• 
  What’s the problem?
• 
  Where can I find more information (educate myself) on this topic?
• 
  What are the implications for faster payments?

If payments are posting same day or in real time, AR departments need to be prepared to credit customer accounts in a timely fashion. Data contained in the payment also needs to flow into the right areas at the same speed, ensuring that information is not lost or delayed, especially for payments being made shortly before due dates. Updating of reconciliation-related business processes need to take this into account. AP departments also need to be taught that certain payment types, such as same day ACH or instant payments, allow for more flexibility in terms of liquidity management and the need to make payments, which in turn requires corporates to update legacy business processes. Whether a corporate can justify the required system upgrades also needs to be thought through and the degree to which a business case and ROI can be calculated will differ substantially from business to business.

As the saying goes, faster payments could lead to faster fraud. Once funds are sent through any particular faster payments method, the payment is then settled either same day or in real time, reducing the time corporates have to “reverse” or cancel submitted payment messages. Corporates must weigh the fraud risk against their processes, including internal security and the user experience they want to provide, among other considerations. Corporates may want to consider implementing a risk- based approach for facilitating faster payments for their end users to mitigate the risks. Things to consider include how well the end user is known to your organization, size of the transaction and/or volume of the activity by the user, historical performance of the user, etc.

The combination of faster payments (i.e. same day or even real time) and irrevocability, make corporate authentication processes very important. Ensuring that only trusted individuals have access to authentication tools is very important when using systems that can send upwards of one million dollars and that are irrevocable once submitted. Corporates will need to update ERP systems to ensure that only certain individuals have the ability to initiate and authenticate payments that are above a certain threshold, which will differ from business to business.

Pre-validation becomes increasingly important when, similar to authentication, payments are irrevocable soon or instantly after submission. Corporates can no longer utilize built-in time windows for faster payments because payments become irrevocable much more quickly, making it even more important that they validate beneficiary accounts prior to making payments.