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GPIE FAQ Book B2B Payment Services 053102


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We\'ve gathered the questions usually asked and provided yp-to-date answers in this small booklet to help you know and understand more about the GPIE B2B Payment Service

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GPIE FAQ Book B2B Payment Services 053102

  1. 1. Global Payment Information Exchange B2B Payment System Frequently Asked Questions GPIE Incorporated Phone: 516.423.1117 Website: E-Mail:
  2. 2. Global Payment Information Exchange The Holy Grail in B2B PaymentsWelcome and let me thank you for your interest in GPIE!As a result of the growing need for more informationabout:  Our offerings and features,  Our infrastructure,  Our team and our plans,We’ve gathered the questions we’re normally asked andprovided up-to-date answers in this small booklet to helpyou know and understand more about our flagship, GPIEB2B Payment Service.As we can only provide introductory responses here,we’d very much like to know of other questions youmight have or if you need any additional information.If so, please contact me and I’ll be glad to provide it. We’d love to hear from you! Steve Cohen Chief Executive Officer GPIE Incorporated 516.423.1117 mobile
  3. 3. Global Payment Information Exchange B2B Payment System Frequently Asked Questions Table of Contents1. About GPIE .................................................................................. 12. GPIE B2B Payment Service Overview ....................................... 33. What Are The Key Elements Of The GPIE Payment Service? .. 44. Risk/Security ............................................................................... 65. Software ....................................................................................... 96. Process ....................................................................................... 117. Features ..................................................................................... 138. Competition ............................................................................... 209. Implementation ......................................................................... 2110. Implementation (Internal) ...................................................... 2211. Foreign Exchange (FX) ............................................................ 2312. Pricing (Internal) .................................................................... 2513. What’s In GPIE’s Roadmap For The Future? ......................... 2614. The Strategic Value Of A Payment Factory ........................... 27 ©GPIE 2012 ii As of: 5/31/12 8:32 AM
  4. 4. Global Payment Information Exchange B2B Payment System Frequently Asked Questions1. About GPIE  Who is GPIE (company, board, etc.)? Operating Team  Steve Cohen – CEO & Founder – Former Global Manager of PwC Financial Services Consulting  Marius Marijosius – COO – Former Head of Smith Barney International Operations  Al Kuebler – CIO – Former Head of Process Engineering at Citibank North American Credit Card Operation, SVP Distributed Systems at ABN AMRO, CIO McGraw-Hill, Acatel-Lucent, AT&T Universal Card Services, Los Angeles County  Ross Phillips – International Business Development Executive – Former Co- Founder of Odyssey Financial Services Board  Steve Cohen  Marius Marijosius  Sam Halim – Former Chairman of ABN AMRO Technology & Treasury Services and Global CIO  Rick Sellers – Former President & CIO, Huntington Bank  Alan Schatten - A CPA by training, Alan was a Founder of Live on Line, Inc., one of the first Internet Streaming Media Companies and one of the few highly profitable Internet Companies. Alan has over fifteen years of experience working with technology and business process companies in product development, marketing, sales, operations and finance. Advisory Committee  Gerry Levin – Former Chairman & CEO, Time Warner. Former Head of HBO Studios.  Sean Gallagher – Former President of Fiserv Investor Services and Global Segment Executive JPMorgan Chase Treasury Services.  Art Claudio – Former CTO of Merrill Lynch International Private Client Group and Asia-Pacific.  What services does GPIE provide today? ©GPIE 2012 1 As of: 5/31/12 8:32 AM
