A Champion's Guide to the Business Payments Coalition (BPC) - What Is BPC and How Can It Improve Your Business Operations?

The Business Payments Coalition (BPC) is a group of organizations and individuals working to make straight-through B2B e-payment in the USA more efficient.

The traditional paper-based B2B payment processing (such as issuing checks) is inefficient and exposes businesses to risks. For this reason, electronically paying B2B payees have emerged as a more efficient and secure alternative to paper-based systems.

However, as many U.S. businesses still favor traditional options, B2B electronic payments adoption currently is low. The Business Payments Coalition was formed to help change that narrative.

This guide will tell you all you need to know about the BPC, including what it is doing to change the narrative and increase B2B electronic payments adoption.

Specifically, we'll cover:

  • What the Business Payment Coalition does;
  • The goals and objectives of the Business Payments Coalition;
  • How the Business Payments Coalition helps businesses;
  • Resources that the Business Payments Coalition provides to businesses;
  • How to join the Business Payment Coalition;
  • History of the Business Payments Coalition.

Let's get started!



What does the Business Payments Coalition do?

Everything the Business Payments Coalition (BPC) does is geared toward making electronic B2B payments more efficient to increase the adoption of these payment options over the traditional paper solutions (checks, remittance advice, and invoices).

Basically, the BPC identifies and addresses the barriers to electronic B2B payment efficiency, as these are also barriers to adopting electronic payment options.

What the BPC does to address these barriers fall into the following categories:

  • Provide education on e-payments;
  • Create new solutions for trading partners;
  • Make I.T. resources more accessible;
  • Create standards on e-payments.

1. Provide education on e-payments

One barrier to the adoption of e-payments is a lack of education about the how-tos or benefits of these options.

To overcome this barrier, the BPC provides different educational resources to help businesses become more familiar with the more efficient electronic payment choices.

For example, the Coalition publishes "how-tos" on e-payments, providing practical advice that helps businesses adopt e-payment choices. The Coalition also publishes articles and hosts events that highlight the benefits of B2B e-payment over paper alternatives.


2. Provide new solutions for trading partners

Another barrier to the adoption of electronic B2B payments is that very few solutions are scaled toward smaller businesses that make it easy to adopt the e-payment choices.

To overcome this barrier, the Business Payments Coalition provides solutions that make it easy for trading partners to use e-payment options. An example is the B2B Directory which reduces the time, cost, and complexity of obtaining necessary payment information when making electronic payments.


3. Provide I.T. resources

Another barrier to adopting electronic B2B payments is that many businesses lack the I.T. resources needed to support their use.

The Business Payments Coalition addresses this barrier in different ways. One way is to make third-party I.T. vendors more accessible to businesses that may lack I.T. resources of their own to implement electronic B2B payments. Another way is to promote the adoption of e-invoicing in the U.S.


4. Create standards on B2B e-payments

Another barrier to electronic B2B payments which the BPC identified is a lack of standards. There are different formats, and particular formats are used in such different ways that it is difficult to exchange e-remittances and e-invoices readily.

The BPC overcomes this barrier by developing standards that define common business processes. The B2B has published a glossary that provides a common language in B2B e-payments, a "best practices" document that benchmarks practices that can lead to efficiencies, and other standardization resources.



Business Payments Coalition goals and objectives

The overarching goal of the Business Payments Coalition is to make B2B electronic payment more efficient across the end-to-end process (that is, from invoicing to payment and reconciliation).

To achieve this goal, the BPC actively addresses the problems that make it difficult for businesses to move from paper-based B2B payments to electronic alternatives.

In line with its primary goal, the BPC strives to achieve the following:

  • Provide B2B e-payments education, helping U.S. businesses know the importance of electronic payments and how to switch to one.
  • Increase the adoption of B2B electronic payments in the U.S.
  • Increase the adoption of electronic methods in exchanging payment information such as invoices and remittance data.
  • Make the end-to-end process (from invoicing to payment to payment posting and reconciliation) more efficient, reducing manual intervention.
  • Make the tech solutions and resources needed to adopt B2B e-payments readily available and easily accessible.
  • Make the standards needed for adopting B2B e-payments readily available.


How does the Business Payments Coalition help businesses and providers?

The BPC helps businesses and providers by providing a host of free resources that increase knowledge of B2B e-payments, improve access to resources needed for adopting e-payments, solve interoperability issues when using e-payments, etc.

List of resources the BPC provides to businesses.

