How will the Remittance Coalition's project to create an industry business directory make it easier for companies to make electronic payments in the US?

In a recent video interview – How the B2B Directory Can Help Treasurers – published on afponline, BC Krishna, CEO at MineralTree, gave his views on why the initiative could change the way electronic payments are done in the US and how it could push the country, known for its cumbersome, slow cheque payments, further in line with the digital, real-time payment systems now in use in many Western and Asian countries.

Krishna said: “We're looking to create an industry utility that enables everyone in the payments system to make electronic payments more easily by finding out who to pay more easily.... This initiative is a long-time coming and I hope that when we do realise it, it will deliver the sort of huge cost benefits and convenience to treasurers within corporations.”

The B2B Directory is an industry-wide initiative in the US that aims to set up a directory, much like an “address book for e-payments”, that will store, manage, and look up the electronic payment identity of business customers, making it easier for US corporations to pay their business suppliers electronically. It's intended to be an independent non-profit utility, which delivers remittance data in an open, trusted and secure format.

The directory is an initiative undertaken by the Remittance Coalition https://fedpaymentsimprovement.org/press-room/ , a voluntary group consisting of the Federal Reserve, payment services providers and other businesses and individuals involved in the US payments industry.

According to Krishna, the next steps for the remittance coalition in 2015 are:

1. create a business proof of concept
2. define the rules and governance of how it will operate
3. define some of the business models that will be used to operate it.

According to the AFP Electronic Payments survey 2013, a typical organisation makes 50% of its B2B payments by cheque. In fact, studies show that the figure could be much closer to 90% for smaller firms.

While the US is certainly, albeit slowly, moving towards a faster, more efficient and safer payments environment, as seen by the document released by the Fed in January this year, Strategies for Improving the U.S. Payment System, which highlights the need for faster payment settlement times, the B2B Directory has the potential to make e-payments an easier option for smaller US companies.