Electronic Payments News

A Letter From Our Chairman: Electronic BIlling and Invoicing

(Originally published in Canadian Treasury Magazine - February/March 2004)

Electronic Bill Payment is now an 18-year-old industry in Canada and has become a widely adopted method of paying most regular monthly bills. Electronic Bill Presentment is much newer and, so far, not widely adopted by billers or accepted by customers.

Economics dictate that both electronic bill payment and electronic bill presentment will be the way of the future. The savings in postage, paper and bank charges alone justify the cost of participation by both the biller and the payer. In fact, the Gartner Group suggests in a recent study that it can cost more than US$1.10 to produce and deliver a paper bill, but only US$0.44 or less for an equivalent electronic bill. Organizations that have pioneered the electronic bill presentment world have focused on one of two Web-based methodologies. In my view, a third, more efficient methodology based on e-mail makes sense. Payment of an e-mail bill can be effected with only minor changes to existing bill payment systems, is easily available to large and small businesses and provides for a reasonably secure method of direct communication between the biller and the bill payer, helping to maintain business relationships.

Such a method also results in a reduction in the ongoing overhead costs associated with Web-based systems, and so can significantly reduce the $0.44 cost per bill to but a fraction of that amount.

A comparison of these approaches is the subject of this paper.

Electronic Bill Presentment and Payment (EBPP) describe the process of delivering bills to customers and having them paid electronically. Generally speaking, the bills are presented as images on a website. They are accessible by the customer using a personal access code. Electronic bill presenters may be the billing company itself. Alternatively, the billing company may send its bills to an electronic bill presentment service, sometimes called a consolidator. Recipients of electronic bills also expect to be able to pay the bills electronically. That function is carried out by a bill payment service. A link from the presentment site to the payment service’s site may be provided by the presenter.

 Problems that are occurring with implementation of bill presentment revolve around efforts by third parties to control both the presentment and the payment process. This causes concerns ranging from initial and ongoing cost to security for both biller and bill payer, not to mention a huge degree of complexity in linking together many disparate, different systems.

 An alternative methodology involves e-mail presentment by the biller directly to an e-mail address specified by the bill payer. This method is relatively simple to implement and involves virtually no ongoing costs on the biller’s part.

All the biller has to do is obtain the e-mail address from the bill payer and incorporate it into its bill printing process. Software that will distribute forms by e-mail is available off the shelf. There are no serious security concerns, password access systems or history maintenance requirements.

Instinctively we know that electronic presentation of bills and invoices should be far less expensive then sending paper documents by mail. If payment can also be made electronically, the ultimate in efficiency and convenience can be achieved.

 Problems have arisen with adoption of the concept – by biller and customers – because of the complexity and costs of various offerings. The basic problem has been the attempt to tie too tightly the presentment and the payment processes into one system. This introduces complexity into the solution and requires a third party processor, along with all the inherent costs, security issues and system complexity that this entails.

Accounting systems used by many small companies permit them to e-mail their bills. There is no third party involved. Security issues diminish. The biller does not need to maintain the outstanding file, history file or access controls. That is all managed from the customer’s own e-mail system. For customers who prefer a fax to e-mail, that option is offered too.

 Recognizing this, TelPay is adapting its e-payment software and systems for businesses and individuals to provide similar efficiencies. Here are the options billers and customers have for participating in the emerging EBPP world. Our choice is the third one, but we need to understand the alternatives as well.

 ...to read the rest of the article, please go to:

http://www.telpay.ca/common/pdf/Cdn_Treasurer_Feb2004.pdf

Bill Loewen FCA, CM is the founder of Comcheq and a pioneer in the field of Electronic Payments. He is currently Chairman of TelPay Inc. in Winnipeg 

(Originally published in Canadian Treasury Magazine - February/March 2004)

How does Electronic Payment Processing Work?

 

Electronic payments in Canada began in March of 1985 with TelPay’s first electronic payment transmission. Since that time electronic bill payments have grown in volume, and are slowly becoming as common as direct deposit payroll. However, that still does not answer the question of how electronic payments work?

