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Paper Still Reigns in Remittance

Companies are more concerned about posting payments the same day than establishing straight-through processing. (Nancy Atkinson of Aite Group)

By Shaunacy Ferro | Updated on July 30, 2012
Though straight-through processing (STP) is often held up as the standard for handling payments and the related remittances, companies are much more concerned about receiving remittance information in a timely manner than in setting up STP practices, according to a new study by Aite. The research and advisory group surveyed 240 companies about when and how they received and sent remittance details on business-to-business payments.

“[Straight-through processing is] not something companies are demanding,” says Nancy Atkinson, a senior analyst at Aite and co-author of the study. “When the industry gets to point where more than 50% [of remittance information] comes to them at the same time as the payment, then they’re going to start to demand straight-through processing.”

Aite estimates U.S. companies send 15.5 billion remittances a month. But the survey shows just 10% of remittances accompany payments and use a standard format, elements that would pave the way straight-through processing. In fact, according to the survey, more than 40% of remittances require some operator intervention.When asked the factors they consider when choosing a remittance channel, only about a third of companies said being able to process payments in a straight-through manner was very important to them, while 78% said that timeliness was extremely important.

Standardization continues to be a challenge for STP, Atkinson says, especially at smaller companies.

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