The BPS provides many resources that make it easy for businesses to adopt B2B e-payments. These include:

  • B2B Directory
  • Small Business Payments Toolkit
  • Vendor Forum
  • E-invoicing Adoption
  • Standardization documents/ Technical Reports

1. B2B Directory

The Business-to-Business (B2B) Directory is simply a database of payees, making it easy to find the payee information needed to make e-payments.

The B2B directory is one free resource of the BPC that addresses the shortage of solutions for the easy adoption of e-payments.

One reason checks remain popular despite their many problems is that payers can pay using checks while knowing very little about the payee. Typically, all you need to pay with a check is the payee's name.

But to make electronic payments, you'll need a lot more information about the payee. For example, ACH payments require you to know payee information like bank account number, bank routing number, etc. Sadly, this information is hard to get.

The B2B directory addresses this problem. The database securely holds the payee information to enable B2B e-payments, such as bank account information, payment preferences, and remittance preferences. When you need this information for a B2B e-payment, all you need to do is check the B2B directory.

Thus, the B2B directory makes it easier for U.S. businesses to make e-payments by reducing the time, cost, and complexity of obtaining payment information needed for the payments.


2. Small Business Payments Toolkit

The Small Business Payments Toolkit is an educational resource of the BPC developed to help businesses get familiar with B2B e-payments.



The toolkit was designed for small businesses and the bankers and advisors that serve them. The toolkit provides education on different payment methods, explains the benefits of B2B electronic payments, describes how to pay business payees electronically, advises how to avoid falling prey to payment fraud, and more.

For example, below are some topics and a brief overview of the Small Business Payments Toolkit sections.

  • Payment types explained. This section briefly explains different payment types and highlights their pros and cons. The payment methods discussed are business checks, wire transfers, credit and debit cards, Automated Clearing House (ACH), and Internet Bill Pay.
  • Understanding ACH. This section shines the spotlight on ACH, teaching everything you need to know about the B2B e-payment method. You'll learn why ACH is attractive for small businesses when it makes sense for small businesses to use ACH, things to consider when considering ACH, and more.
  • Fraud prevention and mitigation tips. This section explains the common types of fraud seen with each payment choice and the precautions you can take to protect yourself from them. It also discusses how small businesses can train employees to avoid payment fraud.
  • Introduction to virtual currencies. This section explains what virtual currencies are and highlights their potential benefits and risks.

3. Vendor Forum

The Vendor Forum serves as a venue where software and technology providers collaborate towards encouraging standard adoption to improve B2B payments.

The vendor forum is a free resource of the BPC that addresses the lack of suitable I.T. resources necessary for using B2B e-payments.

Adopting B2B e-payments require I.T. resources. Unfortunately, many businesses do not have the resources in-house and rely on third parties to provide them. This makes the third-party I.T. providers essential stakeholders in the B2B e-payment environment.

The BCP brings these important stakeholders together to form a community with the Vendor Forum. The forum now includes over 90 tech vendors. They meet regularly to offer their input on pertinent issues around B2B e-payments and promote the adoption of new standards in software and tech solutions.


4. E-invoicing Adoption

BPC has compiled a catalog of e-invoicing standards and published guides to spur the adoption of e-invoicing. The BPC is promoting the adoption of e-invoicing solutions among U.S. businesses to drive the use of B2B payments.

One barrier to adopting electronic payments is the inability of trading partners to send or receive payment information such as invoices electronically.

Businesses strive for straight-through processing, which means processing every aspect of B2B transactions (from invoice to payment and reconciliation) electronically, without manual intervention. So, if some elements of the end-to-end process cannot be migrated to electronic form, businesses ditch electronic payments altogether.

Many businesses forget about paying electronically if they have to rely on manual checks to verify payments because they cannot implement e-invoicing.

The BPC resources that spur the adoption of e-invoicing directly help the adoption of B2B e-payments. These include:

  • The catalog of electronic invoice technical standards. This documents the different e-invoice formats in the U.S. and highlights that this creates interoperability issues. The catalog sheds light on the complexity of the U.S.'s e-invoicing environment to help identify a unifying e-invoicing standard.
  • A white paper on U.S. adoption of e-invoicing. It is a known fact that the U.S. lags behind most of the world in adopting e-invoicing. This white paper explores developing and implementing a standard B2B e-invoice processing platform similar to those already developed and used in other countries. It highlights the challenges to adopting e-invoicing and the opportunities for businesses to gain efficiencies, reduce cost, and minimize risk by adopting e-invoicing.

5. Standardization documents/ Technical Reports

The Business Payments Coalition develops standardization documents or technical reports that define standard business practices. Standardization practices solve interoperability issues and make adopting B2B e-payments easier.

