The Remittance Coalition (RC) is a group of organizations and individuals working together to promote the greater use of electronic business-to-business (B2B) payments and electronic remittance data exchanges. The Coalition accomplishes this objective by addressing various problems and barriers that make it difficult for businesses to use electronic alternatives to paper checks and remittance advices.
Why the project was set up
In July 2013 the RC set up their B2B Directory project which had the following scope statement:
- Issue/Reason for project: a major barrier to sending electronic payments is the difficulty of obtaining financial information, such as bank and account numbers, of trading partners. The Remittance Coalition has formed a team to study this issue and suggest one or more business to business (B2B) directory models that would provide a secure way to obtain such information.
- Scope and terms of reference: The project team will focus on development of B2B models that would serve the needs of small to medium-size U.S. businesses (defined as having annual revenues of $100 million or less), as they have fewer resources than larger businesses and are underserved by existing B2B directory services. The scope of the team's efforts will be to develop use cases, outline specifications, identify and evaluate alternatives, and propose a framework for one or more secure B2B directory models designed to serve small to medium businesses. They will publish a white paper summarising their conclusions and recommendations by the end of 2013.
Obtaining financial information from trading partners is often quoted as the main barrier for moving to electronic payments. Theoretically, the B2B directory will identify opportunities for the U.S. payments industry - corporates, banks and payment service providers - to identify opportunities for the payments industry to come together and accelerate the move to e-payments. Unfortunately, the RC has observed that this move is slowing down, as small and medium-sized businesses have resisted using any method other than paper checks. One of the reasons for this resistance is the difficulty small businesses have in finding payment identity data on business partners.
B2B Business Directory
The B2B Directory seeks to change this by providing an “open, universal industry utility” that supports all payment types and enables small and large businesses to look up the payment identity easily of any organisations that they are trying to pay. The directory will also help market participants obtain quality remittance data.
Additionally, the directory will help to even the playing field. One of the key reasons small and medium-sized businesses are lagging behind on electronic payments adoption is that they lack the technology resources that their corporate counterparts have.
Those working on the project stress that the B2B Directory is not a payment mechanism, it’s an information utility that allows me to find out how to pay somebody. Organisations would continue to use whatever payment method makes the most sense for them.
The Remittance Coalition plans to issue a whitepaper about the B2B Directory by the end of June 2014.
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