  5. 5. Global Payment Information Exchange B2B Payment System Frequently Asked Questions B2B Payment Service Online Brokerage Virtual Banking When should GPIE be considered? Tier-1 Banks - When signs of strain are showing as current platforms compete for a constrained resource pool. When the need to interface bank cash management and payment systems to ever changing ERP and accounting systems of the bank’s customers take time and resources from enhancing the product and other competitive advantage producing activities. GPIE solves this issue by offering a wide range of Adapters that seamlessly integrate with the customer’s systems with no disruption to current processes or daily operations. What are GPIE’s B2B Payment Service advantages over the competition? Simplicity, traceability and lowest time and cost to market (please see our section on Competition for more details). How easy is it to integrate GPIE’s service? The average implementation time is 2-3 weeks. However, if the ERP Platform has been customized (typically found in SAP & Oracle financials), there will be a small project to ensure that the data mapping and routing algorithms are correct. Is GPIE large enough? Our current payment volume is 9MM per day and we are investing heavily in infrastructure to easily accommodate the huge increases in projected volumes in Q2 and beyond. We currently have over 2,200 application developers offshore and our Strategic Partnership Program is expanding rapidly. We are in advanced strategic alliance discussions with large system integrators focused in the BFSI space.©GPIE 2012 2 As of: 5/31/12 8:32 AM
  6. 6. Global Payment Information Exchange B2B Payment System Frequently Asked Questions2. GPIE B2B Payment Service Overview PAYER GPIE RECIPIENT SERVER •Scalable •Redundant •Secure •Dedicated i i $ $ $ $ $ The diagram above is an example of how the money and information flows between the counterparties when using the GPIE system. In this example both parties are part of the GPIE network and it the recipient’s invoice information had previously been entered into the system and had been accepted by the payer. a. The payer agrees to pay the recipient’s invoice  The payment and remittance information are sent to the GPIE server  The information is available to both parties at that time. The payer sees their payment and the recipient can see that a payment has been scheduled b. The GPIE server sends the payment information to the payer’s bank  The message is translated from the payer’s electronic format to the bank’s standard format c. The payer’s bank transfers the funds from their payer’s account to the recipient’s account  The payment information is sent to the GPIE server  If this transaction involves different currencies, the currencies are exchanged at the spot rate or contracted rate – whatever is stipulated by the agreement. d. The recipient receives the funds  The payment and remittance information are sent to the recipient ©GPIE 2012 3 As of: 5/31/12 8:32 AM
  7. 7. Global Payment Information Exchange B2B Payment System Frequently Asked Questions3. What Are The Key Elements Of The GPIE Payment Service? a. Remittance Information  An easily customizable GUI with 72 fields that allows a payer of funds to provide all necessary information to the receiver of funds.  Such Remittance Information will be transmitted to the Receiver of Funds outside the existing payments networks (SWIFT/ACH/Other regional payment networks).  Such separation of the remittance information from the payment message allows GPIE complete independence from the underlying payment networks while allowing GPIE payment customers a seamless experience (Common Payment and Remittance Interface). b. Integration With AP/AR Systems  GPIE has the ability to integrate the payer’s AP system into the GPIE system so that all remittance information is automatically transferred from the payer’s AP system into the GPIE portal.  GPIE will provide the receiver of funds the ability to integrate the receiver’s AR system into the GPIE system so that all remittance information is automatically converted and transferred from the GPIE portal to the receiver’s AR system.  The receiver would be notified by email that a payment has been made to them and would link them to the GPIE portal.  Once linked to the portal, an automated transfer of information occurs. c. Without Automated Integration With The GPIE Portal  The payer would manually enter the remittance information into the GPIE portal through easily navigated menus and screens.  As with the automated payment in (b) above, the receiver would be notified by email that a payment has been made to them and would link them to the GPIE portal.  In the case where there is no automated integration, the receiver of funds would have the ability to download the remittance information in a variety of formats such as ©GPIE 2012 4 As of: 5/31/12 8:32 AM
  8. 8. Global Payment Information Exchange B2B Payment System Frequently Asked Questions Excel, Text, HTML, CSV, etc., that would allow the receiver to either automatically or manually enter the remittance information into their company’s AR System.d. Least Cost Routing Through rules established by the payer, GPIE will determine the least cost routing methodology (Wire, ACH, SWIFT, etc.)e. Reconciliation The portal will provide the capability for the payer to do full reconciliation of their bank account.f. Cross Border Payments If a payment will be made in a currency that is different from the payer bank’s base currency, the following will occur: o The payer will choose from a list of currencies from which to make payments. o The payer will choose from a spot or forward conversion price. These spot and forward conversion prices will be provided in real time. o Payee’s bank will debit the payer’s account in the equivalent local currency plus the fee, and will convert the local currency to the receiver’s currency and will complete the transaction. o The remittance information would be transferred in the currency selected by the payer. o The payer completes the transaction.©GPIE 2012 5 As of: 5/31/12 8:32 AM
