Beneficial changes for business-to-business (B2B) payments have increasingly emerged in light of COVID-19, driving an evolution to embrace digital payments for their flexibility and ability to meet on-demand culture. Indeed, the time for digitalization is now and there is growing desire to bridge disparate payment systems while minimizing change requirements for corporates.
Committed to advancing the U.S. payment system, the Federal Reserve has supported this momentum as a key opportunity to make significant progress towards modernization. By partnering with industry organizations like X9 and the Business Payments Coalition (BPC) (Off-site), among others, the Fed is actively collaborating with stakeholders to achieve the benefits that modernization can enable, such as improved efficiency and opportunities for innovation. To realize this vision, a key initiative dedicated to advancing B2B exchange of electronic invoices is underway and gaining ground.
E-invoicing Makes Strides Forward
One of the first steps to achieving ubiquitous B2B electronic payments in the United States is establishing a standard way to send electronic invoices between businesses. The e-invoice exchange framework, imagined and championed by the BPC, is a way to do just that. To make this concept a reality, the Fed and BPC, along with a number of industry stakeholders, are collaborating to establish this exchange in market.
Recently, the BPC achieved a major milestone within the program with successful completion of a proof of concept (POC) (Off-site) for a federated registry services model of the U.S. e-invoice exchange framework. This model would enable authorized administrators to register and onboard businesses into the network – similar to qualifying new addresses for an email system. Specifically, when built out, this network will enable businesses of all kinds to exchange e-invoices with one another by establishing a secure, open e-invoice delivery framework between providers. The success of the POC demonstrated a path forward for creating an e-invoice exchange framework and marked a significant step towards automating B2B invoice exchange in the United States.
Building on this success, an in-market pilot program is planned for early 2022, to test the exchange of e-invoices between businesses by establishing a secure, open e-invoice delivery framework between providers. This pilot will offer the ability to see how an innovative electronic invoice exchange can streamline businesses’ payments processes and result in downstream benefits such as costs savings, increased transparency, and risk mitigation.
To catalyze this innovation, interested stakeholders will be needed to develop and test the open-source tools and access points to be used in the pilot. Following that development activity, participants will be needed to pilot exchanges within the e-invoice exchange framework. Exciting progress lies ahead, as this pilot will put the industry’s work into practice and mark a major milestone for developing the network needed to modernize business payments and bring greater efficiency across the United States.
This momentum and industry enthusiasm for ongoing collaboration are bringing notable advancements in B2B payments modernization. Be a part of that progress by staying informed and getting involved with the work. You can do so by continuing to visit FedPayments Improvement, signing up to join the FedPayments Improvement Community (select “E-invoicing” and “Electronic Payments and Remittance” under the interest preferences) and checking out the Business Payments Coalition (Off-site) to learn more.