Canright Financial

Market and Regulatory Changes Prompt Investment Policy Review

June 9th, 2014 by Canright Communications

The continued low interest rate environment, ongoing regulatory reform and record stockpiles of corporate cash have contributed to a renewed focus on the investment policy process. While most large companies have an investment policy statement to help guide their cash investments, many privately held or smaller firms may not. It is considered best practice for companies to implement one.

Read the entire article here.


Taking on International Supply Chain FX Risks

June 2nd, 2014 by Canright Communications

As the US economy continues to strengthen, many treasury teams are wisely reviewing established payment practices to allow them to take full advantage of new growth opportunities. A US company that has taken the time to explore and implement finance and treasury processes that work best with international suppliers and customers will have greater opportunities to maximize rewards and gain a competitive advantage.

Read the entire article here.

A Straight Path to Receivables Reconciliation

May 27th, 2014 by Canright Communications

Though straight-through reconciliation for receivables (STR) may often present more of a challenge than straight-through processing for payments (STP), recent advances in regulations, electronic payments acceptance and paper-to-electronic (P2E) conversion, allow companies to move rapidly toward the STR ideal. Many are now looking to achieve rates of success similar to what they have achieved with straight-through processing for payables.

Read the rest of the article to learn more about STR and its benefits.


The Popularity of Plastic Payments

May 4th, 2014 by Collin Canright

The future of payments may well reside on mobile devices, but today’s mobile payments consist of the plastic cards in your pocket or purse. Card payments now make up more than two-thirds of all noncash payments, according to a new report by the Federal Reserve.

In the same vein, my last several articles for Independent Banker magazine have dealt with the following card topics:

Profitable prepaid cards remain mostly elusive, but their potential still glimmers
Prepaid card use is soaring, and the checkless account cards are expected to help banks attract millennials and other underbanked customers. As of now, however, prepaid cards are not providing easy money to many community banks.

Four principles of the top-producing credit card programs
Community banks with highest producing credit card lending programs keep cardholders close to home. They also tend to use their card programs as part of their overall relationship-building activities, in many cases offering simple, stripped-down programs that solidify their customer relationships and their community bank brands.

Making the most of your card program year round
Community banks with successful credit and debit card programs plan their success. They understand that getting customers to use their cards consistently requires more than the occasional statement insert or special event promotion.

Vendors Promote International, Echeck Payment Options at IRCE

June 13th, 2012 by Canright Communications

My conversations with epayments exhibitors at the Internet Retailer Conference & Exhibition (IRCE), held June 5-8 in Chicago, brought two ecommerce payments themes to the fore: international payments and echecks.

The first seemed natural to me, as ecommerce frees retailers from geographic boundaries.

The second theme, the promotion of the echeck as a payments mechanism, surprised me at first, given that the technology is hardly new. It also delighted me because I prefer echecks to credit or debit cards as a web-based payment mechanism and do not find that it’s often available.

I did not make a complete tour of every payment vendor at the show, but here’s a rundown of the vendors I visited and conversations we had.

International Payment Options

When I mentioned to Allyson Stramotas, a marketer for Digital River, that a number of vendors were talking to me about international payments, she assumed I must have heard a lot about China. I had not, though I later found in my conference bag a card presenting the statistics for Alipay, China’s leading third-party electronic payment service. Geographically, a number of vendors pointed out their capabilities for Latin America in general and Brazil specifically.

For instance, Cobre Bem, based in Brazil, provides a PCI-compliant gateway to Brazilian and Latin American banks, providing connections to more than 80 different financial institutions and bank card organizations in Latin America. For its part, Digital River World Payments covers Latin America and Asia in its white paper “Online Payments in the BRIC Countries.”

Other international payments processors I talked to included Moneris Solutions, a joint venture between Royal Bank of Canada and the Bank of Montreal, which partners with BMO Harris in the United States. Moneris provides a whole suite of payment options, including loyalty programs and echecks, for retailers. They stressed the completeness of their solutions across all needs, from store to web to company accounting.

Payza and Order Bridge showed payment platforms. Payza, with an international gateway, presented an ewallet service that can be loaded through bank transfers, wires, credit cards, and other means, allowing you to both make and receive payments. Order Bridge seeks to make it easier to integrate a wide variety of payment, risk-management, and transaction tracking options into a merchant’s website.

2CheckOut exhibited its online payment processing service that integrates a merchant account and payment gateway in a single package, another way of making it easier for retailers to accept online payments. The 2CheckOut shopping cart seeks to open retailers to international customers by presenting international currencies upon checkout, which also supports 15 different languages. It does not require shoppers to create a separate payment account.