  9. 9. Global Payment Information Exchange B2B Payment System Frequently Asked Questions4. Risk/Security a. If internal GPIE processing fails (payment instructions and remittance information are sent to GPIE and no payment is made) what recourse do the payer and recipient have? What liability does GPIE incur? What safeguards does GPIE have in place to avoid such a situation?  Some risk is always understood and accepted by all parties for any such service as GPIE offers.  However, and due to the fact that GPIE always maintains its Component Failure Impact Analysis (CFIA) in currently tested form and that its infrastructure is several levels removed from any single point of failure (availability 99.99%), it is extremely unlikely that a GPIE processing failure of any kind can possibly occur (GPIE’s successful performance history is available, if there is interest).  As to events classified as ‘Force Majeure’ or ‘Acts of God,’ both GPIE and its clients are protected by the nature of their contractual arrangements.  As to safeguarding batch or individual payment transactions, GPIE’s Transaction Management Process, whereby outgoing transactions are put into a ‘hold’ state upon issuance until GPIE confirms that they have been received and reconciled, ensures that only fully validated and verified payment instructions and related information is allowed into the commitment process. b. What are the recovery and restart capabilities of the GPIE service? Have they been tested?  GPIE’s very robust infrastructure is primarily focused on interruption prevention due to any cause. All individual processing hubs are equipped with advanced automated look-ahead and immediate notification tools to discover possible problem conditions well in advance. All facilities are redundant (two levels deep) with automatic cutovers to their declared alternatives built-in. All networks used or planned are also designed to always allow one or more additional circuit path and all components are capacitized for many times their current actual workload or throughput conditions. Protection against power outages is comprehensive (two grids, 6 hours battery, dual generators with 11 minute kick-in plus extra pads and 6 months of fuel). Many other preventative measures are in place and tested, the details of which can be made available if there is interest. ©GPIE 2012 6 As of: 5/31/12 8:32 AM
  10. 10. Global Payment Information Exchange B2B Payment System Frequently Asked Questions As to recovery, due to GPIE’s use of instantaneous replication tools (RAID), all data and directory indices are always maintained as redundant in real-time, but sectional backups are taken every 5 minutes with a universal backup done at 2:00 AM each day. Each Friday all backups are again copied, delivered and relocated to conditioned vaults within off-site facilities. Recovery and restart from any massive problem can of course be done, but GPIE’s moment by moment replication and dual access processes makes it extremely unlikely that it will ever be needed. GPIE’s preventative and recovery capabilities are routinely tested in keeping with Component Failure Impact Analysis (CFIA) compliance, with any exceptions formally registered and remedied as a priority.c. In the event that the GPIE system is unavailable, what happens to any transactions that are being generated from the payer’s side? Do they get queued up and then automatically submitted when the GPIE server becomes available? Yes. This is the required interface protocol for transactions generated from the payer’s side. As mentioned above, however, all incoming and outgoing transactions utilize GPIE’s Transaction Management Process, whereby GPIE confirms that they have been sent or received properly.d. What points of the communication are encrypted and what kind of encryption is used? In general, encryption key pairs, kept to the triple Data Encryption Standard (DES), are periodically generated by GPIE for individual client exchanges and for GPIE “zones.” All communication exchanges are end to end protected and this protection continuously changes and is fully audited monthly. If there is interest, this type of protection can be explained more fully. It does, however, exceed regulatory requirements.e. Are there any regulatory and compliance considerations with the GPIE service? How are those addressed? Yes, and GPIE has a process in place which ensures that it remains in full compliance with the latest regulatory requirements. As an overview, the regulatory requirements of the Office of Foreign Asset Control (OFAC), The Patriot Act, Automated Clearing House (ACH), NACHA, Anti-Money Laundering (AML), Bank Secrecy Act, CFTC, etc., as they apply to transactions supported by the GPIE service, are being enforced and audited regularly.©GPIE 2012 7 As of: 5/31/12 8:32 AM