First, we should examine the fundamental aspects of electronic payments. These would be debits and credits. In the world of electronic banking, a debit is used to indicate a deposit, or a “money in” transaction. A credit indicates an expense, or a “money out” transaction. This is how banks and other financial service organizations manage millions of transactions every day. A debit cannot be made without a corresponding credit and vice versa.

Electronic payments and the complex series of debits and credits which are “transmitted” between TelPay and its customers result in: bills being paid, direct deposit being made, and even transfers between bank accounts. When you use the TelPay system to send a payment to someone, the system marks that as a debit against your account, and as a credit towards the account you are sending a payment to. Likewise, when a supplier or business sends a payment to you, the TelPay system creates a debit against their account, and a credit towards your account.

Its Easy to Be Green - TelPay Innovation Saves the Environment

 A blog entry on April 22nd couldn't really be anything other than a post related to how much we save the environment! Being the largest independent payment processing company in Canada, and a "Green" innovator in the world of electronic payments, one could imagine that we have a lot to talk about.

By eliminating paper cheques, TelPay estimates that in 2009, it was able to save:

• 77,500 kilograms of paper (171,000 lbs)
• Over 2000 trees
• 3.8 million pounds of greenhouse gases from being released
• Over six million litres of waste water from being discharged 
• Eight dump trucks worth of waste from paper production
• Nearly 350,000 litres of gasoline from being consumed due to mailing bills, statements, and payments

(source: PayitGreen Business Calculator)

TelPay has been helping Canadian financial institutions such as CIBC, the Credit Unions, and businesses of all sizes to process electronically for the last 25 years. Having been the first Canadian company to do so, TelPay has made it possible for all these companies to process electronically.

The staff is also actively involved in ensuring that as a company we all do our part. Having a dedicated "Green Team" helps us to ensure that we keep moving in the right direction. The company has already implemented a recycling program, e-faxing, duplex printing, and paper/ink saving fonts to help save paper, and reduce TelPay's overall carbon footprint. 

If you have any "green" initiatives that you would like to share with TelPay, we would love to hear from you! You can either comment in the form below, or send a email to us: webmarketing (at) telpay.ca

Lower your Cheque Fraud Risk

The practice of leaving sensitive information on paper cheques is becoming increasingly risky. A technique known as cheque-washing is often used to commit fraud against businesses and individuals.

Cheque-washing is when cheques are "washed" (cleaned of their original information) and then cashed for different amounts than they were originally written for and by different people than the intended payee. In order to have these charges reversed, the victim will have to file a police report, fill out affidavits for the bank, and prove to the person/merchant that is being paid that it was fraud. This can be a very lengthy process which can seriously undermine the trust of your business partners and can damage your sense of security.

You can eliminate your risk of falling victim to cheque fraud. The easiest way is to simply pay electronically, and leave the security to TelPay! Our proven system will ensure the highest level of security and confidentiality with your electronic payments. TelPay has multiple layers of fraud detection built into both the software and our processes, keeping you and your business safe from fraud.

In the event you are still writing paper cheques, here are a few steps that you can take to protect yourself.

1) Use high-quality cheques which employ security features
2) Split responsibilities so that no one person is solely responsible for issuing cheques
3) Keep cheque stock in a secure location and minimize who has access to it
4) Reduce cheque usage as much as possible and use either electronic payments or pre-authorized debits
5)  Use cheque paper which bonds the toner to the paper

These five points will assist the "in house" security of your cheques and cheque processes. While we realize that it may be impossible to completely eliminate cheques, it is possible to reduce your business' reliance on them, and in the process, reduce your fraud risk

Electronic Payments are Convenient, Save Time, Money, and Frustration

Businesses often seek out ways to
automate/streamline manual processes.
Automating manual processes improves efficiency and helps businesses to save more money. It was the breakthrough of automation that led to the advent of the modern assembly line (thank you Henry Ford). Had it not been for automating manual processes, then it would not be possible for companies to enjoy the efficiencies which allow us to enjoy all that we do today.

