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© Copyright 2011, Clearingworks. All Rights Reserved.Learn more at www.Clearingworks.com

Payment Processing. Delivered.

5 Simple Steps to Streamline Your Payment Processing

e B O O K # 1

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© Copyright 2011, Clearingworks. All Rights Reserved.

I N S I G H T F O R P A Y M E N T P R O C E S S I N G P R O F E S S I O N A L S e B O O K # 1

Learn more at www.Clearingworks.com

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With 10 years of experience in the payment processing industry and 8 million payments processed each day for multiple customers, including American Express and the US Treasury, we’ve been around the

block a few times. To help you out, we’ve combined our knowledge to provide five steps to streamline your payment processing, which will help you become more efficient and save you money.

Each day brings a proliferation of new payment channels, clearing mechanisms, regulatory mandates, and cost pressures. It’s enough to

make an accounting operations manager’s head spin. What’s worse is that with all the noise in the market, there’s a good chance that you’re paying too much to process your payments.

Navigating the rapidly evolving world of payments can be a costly journey.

Step 1: Convert As Many Payments as Possible from Paper to Electronic

Step 2: Consolidate Payment Systems

Step 3: Aggregate Deposit Channels

Step 4: Take the Middle Man Out of Card Payments

Step 5: Implement Analytics and Reporting to Make Better Decisions

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Processing paper checks is expensive; it requires expensive machines or people to open the envelopes, endorse the check, courier the check to the bank and fix all the problems inherent with such a process.

Electronic payments are far better than checks; they’re faster, cheaper and more accurate. This reduces costs, errors and processing time. Unfortunately, while electronic payments now account for almost 70 percent of all consumer bill payments, research1 shows an eye-popping 91 percent of business-to-business invoice dollars are still paid with old fashioned paper checks.

To put it simply: You’re going to continue to be paid by check and you need to know how to deal with the situation as efficiently as possible.

We suggest you consider the following:

Take Advantage of Check 21 Standards – Checks can be

converted to images at a centralized mail-receiving location or any remote location. Banks are required to take image deposits as long as they conform to the published standards.

Take Advantage of Check Conversion to ACH – Convert

your checks to ACH payments under the guidelines of the National Automated Clearing House Association (NACHA); nothing is faster or more efficient. NACHA is even dropping the requirements to offer opt-outs to customers. This means starting in September 2011, conversion to ACH will be even easier.

Use Automated Clearing House (ACH) Payments Wherever You

Can – Work with your partners and even your key customers to establish a process for paying by ACH. By standardizing the remittance information, both you and your customer will save time and money.

Involve Your Whole Company – You want as many customers as

possible to use electronic payments, so get the right people involved to make that happen. Marketing is not limited to a single department; keep all of your customer service, tellers and field representatives involved in each new electronic payment program or incentive.

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The Bottom LineWith customers continuing to pay by paper check, you must take advantage of today’s technology to streamline your payment processing!

Convert As Many Payments as Possible from Paper to Electronic

1 IAPP Annual AP Automation Study, 2009

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Have you ever counted the number of systems, processes, people, vendors and departments required to support your current payment processing? If not, take a minute and count; you might be surprised.

Traditionally, most organizations have separate systems and departments for credit card processing, check processing, walk-in payments, web payments as well as lockbox, Internet and mobile payments. Businesses usually have a different payment application and vendor for each payment type, with a separate contract and fee structure. It can be complicated and crazy.

Modern technology can simplify this. It allows you to reduce the number of vendors, contracts, departments and fees between your customers and your bank account.

Here’s how to consolidate:

Involve all the stakeholders from your various payment systems. By

involving them early, your consolidation process can avoid pitfalls that can occur without their “front line” point of view.

Look for a solution based on open standards. Your system needs to

fulfill your requirements today and be flexible enough to adapt for tomorrow.

Look for a solution that addresses privacy, security and

fraud detection. The best payment system in the world is no good if it can’t protect sensitive information or identify potentially fraudulent behavior. Security should be strong, yet simple to understand and manage.

2 Consolidate Payment Systems

The Bottom LineThis isn’t basic cable! Pay only for the channels you want, from as few vendors as possible.

Consider the case of a major credit card issuer that implemented an enterprise payments hub three years ago. Today, the enterprise payments hub receives all of the issuer’s arranged payments, web payments, mobile payments, wires and even lockbox and over-the-counter payments. This approach has helped the company maintain its brand image by providing a consistent customer experience, regardless of payment channel. Audit requirements were greatly reduced by using a single point of management for all payments, including protection of private information and fraud detection. Plus, the company’s treasury and accounting teams now have a single flow of receivables data across all payment channels.

Moving to a consolidated payment environment enabled the issuer to eliminate 22 separate payment systems, resulting in a $145 million savings over the first three-years.

Payment Systems Consolidation in Action

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You need to reduce costs and get payments into your account as quickly as possible. One often-overlooked solution is to optimize payments clearing by aggregating deposit channels.

