Inc. He can be reached at 610-964-0898 or johnki@jbsoftware.com.