Cross-Border Chaos

Straight Through Processing Helps Control
Payment Fees

Without question, the payments landscape is changing as an increasing number of organizations engage in the electronic transmission of international and cross-border payments. As these types of payments become more prevalent, the regulations and guidelines established by governing bodies in foreign markets are taking center stage. None has garnered more attention than the European Union's Regulation 2560/2001.

Today, the cost of initiating a cross-border payment within the European Union remains considerably higher than domestic payments. In some cases, 100 times more expensive to be exact. To add insult to injury, most corporate clients are given very little insight into the costs of cross-border transfers. Through its research a few years ago, the European Union determined that the cost discrepancy was hampering cross-border trade and "constituted an obstacle to the proper functioning of the internal market."

Putting these cross-border payment fees into perspective, think of it like this: You are charged one price to make a payment within the state of New York and a second price — about 100 times more expensive — to make the same payment to an entity in New Jersey.

To alleviate the situation and make it faster, cheaper and more reliable for corporate clients to make cross-border payments, the European Union passed Regulation 2560/2001. This mandates that all EU cross-border credit transfers up to 12,500 Euros* (approximately $15,500 USD) must carry the same charges as Euro payments made within an EU member state.

STP Delivers More Efficient, Lower Cost Payments
Faced with the enforcement of Regulation 2560/2001, banks have responded with tiered pricing models based on Straight Through Processing (STP). In order to receive the mandated lower pricing, corporate customers must provide clean, pre-validated payments instructions complete with IBAN (International Bank Account Number) and BIC (SWIFT Bank Identifier Code) identifiers on their invoices.

A secure, Web-based payments automation platform, WebSeries® from Bottomline Technologies offers the functionality and ease-of-use necessary for corporate clients to improve STP capabilities. By empowering users to submit pre-validated cross-border payment instructions, complete with the requisite IBAN and BIC codes, WebSeries is helping Bottomline's corporate customers to operate in a more cost-effective and efficient manner.

In the future, we can expect to see new regulations and guidelines emerge that will further alter the payments landscape. In some cases, corporate users may need to be proactive in order to capture the benefits of various mandates. With a flexible and scalable solution such as WebSeries, corporate users can place themselves in a position to capitalize on these opportunities.

For more information on how WebSeries can help your organization take advantage of the lower cross-border payments-related charges as mandated by Regulation 2560/2001, visit our website or contact your local Bottomline solutions representative.

* In January 2006, this amount increases to 50,000 Euro, effectively covering about 85% of all EU cross-border payments.