Payments perspectives A FUTURE-PROOF PAYMENT SYSTEM? While SWIFT, Ripple and others battle it out in one region of RTGS space, treasurers can ask their banks for a different payments mechanism, one also being transformed by FinTech and the blockchain. If cost is an issue, or if your digital business creates a high volume of low-value payments, what about ACH? By Simon Brady. Automated Clearing Houses (ACHs) nies and large corporates. We provide a corporate clients. However, corporates provide domestic clearing at exception- single platform for enterprise-wide pay- can access global ACH more directly via ally low cost and with very high trans- ment needs, whether outgoing or collect- a cloud-based portal such as Tipalti parency and service levels. Because ing payments. There is a lot of cost saving which is a global payment automation clearing is critically important to the effi- when you streamline the platform and service that gives global ACH as one of cient operation and integrity of the finan- provide an enterprise-wide solution,” said its choices of payment channel. These cial system, ACHs are typically classified Abdul Naushad, PayCommerce Founder portals offer a range of integrated ser- as ‘SIPs’ or systemically important pay- and Executive Chairman, describing the vices, including payee registration ments systems and so they are to an initial ambitions of the company. through to invoice processing, tax and extent future-proofed: they will be main- regulatory compliance, remittance, pay- tained and their activities are monitored PayCommerce has come a long way ment issue resolution, fraud risk mitiga- by a governing body, usually the national since then. In April 2017, the company tion, payment reconciliation and payee central bank. announced that it had achieved a mile- reporting. The systems also check that stone of over 100 banking and financial payees are not on any international anti- Most banks do not provide individual services institutions in its consortium, terrorism, anti-drug trafficking, and businesses with the option to send money spanning more than 80 countries. anti-money laundering watch lists prior using the country’s local ACH systems According to the company, “PayCom- to payments being made. but it has long been clear that a ‘global merce enterprise customers include ACH’, a consolidation of the local ACHs seven of the top global banks, 11 of the Choosing this type of system, rather than into some kind of network, could create a top 50 US banks, 14 Global Fortune asking your banks to utilise a different powerful alternative cross-border pay- 500® firms and eight US Fortune 500® channel, means integration with ERPs, ment system. companies. Additionally, the PayCom- accounting and performance manage- merce platform has processed over US ment systems. So the choice is not simply However, with no global ACH standard, $400 billion, consisting of over 300 mil- a new, cheaper payments channel offered and over 26,000 rules that govern bank lion transactions in the last 12 months.” by your banks, it is a fully-featured auto- routing in all the different countries, plus mated payments and remittance system. ever-increasing compliance requirements, Earthport attempts to create such a network in the Blockchain past have failed to make progress. Its main competitor is Earthport, which also claims to be “the leading payment Both PayCommerce and Earthport PayCommerce network for cross-border payments” pro- started out by focusing simply on the viding international ACH payment value-added parts of the transaction To turn cross-border ACH into a rela- capabilities to its consortium bank part- chain: initiation, processing, capture and tively seamless and easy-to-use service, ners, representing cross currency pay- customer service: they did not aspire to banks needed to be able to join a net- ments in more than 60 countries and 25 create real-time, instant payments in work with a single commercial agree- currencies. Like PayCommerce, Earth- competition with other RTGS networks. ment that uses technology to do the port effectively re-intermediates banks heavy lifting for them. PayCommerce is into a global ACH payment system and However, both companies have also one: founded in 2006 it is a global ACH lets banks, money transfer organisa- announced blockchain-based initiatives payment network provider which pro- tions, merchant acquirers, gateways to take their consortium networks to the vides wholesale FX services and a local and newer global payment providers next level, Earthport announced its gate- ACH solution across borders. PayCom- make payments globally on behalf of way partnership with Ripple in August merce says it can save users up to 80% customers or directly to suppliers or 2015, which led to the launch of the on the cost of a payment. global sub-merchants. Earthport Distributed Ledger Hub for “There is a new generation of tech busi- Tipalti multiple ledgers, announced in January nesses that are very global and have a lot 2016. This was designed to provide con- of payment needs, whether collections or The previous two companies provide nectivity to additional distributed ledg- settlements, so our focus in the next few banking services to banks, which can ers as they emerge, all available via a years is on this new generation of compa- then offer an improved service to their single relationship with Earthport. 22 // TREASURY PERSPECTIVES 2017/2018 www.eurofinance.com