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Wired Efficiency

Fedwire and CHIPS finally seem ready to address the problem of attaching remittance information onto wire transfers

By Richard Gamble | Updated on June 01, 2007

Like most treasurers, Debbie McSheffrey, treasurer of Atlanta-based Premiere Global Services Inc., can tell you: While sending money by wire turns out to be the fastest way to move money, it also turns out to be the slowest–and most imprecise–way to deliver usable remittance information. Applying wire payments is extremely manual and error-prone, notes McSheffrey, who is a member of the payments advisory group of professional organization Association for Financial Professionals (AFP). “It’s a real challenge to figure out what a wire is paying,” she says. “A parent may pay on behalf of a subsidiary. One wire may pay multiple invoices from multiple divisions. Too often we have to call the sending bank or our customer to try to resolve what is being paid, which is a waste of time on both ends.”

And if there is a dispute, the system is even more cumbersome and expensive. When a wire payment is delayed pending investigation, it can trigger a late payment fee or deny a prompt-payment discount, McSheffrey points out. While those penalties could be reversed, that requires even more manual intervention, she adds.

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