San Francisco, CA, USA
January 11, 2007Standards:
The Pony Express
to E-Payments
Report Published by Celent
Standards and the critical mass of users
they generate are the pony express of any adoption curve. Development and
dissemination of standards for B2B transactions will open the e-payments
frontiers. Although they will not generate a gold rush, they will enable
electronic payment processes.
In a new report, Standards: The Pony
Express to e-Payments, Celent discusses advances made in developing
payment-related standards. Although standards ultimately generate a
win-win for all stakeholders, there are short-run costs and contentions
that result in an arduous journey. Paving the path to e-payment standards
has not been any different, and it is not completed yet (e.g., ISO20022,
Figure 1). Much of the contention revolves around control: control over
standards development and loss of control when proprietary systems are
replaced with open ones. Global corporations, which stand to gain the
most, are already beginning to generate a demand pull that banks and other
third parties will respond to. “Corporations are speaking up. They want
improved and innovative transaction-related services, for example,
straight-through processing rates above 95%, which require
electronification of the payment process,” comments Alenka
Grealish, author of the report and manager of the Banking group at
Celent.
“XML-based messaging standards will act
as the pony express, while the Internet and Internet protocols will be the
communication paths they beat. Large companies are increasingly favoring
XML. An EDI fatigue has set in to several global corporations and is
triggering a gradual migration from EDI-based systems to XML-based ones,”
says Grealish.
“ISO20022 will be the standards pony that
first rides in Europe and is promoted by global banks and corporations.
Leading ERP vendors are incorporating it into their next releases, and
will assure its promulgation over the next three to five years it takes
large corporations to upgrade,” Grealish concludes. The report reviews
the accomplishments and ambitions of SWIFT (including SCORE), TWIST, and
The Clearing House. In addition, it provides an overview of the migration
from EDI connectivity to SWIFTNet of a corporate pioneer, GE.
The report is 27 pages and contains eight
figures and seven tables.
A table of
contents is available online.
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