These technical reports are available for free through the Accredited Standards Committee x9 and the American National Standards Institute. They include:

  • Retail Debit Balances Best Practices and Procedures (TR-45). This technical report is designed for retail industry members such as accounts payables and account payable practitioners. It aims to standardize the handling of debit balances in the retail industry. Its scope includes account reconciliation, notification guidelines, timeframes, roles and responsibilities of the different parties, relevant supporting documents, etc. Following the best practices will lead to efficiencies, cost savings, improved cash management, and more.
  • Remittance Standards Inventory (TR-44). This technical report catalogs B2B payment remittance standards. It is designed for B2B service providers and similar organizations, furnishing them with unifying standards to facilitate the efficient reconciliation of their payments and remittance data.
  • Remittance Glossary (TR-43). This technical report is a glossary of terms used in remittance exchange. It aims to be a source of a common language in the payment and reconciliation process. It puts everybody on the same page to avoid misunderstanding and incorrect processing when there's miscommunication.
  • Core Adjustment Reson Codes (TR-42). This technical report aims to standardize adjusting the B2B payment amount. It provides the most commonly used adjustment reason codes and an overview of how to use them when exchanging and processing remittance information. Using this report, buyers can easily explain deductions, discounts, and adjustments taken for purchase. Suppliers can also use the report to reconcile payments when discounts or other deductions are applied.


How to contact / join the BPC?

The BPC is a volunteer organization, with members voluntarily joining to support the Coalition's goals.

Interestingly, there is no cost to join the BPC as a member or participate in its efforts. Membership and participation are free to every individual and group.

Joining the Business Payments Coalition starts with sending an email. Send an email to: business.payments.smb@mpls.frb.org. You'll immediately receive a welcome email containing information about the BPC's current initiatives and how to get involved.

Alternatively, you can visit the "contact us" page on the BPC website and fill out the registration form. You will receive a welcome packet (in your mail) with information on actively getting involved.



Conclusion

The BPC is actively working towards increasing B2B electronic payments among U.S. businesses. The Coalition has been promoting B2B payments education and undertaking different initiatives to make B2B payments more efficient across the end-to-end process (including invoicing, payment, and reconciliation).

At Storecove, we recognize the importance of electronic invoicing to adopt B2B e-payments. We've developed e-invoicing solutions to help you seamlessly send e-invoices to business partners no matter where they are.

We'll connect your business to BPC and convert your documents to required formats, ensuring that you're automatically compliant with the latest e-invoicing regulations.

Contact Storecove now for your e-invoicing solution.


A brief history of the Business Payments Coalition (BPC)

The Coalition was formed in 2011 as the Remittance Coalition. It changed to the Business Payments Coalition in 2016 when it broadened its mission from simply facilitating the exchange of remittance information to improving the efficiency of B2B payments across the end-to-end process.

The Business Payments Coalition (BPC) is a group of individuals and organizations focused on promoting greater use of electronic B2B (business-to-business) payments, remittance data, and invoices.

As its former name suggests, in the beginning, the focus of the Remittance Coalition was to facilitate the exchange of remittance information among B2B trading partners.

What caused the organization's birth was the continued preference for checks over electronic payments despite the many problems of the first. For example, business checks are cumbersome, labor-intensive, prone to fraud, and relatively more expensive than electronic options.

Because of these problems, checks reduce efficiency in the payment system and expose businesses to unnecessary risk. In 2011, U.S. businesses stayed loyal to writing checks instead of moving to electronic payments (which were more efficient, more secure, and faster).

A summit was held to determine why checks remained popular and what was slowing the adoption of electronic payments. It was discovered that the answer was the ease or difficulty of sending remittance information along with the payment option.

Sending remittance information along with a check is easy, but sending remittance information along with an electronic payment was relatively complex.

With this discovery, the Remittance Coalition was formed in 2011 to spur the adoption of electronic payments by finding solutions that make sending remittance information with electronic payment easy.

The Coalition later broadened its mission. It moved beyond simply facilitating the exchange of remittance information among B2B parters to improving B2B transaction efficiency. As the Coalition celebrated its 5th anniversary in 2016, it was rechristened the Business Payments Coalition (BPC) to reflect its broader mission.

The Business Payments Coalition is a true model of industry collaboration. It currently has over 600 members from various organizations, including small and large businesses, banks, consultants, software and tech, standards development organizations, etc. They come together voluntarily to actively lend their expertise to the group's efforts, improving overall payment efficiency.


More information about BPC?

Call us on: +31 (0) 20 261 17 91 or send an e-mail to: helpdesk@storecove.nl


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