  11. 11. Global Payment Information Exchange B2B Payment System Frequently Asked Questions Knowing that these requirements are increasingly changing due to world conditions, GPIE has resourced itself to ensure that it remains aware of their current state, proactively implements them and provide for the periodic audits that increasingly occur.©GPIE 2012 8 As of: 5/31/12 8:32 AM
  12. 12. Global Payment Information Exchange B2B Payment System Frequently Asked Questions5. Software a. How many simultaneous transactions can the GPIE server handle? Has this limit been tested? If the system response is slow what strategies can GPIE employ to speed it up?  The GPIE infrastructure is currently running at 9MM per day and the number of transactions per second (TPC), even at peak times, is less than one tenth of the throughput capability currently tested and in place.  Additional throughput capacity is added well in advance of client demand and trends are monitored closely to ensure that several multiples of current throughput needs are always in place.  GPIE uses the most advanced look ahead tools on the market to continually assess and warn of any possibility of emerging ‘choke points,’ capacity issues, etc., through various levels of urgency. Some corrective action options are predetermined but notifications for the need of potential corrective actions are automatically relayed in real time to GPIE/Nucleus team members via mobile connection. b. In what language(s) is the software written?  C for the core, Oracle for the database and Linux for the operating system. c. Is the software rules based?  Yes. GPIE’s service is designed around the ability to reconfigure it on the fly rather than need any customization. Customization is available, however, but it has always been the practice to eventually convert this customization into configuration options to eliminate any accumulation of legacy maintenance issues. d. Does the software contain its own workflow engine?  Yes. e. What external data services does the software require?  None ©GPIE 2012 9 As of: 5/31/12 8:32 AM
  13. 13. Global Payment Information Exchange B2B Payment System Frequently Asked Questionsf. What interfaces are included with the base software? There are currently over 300 application program interfaces (API’s) in place to deal with send/receive exchanges. They are under version control so they can be enhanced, changed and others added if needed.g. How long does it take to build interfaces, etc.? New interfaces? o Depends on specific requirements, but the typical time to build an interface is 2-6 weeks. Data Feeds, Workflows and Functions/Rules? o Depends on specific requirementsh. How long does it take to integrate a new ERP system? On average, 2-3 weeks if no customization made on the ERP platform. If there was customization made on the ERP platform, there is a small project required to develop the mapping and routing algorithms.i. What does integration entail? A project plan, timetable and commercial terms will be furnished. Also, a project manager will be assigned. Typical implementation is accomplished over the Internet.j. Describe the functions of the translation engine? What is being translated to what? In basic terms, the translation engine converts the formatting (or lack of formatting) of any transaction so that it is compatible with each party’s requirements and verifies that this is the case before ‘commitment’ can occur. For example a QuickBook transaction needing to go to Visa might mean a conversion to the Visa format and a reconversion back to the QuickBook form before acceptance occurs. The GPIE transaction management system puts each such transaction in a hold status until the conversion, extraction and validation process is complete. If there is interest, GPIE’s powerful translation engine and its safe, secure and easily adaptable transformation capabilities can be further explained.©GPIE 2012 10 As of: 5/31/12 8:32 AM
  14. 14. Global Payment Information Exchange B2B Payment System Frequently Asked Questions6. Process a. How are recipients of payments notified that they have payment and remittance information available from GPIE? What specifics are available?  Notification is done basically in two ways: via e-mail (customized and individualized if needed) and via the GPIE portal (where after logging in, access to all payment activity is provided).  Every known detail regarding each payment is available to recipients and depending upon specific client needs, this information can be formatted or arranged accordingly. b. Is the billing mechanism for GPIEs services operational and has it been tested?  Yes, GPIE’s billing cycle is monthly in keeping with particular contractual arrangements. c. Operationally, do we bill the bank for services rendered or is this automated?  We bill the bank for services. The bank is our client and GPIE is transparent to your corporate clients. d. How are users notified of an error in a transaction?  They receive an on-line message where upon they can login and download the particulars in question for any needed remedial attention. e. What protocols are used to communicate with GPIE?  Encrypted file transfer over SFTP for all payment requests.  Responses are provided by reverse files (encrypted ASCII over SFTP). ©GPIE 2012 11 As of: 5/31/12 8:32 AM
