NORCROSS, Ga.--(BUSINESS WIRE)--TransCentra, a leading provider of billing and payment software and services, examined the trends and market conditions impacting lockbox for banks and corporate entities when it hosted a webinar last week titled, “The Future of Lockbox.” Paul Diegelman, senior vice president with TransCentra, moderated a panel of executives from Fifth Third Bank, RBS Citizens Bank and Treasury Strategies.
The panel discussed the current state of lockbox amid paper declines and the impact of new electronic services. Participants also shared thoughts on the evolution of value added services, retail and wholesale processing convergence as well as partnering strategies around lockbox.
“Every year billions of business-to-business and consumer-to-business checks are processed by lockbox operations,” said Diegelman. “It is important to consider the future of a service that market research group Phoenix Hecht says is used by over 70 percent of large corporations and more than 40 percent of middle market companies to collect their cash and enhance their liquidity.”
Panelists also proposed that the market for lockbox services might be expanding, contradicting the common wisdom that it is contracting. “Lockbox really is not just paper payment processing anymore,” said Dave Wexler, principal, Treasury Strategies. “It is one aspect of receivables management, and receivables management is never going away. We are seeing the beginning of a real convergence of value-added services, which includes providing robust intelligence that organizations can really use to gain a competitive advantage in their respective market.”
The changing nature of the payments entering the remittance processing environment was a common theme throughout the discussion. Panelists agreed that the corporate lockbox environment has become more complex in recent years, and that the trend is continuing. “The number of exceptions is increasing on a percentage basis every single month,” added Steve Nugent, director of AR, AP and Healthcare product line management, Fifth Third Bank. “As the clean payments continue to ‘electronify’ month after month, exception payments become a much higher percentage of the processing volume. Retail is beginning to look more like wholesale. And I believe at some point, probably in the not too distant future, processors are going to be looking for a common platform. Shouldn't we be processing these payments on a single platform, becoming more efficient, saving some expense?”
Partnering was another topic of agreement. Diegelman noted that more than half of the 41 banks in the recent Ernst & Young Cash Management Survey delivered wholesale lockbox services in part or in whole by another financial institution or third-party processor. Panelists largely agreed that a partner for lockbox services was a good idea to reduce demands on capital, leverage scale and gain ready access to updated platforms and equipment. Nugent pointed out that Fifth Third Bank partners, but not to process payments in a white label environment. Rather, the bank partners with remote deposit capture processors to extend its network while retaining control of data processing.
To listen to TransCentra’s “Future of Lockbox” webinar in its entirety and download an accompanying white paper, visit: http://www.transcentra.com/register-for-the-future-of-lockbox-webinar-recording/.
Norcross, Ga.-based TransCentra is America’s largest outsourced remittance processor, one of the largest outsourced billers and a top provider of imaging and payment processing platforms and software. An industry leader in innovative multichannel billing and payment solutions, TransCentra is trusted by many of the largest and most recognized names in both the consumer and business-to-business markets across a variety of industries, including financial services, insurance, healthcare, utilities and telecommunications. For more information, visit www.transcentra.com.