Phixius to Help Industry Interoperability
The coronavirus pandemic is an epochal health care crisis, and presents so many other challenges as well, including how to maintain business continuity for sending and receiving payments. Some businesses that largely rely on paper processes and mail for things like purchase orders, invoices and check payments are struggling with AP and AR operations while everyone is working remotely and can’t get to the office regularly to print checks and retrieve mail.
Meanwhile, other companies have already invested in portals or related self-service tools. Portals provide the ability for trading partners to directly provide, and access, these business transactions, typically via a web browser or other secure connection.
While portals pave the way for doing business electronically, a great benefit in the current environment, the proliferation of portals presents other challenges around ubiquity and interoperability.
Nacha, The Credit Research Foundation, and AP Now recently collaborated on a “360 degree” survey of payables and receivables professionals to assess industry benchmarks, practices and perceptions of the B2B invoicing process.
Not surprisingly, responses indicate that the heavy reliance on email, U.S. mail, PDFs and spreadsheets continues to inhibit automation and digital transformation. Portals are great opportunities for improvement, for example, helping buyers streamline invoice receipt. However, the lack of interoperability among the portals means vendors must maintain and execute unique invoice processes for each customer that has a different portal:
- 93% of vendor respondents have customers with portals
- 70% manually enter invoice data into at least one customer portal, and 60% expect that manual data entry will increase in the next two years
- 82% say interfacing with the customer portals requires additional staff time and/or resources
- 9% pay fees to upload invoices to customer portals
One respondent said they have over 400,000 customers. Imagine if even a minority of those customers required interaction with a customer portal!
Meanwhile, B2B buyers are being deluged with duplicate, and misdirected invoices, and cite these issues as major friction points that can potentially delay payment. A lack of upfront communication is the cause. Neither buyers nor vendors typically communicate invoice requirements or expectations during onboarding (only about 32% do). Practitioners are challenged by the rush to do business, and the lack of an easy way to provide and obtain information.
When thinking about communicating vital information, and keeping vendor and customer master data current, 73% of vendors and 78% of buyers update master information only “as needed” or “not regularly.” The lack of a regular refresh of key master data potentially increases risk related to operational efficiency and fraud. Unfortunately, both vendors and buyers for the most part rely on “recognized email” or “letterhead” from a trading partner to enact master file changes. This is how fraud such as Business Email Compromise can happen.
Again, what the survey points to is the lack of a systemic, automated approach for facilitating invoicing, and related processes for providing and obtaining payment-related information.
That’s where Phixius comes in.
In response to these friction points, Nacha is developing Phixius to facilitate the digital transformation of fragmented processes, and by promoting a systemic platform for interoperability among portals and other trusted sources of secure payment-related information.
Phixius is an online platform uniting technology, standards and rules to allow participants to exchange payment-related information, like invoices, across various payment types. Phixius is designed to address several issues across the payments spectrum, such as supplier and customer onboarding.
Phixius is intended to enable banks and fintechs to help customers exchange financial supply chain information across platform providers. The goal is to reduce friction and to automate manual processes, as well as to reduce fraud by leveraging distributed ledger technology for verifying data.
We will publish further information on how Phixius works shortly. Meanwhile, if you would like to learn more, please let us know.