  15. 15. Global Payment Information Exchange B2B Payment System Frequently Asked Questions Reconciliation of requests is made via reverse files. Cash reconciliation is with Response Fils/Bank Account – outside GPIE.f. Is the process for domestic payments the same as the process for foreign-exchange transactions? Generally yes. Exceptions occur when different international currencies are involved. Settlement in the second currency exchange rate requires a confirmation step.g. Explain the reconciliation process: This occurs in 4 different forms: 1) Simple Payment Instructions, 2) Managing Receivables, 3) Combinations and 4) Card Processing.h. Review the reconciliation process and how the system identifies what data corrections are required. In simple terms, the process involves a matching process to resolve whether the payable was correctly initiated and the receivable matched it as expected. What takes place is a very detailed and complex comparison of many specific elements and their relationships not only to determine reconciliation exceptions but to identify more precisely what corrective actions need to be may need to be taken regarding the transaction involved if an exception is detected. GPIE’s reconciliation process was designed from the start around its use of comprehensive payment information to ensure that straight through processing is achieved without reconciliation intervention wherever possible. If there is interest, the GPIE B2B Payment System reconciliation process and its particular benefits can be reviewed in detail.©GPIE 2012 12 As of: 5/31/12 8:32 AM
  16. 16. Global Payment Information Exchange B2B Payment System Frequently Asked Questions7. Features a. With what payment systems (SWIFT, ACH etc.) does GPIE have established and working interfaces?  Domestic ACH  Cross border wires  Fedwire®  SWIFT messages b. With which ERPs does GPIE have established and working interfaces?  Coda  Compass  Compiere  JD Edwards  Lawson  Microsoft Dynamics  Open MFG  Open Pro  Oracle Financials  Peoplesoft  QuickBooks  Quicken  Ramco  Sage  SAP c. What are the benefits to the bank?  The GPIE B2B payment system provides an effective and proven solution to their corporate customers needs that is inexpensive and fast to market.  Access and full visibility to real time payment information. Unlike alternative B2B payment system offerings, GPIE’s B2B Payment System was built around the unique principle that immediate and available knowledge of payment activity (real time cash flow information - both summarized and in detail) was of the utmost importance to allow its clients to make better short and long term decisions, faster, as cash flow circumstances change. ©GPIE 2012 13 As of: 5/31/12 8:32 AM
  17. 17. Global Payment Information Exchange B2B Payment System Frequently Asked Questions Message Standardization – instead of having to manage multiple electronic payment formats, banks receive messages in a single message format. Message standardization reduces operating costs, improves overall efficiencies, and increases the velocity of B2B money throughout the system. Custom designed adapters link your customers G/L’s to the bank’s cash management system. This increases knowledge of your customer’s operations, unlocks significant efficiencies, and identifies new revenue possibilities. A single payment platform reduces dependence on IT for custom integration, the time and cost required for to accommodate changes are also reduced. Installed as an “add-on” to ERP in customer’s back office so it doesn’t require significant effort from the bank’s customers. Manages the creation, receipt, and processing of payment and reporting files in the banks format reducing IT effort and system load. Integrates the respective ERP modules with the corresponding banks Treasury Management services. As configurability is rules-based out-of-the box, development/governance processes are streamlined, allowing much faster response time to client requests. Leverages ERP functionality for payment creation, receipt matching, and reconciliation. Reduced “time to benefit” for corporate customers. Lower total cost to integrate. Allows for more plug-and play integration. Enables tighter integration with ERP. Simplifies and facilitates support needs due to GPIE’s rule-based configuration approach instead of building customized solutions requiring specialized maintenance. Is not tied to any particular OS or hardware.©GPIE 2012 14 As of: 5/31/12 8:32 AM
