The word “remittance” is a broad term used in the financial industry. Remittance usually refers to money that is sent or transferred to another party as payment for goods or services or foreign transfers (inwards or outwards) to and from individuals in other countries.
It is derived from the word remit, which means to send back. A remittance can be sent via electronic payment, wire transfer, mail, draft or check.
When it comes to payment processing, the word “Remittance” is primarily described as a mailed in payment towards goods purchased or services rendered.
A remittance processing system is an automated system that handles and processes your mailed in remittances/payments (checks, stubs, list payments, etc.). It is designed for medium to large sized organizations who process large volumes of payments and employ technology to accelerate the handling, processing, and end of day activities.
A remittance processing system is generally composed of two primary components:
– Hardware:
Mail-Opening Equipment
Scanners (Transport) – The transport that will scan and capture images of your remittances
– Software
The platform that “processes” the images scanned through the transport and allows users to validate/process and update your billing system, CMS, etc.
The hardware or more specifically the scanner and the software are the two big components of any remittance processing system, allowing users to automate the handling and thus accelerate the processing of payments.
An ideal remittance system should be scalable and conveniently fit any sized organization, irrespective of whether they process 200 payments or day or 20,000+.
Despite the fact that more and more consumers are moving to alternate means like online credit cards, e-checks etc. for making payments or donations; a good percentage of companies and government agencies continue to process only check payments even today.
Here’s a peek at the different components of the remittance process and what they do.
Hardware:
Mail Opening Equipment:
If you are processing mid to high volumes of remittances, you may need a mail opening transport that simplifies the extraction of mail. Traditionally stacks of mail are placed on the unit and passed through a channel that slices the envelope open (approximately one to three sides) allowing for easy extraction by operators.
Extractors vary from simple to complex capabilities in terms of human intervention required and also the ability to handle varying types of remittances (envelope size, thickness, etc.)
Our vote goes to:
Model – Opex Model 72 (Ideal for medium to high range environments)
An automated opener and extraction machine, the Model 72™ is designed to increase the
efficiency of the extraction process by reducing the total labor needed for the process. With various features including precise milling cutting technology, measurable operator productivity etc., the Model 72™ is designed for superior precision.
Scanners:
When it comes to scanners, there are a great variety of compact to high-volume transports available in the market today ranging from footprints as small as a book to some as large as a bedroom.
Transports vary in speed, image capability and quality, along with add on features such as pocket size, document size and thickness processing capabilities.
These features and functionalities contribute to a more optimized workflow. For example, if you do not have a transport that produces high quality images, your software platform may be unable to process those payments accurately, leading to a high error in read rate. Low quality image captures may also not meet banking imaging requirements if you elect to electronically deposit your funds. (Check 21).
When identifying a transport that best fits your needs, here are a few things you need to consider:
– Volume (peak/non-peak periods)
– Deadline Times (Do you have department/bank deadlines?)
Features and functionalities you should consider when looking at hardware transports:
– Speed – How many DPM (docs per minute) can the transport process?
– Image Quality – What is the type and quality of image that the transport produces?
– Cameras – The availability of front and/or back cameras? Ask what suits your needs best.
– Pockets – Does the transport have pockets? Do you even need them?
– Support – What type of hardware support is available? What is the response time?
– Compatibility – What remittance software is it compatible with the transport?
Our top favorites here include:
Model – Canon CR 190i II
Combining accuracy and speed with impeccable scanning quality, the Canon CR 190i II is designed to handle a large number of documents including envelopes, vouchers, coupons, checks etc and is ideal for banks or retail businesses
Ergonomically designed, the Canon CR 190i II is what every business needs if it’s looking to reduce downtime and increase output.
Model – Opex Falcon+
Considered the universal document scanner, the OPEX Falcon combines one-step drop feed scanning with high capacity performance making it the only universal scanning workstation.
With fast, accurate and high quality images, the OPEX Falcon works best at reducing downtime and maximizing productivity.
Model – Opex Falcon RED
Among the most recent Check Scanning Transport to be introduced into the OPEX line, the Falcon Red is an all-in-one machine that allows you to open, extract and scan at one go.
The Falcon Red combines the speed and user friendly features of the OPEX Model 72 with the latest document scanning technology.
Software:
It can be said that software and hardware go hand in hand and without one the other cannot work effectively or optimize your investments. Each part of the platform contributes to the whole and is critical to creating a more efficient process.
Efficient software is designed to work with a variety of transports making it scalable regardless of your payment processing volume. Think of the software as the intake valve that absorbs all the images and information captured on your hardware transport.
Payment information is pushed through to the “brain” and goes to work, processing, reading and cross validating your information with the images. Some systems on the market today can offer real time validation to your host’s billing/CMS system in order to validate your customer payments in real time.
As opposed to traditional operators who would have to manually validate customer payments, fully automated technology used to its full advantage helps in labor savings. Remittance Processing softwares were designed to automate handling by limiting the number of payments that require actual validation.
Validating only about 15-25% payments of their daily mailing have in fact allowed departments within various organizations to utilize resources better and maximize their investments.
Now, not all systems are the same, though in theory, all software providers provide the same solution. They automate remittance processing by utilizing technology. However, what distinguishes one platform from another would be the unique features embedded into its design to increase and optimize workflow, minimize human error and integrate seamlessly with other systems to maximize productivity.
All companies do not operate in the same manner; environments may be unique or have processing policies and procedures that can make one business environment a little more complicated (policies and rules pertaining to late payment handling, late fees, check only, closed accounts, etc. are different for different businesses).
The most efficient software platforms should seamlessly work within your own unique environment while helping to eliminate waste and error, optimize throughput, reduce downtime and accelerate access to funds.
When identifying remittance processing software solutions and providers, here are a few things to consider:
– Can it process hot files?
– How are your business specific processing rules handled?
– How are e-check reports handled?
– How can check only payments easily be reconciled?
– How does it handle penalty and installment payments? Or can it calculate late or penalty fees?
– Can it do real-time account lookup to our billing system?
– Can it handle different payment types?
– Can it meet my deadline of the same day deposit?
– Is it Check 21 ready?
– How does it handle exception payments?
– What capabilities do they have in order to incorporate special processing rules?
– What is their support like? What is their response time?
– How easily does it update payments?
– Does it have a tool to easily refund and reject payments?
– Can it process wholesale documents or list payments?
– How to access archived information?
These are all variables and questions to help you think about specific details that may apply to you when looking for remittance solutions that best fit your needs. At the end of the day it is the unique features of software platforms to minimize verification, optimize labor, accelerate daily operations with improved accuracy along with increased efficiency that makes certain platforms stand out more than others.
The right combination of hardware and software should create a full-service automated environment where the system works for you and not the other way around.
To see a diagram on a remittance processing flow, click here.
For more information about Remittance software click here.
If an In-House system is not for you and you’re looking for a service instead click here.