Digitalization and innovation are driving change and evolution in the payments ecosystem. And while consumers have embraced new technologies for conducting payment transactions, opportunity for businesses to leverage this momentum toward modernization remains.
For businesses to realize the benefits of modernized business-to-business (B2B) payments, there must first be a path or framework for businesses to send, receive and automate electronic invoices (e-invoices) and electronic remittance (e-remittance) information. This is a crucial moment for the payments industry, as businesses not only recognize the potential of an exchange framework to modernize B2B payments, but are coming together to make this digitalization a reality.
To lay this foundation, the Business Payments Coalition (BPC), with support from the Federal Reserve, recently launched a market pilot to build and test an electronic e-invoice exchange framework, that will enable business in the U.S. to exchange electronic invoices across all payment types, using their current accounting system. In parallel, the BPC and Fed launched the Remittance Delivery Assessment Work Group to assess whether the exchange framework can facilitate electronic delivery of remittance information.
Together, these efforts offer a meaningful path toward in-market solutions to address long-standing pain points in the B2B payments industry.
An electronic exchange framework is a set of standards, policies and guidelines that enable businesses to connect once, and exchange with anyone on the exchange framework, independent of their platform, system, or application. There are common prescribed industry standards to ensure interoperability and the framework creates the ability for businesses to send and receive invoices, payment, and remittance information with one another across an expansive network.
This frictionless framework supports all payment types and addresses efficiency challenges caused by the manual processing of invoices and remittance information. This framework also allows businesses to modernize with minimal change to their accounting systems.
Explore the third and final video in our educational series for an overview of a virtual exchange framework, which may be the solution for businesses to automate e-invoices and e-remittance information.