  18. 18. Global Payment Information Exchange B2B Payment System Frequently Asked Questions Has very small footprint and does not require additional hardware. Includes exception handling and recovery logic. Interfaces with vendor master table to avoid out-of-sync storage of vendor data. Interfaces with customer’s transmission platform. Easily installed: customer able to send test files in 2-3 weeks. Allows for additional processing data to be stored if necessary. Provides for e-mail capability for inbound acknowledgement. Significantly reduces dependence on internal or external IT resources. Installed at no cost to banks and on a white-labeled basis. GPIE remains in the background. The bank’s name remains in front of your clients, but with an expanded product set and enhanced services – keys to a robust client relationship. Opportunity to generate new corporate relationships because of expanded bank services, lower operating costs, enhanced cash management capabilities, and global expansion via FX capabilities.d. What are the benefits to the payer? Pushes the ERP interface headache out to a hosted service provider. Easy extraction in standard formats of payments and remittance data. Gets remittance information to the vendor as they need it (delivery mode and format). Hosted data in easy to extract means and linked to payment status. Single extraction and single delivery of both payment and payment information. Backward integration of status into the ERP.e. Are there any unusual benefits that the GPIE payment system offers to recipients? Yes.©GPIE 2012 15 As of: 5/31/12 8:32 AM
  19. 19. Global Payment Information Exchange B2B Payment System Frequently Asked Questions GPIE’s B2B payment system provides each recipient with prompt notification that they’ve been paid (showing all relevant details) in a secure, accurate and easy to understand (and possibly individualized) form. If there is interest, more details are available on this not normally found B2B payment service notification capability.f. What are the benefits to system integrators Solidify existing client relationships by broadening the scope of current engagements. Gaining immediate access to BFSI business value CoE knowledge and expertise. Dramatically extend BFSI relationship reach and quickly acquire access to current and known personal client contacts at the C-level. Expand and target market opportunities by the inclusion of GPIE. Strengthen and improve credibility in joint bidding situations. Opportunity to participate in a new and recurring revenue stream via a GPIE Strategic Partnership. Opportunity to participate in an industry solution to the Payments and Remittance problems.g. What are the benefits to SWIFT? Additional traffic makes SWIFT more effective for its clients. Corporate clients allow SWIFT to leverage its capabilities to all clients. If traffic gets directed to GPIE first and GPIE is not built into a corporate bank’s token-based security system, SWIFT could serve as a conduit to the bank. Straightforward, rapid implementation at no cost to SWIFT’s corporate clients.h. What are the benefits to Corporations? Quick, easy and accurate B2B payment adaptation to in-place ERP systems. Easy extraction, in standard formats, of Payments & remittance data.©GPIE 2012 16 As of: 5/31/12 8:32 AM
  20. 20. Global Payment Information Exchange B2B Payment System Frequently Asked Questions  Gets remittance information to the vendor as they need it (delivery mode/format).  Hosted data in easy to extract means, linked to payment status.  Single extraction; single delivery of both payment & payment information  Backward integration of status into the ERP.  Coming soon: Single portal for vendors to communicate back to GPIE Corporate clients. i. Is the system operational 24/7/365?  Yes j. What is the current payment volume per day?  9MM transactions per day. k. What makes the GPIE solution a must-have for banks?  Faster response time to client requests by streamlined development / governance processes. The requests won’t have to compete with other bank priorities for IT resources.  Reduce total cost of ownership of components in production through avoidance of duplication.  Reduce customer-visible defects, and impact on business processing through tighter integration.  Decrease time and cost required to keep multiple platforms and applications up to date when a change is made to one of them.  Increase value obtained from investment in software development through economies of scale.. l. What would companies that are using a different payment system (SWIFT, ACH, FedWire®) gain from moving the GPIE service?  2-3 week implementation.  Cost reduction. ©GPIE 2012 17 As of: 5/31/12 8:32 AM
