Payment Innovations: New Tools Become Mainstream

Just a little over three years since Check 21 became effective, payment processing technology continues to advance, while acceptance grows. Consider that as of October 2007, about 12.2 billion checks per year were being cleared via an image-based process, reports checkimagecentral.org. This represents about 40 percent of all checks, the site said.

Financial executives with companies of all sizes are becoming more comfortable with tools such as check scanners and recognizing the benefits they offer, says Craig Vaream, vice president and ACH and global check deposit product executive with JPMorgan Chase. "The adoption of this technology makes our clients' lives easier."

As a result, banks continue to introduce new systems to help their corporate clients process payments more efficiently and accurately. Equally important, given that most companies' customers use a range of payment methods, these solutions can efficiently handle various payment types.

Deutsche Bank, for instance, has introduced "Dynamic Payment Management," says Harold Young, head of payments with global transaction banking. Treasurers can tell the bank when to issue different payments. A payment can be set for a specific time, which can be critical during a merger or acquisition or dividend payment. Or, it can be conditional on some event, such as an account having reached a certain balance.

At the same time, treasurers obtain 24/7 visibility into their payments queue. "In a real-time settlement world, you need to manage cash flows intraday to maximize treasury efficiencies," Young says. This visibility also allows treasurers and cash managers to handle more enquiries and investigations of payment questions themselves. By moving to a self-service investigation model, the average length of time required to resolve questions has dropped from about 4 hours to 11 minutes, Young notes.