Several other vendors emphasized supporting international payment and currency options directly on a retailer website. JCB, a Japanese payment card, wants merchants to accept the card and display its logo on their websites and in their stores. “Japanese consumers love American goods,” said sales rep Charles Spatola. Providing a payment option they know and use will increase the likelihood of making the sale.

Planet Payment made a similar case for international currency support. The company provides in-store and ecommerce payments processing in international currencies so that shoppers can use their local credit cards at a store’s point of sale or see their currency symbol on the website. They receive a guaranteed exchange rate upon checkout, and Planet Payment ensures that it’s lower than other options, as a reason for the customer to buy more goods at the foreign exchange rate.

PacNet Services Ltd., however, impressed me with its comprehensive international payments processing. They did it with the most impressive piece of collateral from an educational point of view: the World Payments Guide 2011, a 720-page reference book and online guide to banking systems and consumer payments in every country in the world, including an explanation of PacNet capabilities.

Echeck Options

The cost of payments filtered into the general media last year with the Durbin Amendment, which directed the Federal Reserve to place limits on the fees banks can charge for debit-card payments. For many years, credit- and debit-card processing fees have been roughly the same for retailers, regardless of who does the processing.

I believe that the increased promotion of echecks, an option that has been around for seven years, is driven in some way by today’s post-Durbin environment, in which transaction processing fees are no longer a standard three-plus percent. Electronic checks, which process as low-cost ACH transactions, provide lower transaction costs and can provide yet another option for consumers.

First Data argues as much in the latest version of an echeck white paper, which the payments processor provided at IRCE, “Electronic Checks: The Low-Risk, Low-Cost Way to Accept Online Payments.”

ACHFederal stressed the low cost and customer convenience of echecks. I agreed, as I prefer to pay by electronic check when it’s offered by a merchant, which it generally is not.

Payment fraud also arose as a topic of conversation, especially at the Authorize.Net booth. The company’s parent firm, CyberSource, estimates that merchants lost some $3.4 billion to fraud in 2011.

Finally, my favorite payments vendor of the show was Wipit, a service that allows online merchants to serve people without bank accounts (generally known as the “unbanked”). Unbanked customers use mobile devices that they load up at currency exchanges and mobile phone stores, explained Ian Williams, manager of business development.

Wipit allows them to open an account that they can add cash to in the same way. When they buy on the web, they choose the Wipit icon and pay from their Wipit account. The company has received a lot of attention since its founding in 2010, in part following FDIC concerns for the unbanked.

Whether it’s accepting cash, international payments, or echecks, the vendors face a common challenge: getting their logo for their payments option on a retailer’s website. That, in turn, depends on whether retailers believe that they can use payments channels to open new markets, increase sales to existing customers, or make paying at online checkout so easy that the customer rarely abandons the transaction.

Electronic Toll Collection Gets Easier

June 4th, 2012 by Canright Communications

Since August 2008, I have made at least one annual road trip from Chicago to New York state. Last week, my wife and I made our last drive to New York to see our daughter graduate from Bard College.

When we got to the New York State Thruway, I pulled into the cash-only lane, only to find that my Illinois I-Pass electronic toll transponder paid my fare. I don’t recall that ever happening. I remember that on the last trip, I pulled out my cash in New York, as I had done in Ohio on our first trips.

On this trip, it was electronic toll collection from end to end, beginning at the Chicago Skyway, to the Indiana Toll Road, across Ohio on its turnpike, and then into New York. (We took the northern route this time and skipped the Pennsylvania Turnpike, which is considering a plan to move to all-electronic toll collection.)

All of those states are now members of E-ZPass Group, an association of 24 toll agencies in 14 states. E-ZPass says it’s “the world leader in toll interoperability, with more than 22 million E-ZPass devices in circulation.” The E-ZPass usage statistics show a nearly 22 percent increase in E-ZPass transactions from 2005 through 2011. E-ZPass is not a universal electronic toll collection system, however.

From a consumer point of view, system interoperability (in this case, the ability to use one system on multiple toll roads) is wonderful because it saves time with faster toll paying and decreased traffic congestion. “E-ZPass has shaved at least seven billion traffic-jammed hours from our collective lives,” writes David Segal in a May 19, 2012, New York Times article. The U.S. General Services Administration, in its electronic tolling portal, adds that the systems also “increase fuel economy and reduce vehicle emissions by reducing the time spent in lines at toll booths.”

As in many areas of epayment, the U.S. may have spawned the technologies first but adopted them later. I recall the first electronic tolling system I came across when driving outside of Toronto, Canada, back in 1998. There is a decent, if uneven, overview article on electronic toll collection, its uses, and history across the world on Wikipedia, which also has an article covering the history of E-ZPass. For information on electronic toll technologies, visit Transcore, one of the world’s largest providers of electronic toll collection and other transportation systems.