  21. 21. Global Payment Information Exchange B2B Payment System Frequently Asked Questions Single source from on boarding, payment, reconciliation. Reduced costs of maintaining the system and interfaces to other corporate systems.m. How does GPIE provide Straight Through Processing? This is done basically by pulling data from the ledger, passing it to the bank, and then by updating the ledger again – if there is interest, this process can be explained in further detail.n. What is Least Cost Routing for payments? How does GPIE provide Least Cost Routing? What are the benefits of Least Cost Routing? GPIE performs Least Cost Routing by matching the nature of the payment (settlement and routing requirements, contractual arrangements, etc.) against the available routing alternatives (ACH, Fedwire®, Swift, etc.) and selecting the lowest cost predetermined preference option. This process ensures that payment routing costs are always kept to the minimum allowed - within preset client parameters.o. How does GPIE provide Real Time Net Settlement (RTNS)? What are the benefits of Real Time Net Settlement? This is basically accomplished by keeping the condition of the payee-payor settlement status current at all times. GPIE’s Real Time Net Settlement process is made simple due to its common database that holds all payee and payor particulars and their associated current activity in one place. This not only allows for up-to-date and immediate settlement status if needed, but GPIE’s unique approach to RTNS also reduces cost by consolidating multiple payments between payees and payors (within the same time period) into a single transaction whenever possible.p. What are GPIE’s KYC (Know Your Customer) procedures? They are maintained as required by the US Patriot Act.q. What countries does GPIE operate in? 102 countries – a list can be provided if needed.©GPIE 2012 18 As of: 5/31/12 8:32 AM
  22. 22. Global Payment Information Exchange B2B Payment System Frequently Asked Questionsr. How long does the GPIE server keep the payment record and remittance information? 7 yearss. Does the GPIE system process payments daily or in real-time? GPIE processes payments as frequently as NACHA will allow – currently this is daily.t. Is the ability to make payments from mobile devices currently available? This is in our roadmap for Q3 2012 for iPhones and iPads©GPIE 2012 19 As of: 5/31/12 8:32 AM
  23. 23. Global Payment Information Exchange B2B Payment System Frequently Asked Questions8. Competition a. Who are GPIEs current main competitors? What do their systems offer that GPIE doesn’t have and what does the GPIE system offer that competitors don’t have? Does GPIE have any competition or is it the first and only player in this market?  GPIE is not the first and only player in the payment exchange service market. The ‘payments ecosystem’ provides a number of options to consider other than GPIE.  As to the differences between competitor’s offerings than GPIE’s service, the most accurate response, given the summary nature of this Q & A, is that each competitive payment exchange service currently in place has a significantly different array of capabilities and functions that constitute their menu of offerings.  In our experience, functional client needs can be particular so it’s certainly worthwhile to consider available and proven options.  Given the initial performance goals which the GPIE service was designed and built to achieve, we very much look forward to any competitive service comparison that considers the following factors: o Simplicity vs. Size or Complexity o Flexibility vs. Customization o Extensive and Proven International Experience o Speed of Integration o Quick Adaptation to New Business Needs o Safety and Security o Present and Future Payment Know-How o Price Per Transaction b. What processing standard enhancements and/or payment system expanded capabilities threaten GPIEs service offering?  There are no known enhancements or new capabilities that offer any such threat. It should be noted that GPIE’s ‘rules-based’ service offering can be quickly and simply reconfigured simply without the need for time consuming or complex customization. ©GPIE 2012 20 As of: 5/31/12 8:32 AM
  24. 24. Global Payment Information Exchange B2B Payment System Frequently Asked Questions9. Implementation a. How long is a typical implementation?  2-3 weeks. If the Bank has customized their ERP Platform, then there would be a small project to perform the necessary mapping and routing algorithms. b. How much customization is required during the average implementation?  None c. Do you need to make any changes to the payer’s, recipient’s or bank’s infrastructure to implement the GPIE service  No ©GPIE 2012 21 As of: 5/31/12 8:32 AM