The important point to note when looking at this example is that automation helps to speed up manual or repetitive processes. Speeding up manual processes allows for the time and energy savings to be reinvested in other profit generating activities. What could you do with more time? Could you make an extra sales call? Brainstorm that next breakthrough idea? Or could you simply bank that time, and allow yourself to have a vacation at some point during the year?

The same holds true when it comes to your accounts payable processes. If you are not currently processing electronic payments, then you likely are spending a lot of time manually cutting cheques, chasing approvals, stuffing envelopes, balancing books, and maybe even licking stamps. Each and every one of these additional steps costs you time to execute, and money in the form of office supplies. Are you feeling the pain of manual accounts payable yet?

This is why TelPay is helping accountants, bookkeepers, SME's, and non-profits all across Canada! The TelPay for Business software eliminates cutting cheques, accelerates dual and remote approvals, and certainly requires no stamp licking. By speeding up the accounts payable process, you will save you/your business time and money. 

Book a webinar today and find out how!

Breaking Down the Accounts Payable Barrier

For several years consumers have enjoyed the convenience of paying bills electronically.  Many business owners pay their personal bills electronically but realize that the bill payment services available do not meet their needs for business payments.

TelPay's fully integrated electronic payment system allows businesses to pay all of their bills in minutes. Fast, efficient and cost effective TelPay allows you to pay any supplier, government agency, or individual in Canada. You can also make international payments.

TelPay's payment system can be integrated with your existing accounting software, or used as a stand-alone accounts payable system. TelPay allows for both dual authorization and remote authorization, which eliminates the need for 2 signing officers to be present to sign cheques. Payments can be approved securely with a few strokes on your keyboard/Blackberry/iphone. There is no need to gather or store suppliers' bank account information. TelPay does all the work.

TelPay's payment system provides security, control, convenience and efficiency.  Businesses can now make all of their Accounts Payable payments electronically by using TelPay, which was designed with the needs of Canadian businesses in mind.

 Key indicators show that electronic payment adoption in the business sector will quickly march ahead. Forward thinking companies that have a desire to reduce costs and improve efficiency will find that TelPay's electronic payment system will  save them time and money.

Sign Up Now to start using TelPay for Business

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Credit Card Processing vs. TelPay

Accepting credit card orders and processing cards as a payment method is a common business practice, and is used by businesses everywhere. This is the case in the world of business to consumer transactions, and in business to business transactions. This has many benefits for the merchant, and for the consumer.

The consumer benefits by having a widely-accepted payment method always at their disposal. Plus, most credit cards offer some form of “rewards” program which as the name implies, rewards the user for purchases made on the card.

 

Likewise businesses benefit by being able to offer their customers a convenient payment method. By having several methods of payment available, the business helps increase the likelihood of a timely payment.

 

However, the business that processes credit cards is 100% liable in the event that the customer disputes the payment. The business also has to pay what is commonly referred to as a “discount” rate, and interchange fees.

 

These fees charged to merchants are often in the neighborhood of 3% of all transactions on the card, and also is subject to a monthly fee. Additional fees charged to merchants include: Tiered fees, interchange plus, bill backs, authorization fees, statement fees, batch fees, customer service fees, annual fees, early termination fees, and chargeback fees.

 

Once all of these fees are examined, it becomes clear that credit card processing is a very expensive payment option. However due to the high-penetration levels of credit cards it has become commonplace for businesses to accept credit cards and the high costs associated with them as a necessary business expense.

 

Despite being a necessary business expense, companies should not give in to simply “absorbing” all of these additional expenses. The hallmarks of a successful business are innovation, customer service, revenue growth, and cost reductions. This is where TelPay steps in to provide business solutions to businesses of any size. Telpay has several offerings which can help businesses both save money, and get paid faster.

 

TelPay for Business is a software service which integrates seamlessly with accounting software (or as a standalone) to help businesses streamline costs by eliminating paper cheques, lowering merchant fees, and reducing banking fees. Nowadays businesses need to offer several different payment methods, which will ensure the likelihood of a timely payment and in the case of "Get Paid Faster" will also help to lower costs.