There are problems, of course. Segal’s article carries the title “Trouble at the Tollbooth”. It focuses on a $50 E-ZPass fine that a woman received in the mail. She thinks the fine is unfair, and she doesn’t appreciate the company’s tone one bit.

We experienced something similar, though it resulted only in inconvenience. We did not have our I-Pass transponder once while driving the Indiana Toll Road and accidentally got in the wrong lane. Although we were able to pay by debit card in the noncash lane, the instructions on the card reader were vague and required a call to the toll attendant, who had to manually enter my debit card number into her terminal and raise the gate for us.

In addition to interoperable transponder-based systems, multiple and reliable methods of epayment at toll booths will be required to make toll payment even faster and easier.

Wallet Wars in the Streets of Chicago

March 10th, 2012 by Collin Canright

There is a war going on for your wallet. The combatants are credit card companies, banks, and tech companies both established and emerging. Until recently, most of the operations were covert: contracts, alliances, M&A, and other business activities that by and large go unnoticed by the general public.

The war is now spilling onto the streets of Chicago. From cabs to trains to restaurants to bus stops, there are early signs of emerging epayment technology adoption, with plenty of territory where epayment solutions are desperately needed. All the while, the largest epayments players with pockets deep enough for advertising campaigns are battling for public mindshare.

Read the rest of the article in the March issue of Transaction News (p. 5). Much of the article first appeared as Built in Chicago blog posts.

What’s your experience with epayments? Let me know.

Wallet Wars in Chicago

February 5th, 2012 by Collin Canright

MOBILE PAYMENTS: P2P EPayment and Mobile Wallet Ads Battle at the Bus Stops

If you’ve walked up State St. in Chicago’s Loop or along the Magnificent Mile on north Michigan Ave. you’ve likely seen Citi’s ads for Google Wallet. They’re on about every other bus stop.

If you’ve been at the bus stop on the northwest corner of State and Madison, you may have noticed that Chase’s ad for its QuickPay personal-to-personal (P2P) payments faces the inside. . .

Chase Person-to-Person QuickPay Ad

while Citi’s ad faces the outside.

Citi Google Wallet Ad

If it’s really a battle for mindshare, Citi and Google are ahead through sheer quantity. I have only seen one or two of the Chase ads, compared to dozens of Citi ads.

The approaches are very different as well, as are the applications. Citi’s charges a Citi credit card through Google’s mobile phone wallet technology while Chase’s debits a Chase bank account. Citi’s can be used for purchases at the point-of-sale (if supported) while Chase’s is designed to pay an individuals that have email addresses.

Convenient for consumers and the ability to demonstrate how an approach makes all types of payments easier will, in the end, determine which approach consumers adopt. If the advertising is any indicator, however, Citi-Google will win not only the battle for mindshare but the war for consumer adoption.

For a perspective on how easy, or not, it is to use Google Wallet, read “Tapping Spree: How to Spend $100 With Google Wallet.” For an overview of which company will win the wallet wars and under which conditions, read “The battle for Mr. Costanza’s exploding wallet.”

First Square

February 2nd, 2012 by Collin Canright

MOBILE PAYMENTS:  A Chicago Cabbie Collects Credit-Card Fares with Square

Square, a mobile payments firm, became one of last year’s major epayments success stories. I read a lot about the firm, founded by Twitter co-founder Jack Doesey, over the past year, but I had never seen one of the devices in action until a week ago.

I gave my credit card to a Chicago cab driver, as I often do, with some trepidation because cabbies used to hate accepting the cards. This one pulled out his iPhone, fitted with a Square device and app, and swiped my card.

It was before 6 in the morning, and it woke me up. He handed me his phone so I could authorize the transaction, and off I went.

Undoubtedly, he uses Square because he collects his fees and tips faster than he does when he uses the POS device in the cab. Possibly, he also saves a cut to his tips taken by the cab company, as they do in San Francisco.

In any case, it’s a great example of how epayments are increasingly personal and how, yet again, internet and mobile technologies shift power to individuals over institutions.

Square Up

The P2P Payment Challenge

December 16th, 2011 by Collin Canright

This photo of the menu at Silver Spoon, the Thai restaurant in Chicago that my wife and I ate at this evening, tells a good bit of the person-to-person (P2P) mobile payment story:

Limit 2 credit cards per check please.

As survey after survey has shown over the past two years, debit cards are the fastest growing means of payments. As fewer people carry much cash, restaurants are faced with multiple debit and credit cards to settle checks.

Sliver Spoon apparently has had enough. Cashless patrons can always handle it the way writer-researcher James Richter and his buddies do: play credit-card roulette.

Clearly, person-to-person (P2P) payments are a problem waiting for an elegant solution.