Electronic Remittance Information

A key step toward modernizing business to business (B2B) payments involves achieving widespread adoption for businesses to exchange electronic remittance (e-remittance) information – or details about a payment – with each other. This is a challenge as remittance information is often sent in an unstructured format and is detached from the delivery of the payment.

The Federal Reserve is collaborating with the industry, including the Business Payments Coalition (BPC) (Off-site), to reach widespread adoption of the electronic exchange of remittance information between businesses.

An image of a digital network emerges on a mobile phone

Until now, the retrieval of remittance information has been a largely manual process. However, momentum is building to solve this issue, promote adoption of e-remittance data and modernize the B2B exchange of information. Service providers, payment networks, industry organizations and financial institutions can amplify this momentum by getting involved in new initiatives aimed at replicating the collaboration on e-invoicing to design industry solutions for e-remittance information.

While the remittance solutions landscape is still evolving, e-remittance capabilities play a strong role in reducing payment application costs and improving overall efficiency. All companies, regardless of size, can benefit from the modernization of remittance information to help reduce payment application costs and improve efficiency.

One of the key steps to achieving ubiquitous B2B electronic payments in the United States is establishing a standard way to send electronic invoices (e-invoices) and e-remittance data between businesses. An exchange framework, imagined by the BPC, is a way to do just that. This framework allows for improved payments efficiency by transforming processing of B2B payments from a fragmented, multi-step process to an automated one that, ideally, achieves straight-through-processing. The infographic below details how exchange frameworks allow for the widespread exchange of e-invoice and remittance data.

The Ideal State: E-invoice and E-remittance Exchange Framework

Get Involved

Many organizations are currently involved in advancing e-remittance capabilities. The X9 ISO 20022 Market Best Practices Work Group is researching and documenting best practice recommendations for preparing for ISO 20022 usage in the United States. The result will be a U.S. ISO 20022 market guide for implementing remittance information using the ISO 20022 standard (Off-site).

In addition, a Remittance Delivery Work Group will be established later this year to assess the e-invoice exchange framework architecture. The goal is to understand if it can enable electronic delivery of remittance information, supportive of all payment types, broadening the capacity for different businesses to exchange e-remittance information.