The fewer channels you have for getting your money through the process and into your bank account, the easier it is to negotiate better rates with your bank. When all your deposit channels are electronic, you are then free to choose whichever bank gives you the best terms, regardless of their physical location. Of course, converting all deposits to electronic format is the best way to take advantage of this.

Depending on your volume and payment types, it may make sense to have just a few, or maybe even a single deposit from all your payment channels. Just remember, the fewer, larger channels, the better.

You can have the freedom to adjust your banking relationships as your business evolves; you just can’t do that in a fragmented deposit environment.

3 Aggregate Deposit Channels

The Bottom LineDon’t waste time or money getting your money into your bank account!

Seeing Channel Aggregation in Action

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One government entity consolidated all check and electronic check payments received by all of its 5,000+ agencies. Although the payments are received through multiple channels — mail, websites, walk-in, etc. from all parts of the United States — they process the payments through a single payment platform. This platform balances the transactions and prepares the payments for deposit and clearing. Electronic Check 21 files are prepared

and any payments that are eligible to be converted to ACH are converted under the ARC, BOC or POP rules. By using ACH and Check 21 together, the entity has eliminated all paper deposits and Pass 2 encoding and moved entirely to electronic deposits. This means reduced labor, hardware, supplies and transportation costs, simplified interfaces between its legacy remittance system and its mail opening device and streamlined administrative returns handling.







Consumers and businesses view card payments as a necessary part of doing business. This will only increase in 2014 when the federal government begins distributing entitlement benefits with EBT cards. Considering this increase, it’s imperative that you offer your customers the ability to pay by card.

The good news is that regulators are warming up to the idea of utilities and other traditionally paper-based billers accepting online card payments. Recent legislation (the Dodd-Frank act and Durbin amendment) seeks to increase competition and drive down historically burdensome interchange fees.

Currently, many utilities rely on third-party processors to take any card payments because they are unable to absorb the cost. This forces consumers to pay an additional “convenience” fee to use their card. This is a huge waste of money and hassle for everyone except the third party vendor.

A key part of your payment strategy, especially for utilities, should be to eliminate those third party providers and offer your customers true flexibility in accepting card payments through your website, walk-in locations, and over the phone without the extra fees.

4 Take the Middle Man Out of Card Payments

The Bottom LineOffer your customers a truly convenient way to pay by card without the convenience fee. But don’t complicate your life or waste money with a third party vendor.

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There’s no room for guessing; you need real-time, accurate information about your payment processing so you can make the best decisions for your organization. Key decisions depend on your ability to accurately monitor, measure, and predict operational needs and payment trends. Most organizations try to bridge legacy payment silos, only to leave themselves wanting.

Consider how valuable it would be if, at any point during the day, you could tell your treasurer:

The number and value of payments received so far

Expected availability from the bank

Returns that were received

With integrated payment analytics and archiving, you should also be able to tell at a moment’s notice how today’s numbers compare to yesterday, the same day last week, last month, last year, or any other date you wish.

Analyzing payment information also yields better insight into customer behaviors and preferences, which can shape new marketing campaigns and product decisions. Viewing long-term trends will allow you to quickly adapt to market changes while improving your forecasting models.

The good news is that recent advances in technology make all these capabilities possible today.

5 Implement Analytics and Reporting to Make Better Decisions

The Bottom LineCome out of the dark! Leverage clear, easy-to-use and graphically rich analytics and reporting to manage all your information long-term and in real-time.

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We’ve outlined five steps for streamlining your payments processing based on lessons learned by years of payment processing improvements for some of the country’s top businesses, utilities and government agencies. Plus, we’ve shared tips and key criteria to consider when looking into each of these areas. Of course, the best way to streamline your payment processing is to follow each of these steps all with a single end-to-end solution.

Clearingworks streamlines all your payment processing into a single, easy-to-use, integrated platform, improving your productivity and your bottom line. We typically save customers as much as 60 percent off their previous payment

processing costs, while simplifying an increasingly complex payment processing landscape.

With more than 8 million payments processed each day by many household names, Clearingworks brings the power of a proven, enterprise-class payment processing service and robust payment analytics in one simple solution for one simple price. And you’ll be up and running in 30 days or less. Guaranteed!

Next Steps

See how much your organization could save with our complimentary savings analyzer at www.clearingworks.com. It’s a free, no obligation way to quantify your

savings. Or you can always call one of our payment processing specialists at (888) 254-8821 or by e-mail at [email protected].

In future eBooks, we’ll go into more detail on each of these steps, so stay tuned.

How Clearingworks® Can Help

Clearingworks is an on-demand payment processing service with enterprise-class payment, deposit, and returns processing and powerful payment analytics tools. We process more than 2 billion payments each year for small, medium, and Fortune 50 companies. Clearingworks.com

About Clearingworks

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