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insights

The Power of Payment Information

A summary of why the data attached to a payment is just as crucial as the money itself, enabling reconciliation, informing management, and creating business efficiencies.

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Why Information Matters

• error
  Prevents "Beneficiary unable to apply" scenarios, where payments are returned due to missing context (e.g., no invoice number).
• security
  Aids in detecting financial crime by allowing PSPs and law enforcement to analyze payment patterns for suspicious activity.
• business_center
  Ensures smooth business operations by allowing companies to correctly account for incoming funds without manual investigation.

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Data Flows & Channels

• person
  Individuals: Typically receive information via online/mobile banking for real-time updates or traditional paper statements with a time lag.
• corporate_fare
  Organizations: Use automated channels like APIs, SWIFT, or Host-to-Host connections to feed data directly into their ERP systems.
• construction
  The goal for businesses is to automate as much of the information processing and reconciliation as possible.

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The Rise of Enhanced Data

• code
  Driven by new standards like ISO 20022, allowing more information (invoice details, purpose codes) to travel with a payment.
• monetization_on
  Creates commercial opportunities by providing valuable data that customers are willing to pay for to improve their processes.
• gpp_good
  Requires careful handling to comply with data protection laws like GDPR and to prevent misuse (e.g., sending abusive messages).

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Reconciliation Explained

• calculate
  The process of matching incoming/outgoing payments on a statement to internal records to understand the true cash position.
• smart_toy
  Large companies use automated software that matches payments using data like an invoice number.
• engineering
  Human intervention is only required when a payment fails automated reconciliation due to insufficient information.

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Management & Efficiencies

• trending_up
  Timely information helps management create forecasts for cash, sales, and spending.
• av_timer
  DSO (Days Sales Outstanding): Measures how quickly customers pay. A lower DSO improves cash flow.
• schedule
  DPO (Days Payables Outstanding): Measures how long the company takes to pay its suppliers, maximizing cash on hand.

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Cheques: A Special Case

• visibility
  Controlled Disbursement: Allows companies to see what cheques are being presented for payment each day to manage funding.
• task_alt
  Positive Pay: A fraud detection tool where the company sends a file of issued cheques to the bank for verification.
• rule
  Reverse Positive Pay: The bank sends a file of presented cheques to the company for approval before making payment.