  25. 25. Global Payment Information Exchange B2B Payment System Frequently Asked Questions10. Implementation (Internal) a. What is the composition of the typical implementation team (GPIE vs. Nucleus vs. client)? Describe what would happen during a typical implementation?  Implementation team composition normally depends upon the scale and nature of the effort and the particular skills required.  Implementations are typically jointly managed by GPIE/Nucleus, as the process used is known, understood and proven.  GPIE implementations normally include the following steps: assessment, team resources assigned, jointly conducted planning sessions, progressive stages identified, project review, refit and approval, project launch, monitoring, development, adjustments and gradual operational readiness testing, implementation and refinement. ©GPIE 2012 22 As of: 5/31/12 8:32 AM
  26. 26. Global Payment Information Exchange B2B Payment System Frequently Asked Questions11. Foreign Exchange (FX) a. What are the benefits of using the GPIE Foreign Exchange engine? How does GPIE FX processing differ for regular Foreign Exchange payments processing?  Basically, FX processes present a currency exchange rate for a period of seconds, which can be honored or not by the counterparties involved.  GPIE’s FX engine allows for the handling of currency to currency exchange transactions (immediate access to 17 currencies) to take place at predetermined rates between counterparties or, depending on given second by second rate situations, to use their internal treasury, etc., rate alternatives, or to allow GPIE’s rate to be used instead.  If there is interest GPIE’s unique FX process, showing its wide range of options to suit individual client needs and practices, can be reviewed in detail. b. Is there a limit to how much FX can be handled? Is there a minimum threshold that must be reached?  No c. Is foreign exchange capability operational?  Yes d. Has it been tested in the GPIE environment?  Yes e. How does using the GPIE service differentiate banks routing & settlement capabilities for international payments?  Most if not all Banks un-necessarily complicate things – and that is where GPIE adds the highest value – by unbundling the transaction flows. ©GPIE 2012 23 As of: 5/31/12 8:32 AM
  27. 27. Global Payment Information Exchange B2B Payment System Frequently Asked Questionsf. Are there alternatives to optionally route foreign currency payments to the beneficiary (located in the currency country) via ACH instead of using correspondent banks? Yes, here is one scenario: i. ‘Bank X’ wants to pay a customer in the US – because its overseas customers want to make a USD payment to their counterparty in the US. ii. ‘Bank X’ originates the transaction today in Europe/elsewhere by debiting the customer account and applies appropriate FX rate for conversion. We have nothing to do with this – ‘Bank X’ can use any saleable exchange rate. iii. Once ii is done, ‘Bank X’ collates all such USD Payments and sends to us in a file (our format). iv. On receipt of the ‘Bank X USD File (per iii) we debit ‘Bank X’ Nostro and credit all counterparties in the US. v. Send confirmation back to ‘Bank X’ by updating addenda record in file received (iii) and transmitting back to ‘Bank X’. vi. All this can be done today as we are already processing ~9M transactions and file formats/SFTP links are all available. By decoupling the flows, we bring in simplicity, traceability and lowest time to market for ‘Bank X’ – something that cannot be achieved by technology and size by itself.©GPIE 2012 24 As of: 5/31/12 8:32 AM
  28. 28. Global Payment Information Exchange B2B Payment System Frequently Asked Questions12. Pricing (Internal) a. What is the GPIE pricing model?  For Tier-1 Banks: Licensed software model and the bank hosts themselves.  For Other Banks: Per transaction model and GPIE hosts the service in our Data Centers. b. What do payers, recipients and banks pay to get on the system  There is no charge for implementing the service. c. How does GPIE charge for its services?  Through transaction fees and/or licensed software fees. d. Are there any costs associated with implementing the GPIE service?  No. ©GPIE 2012 25 As of: 5/31/12 8:32 AM
  29. 29. Global Payment Information Exchange B2B Payment System Frequently Asked Questions13. What’s In GPIE’s Roadmap For The Future? a. Holistic Liquidity Management Framework  Q3 2012 – 70% Complete b. Mobile Payments Service  Q3 2012 – 0% Complete c. Medical Billing Service  Q4 2012 – 0% Complete d. Wealth Management Payments Service  Q1 2013 – 0% Complete Note: GPIE strives to deliver the features our customers and the market want. This means that this list and the dates indicated are correct as of 5/31/2012, but the features listed and the dates are subject to change without notice. ©GPIE 2012 26 As of: 5/31/12 8:32 AM
  30. 30. Global Payment Information Exchange B2B Payment System Frequently Asked Questions14. The Strategic Value Of A Payment Factory As we could not articulate better how we feel about our own offering and how we know that it’s a powerful building block for an ever more effective holistic liquidity framework, please review this article from Logica, written in September of 2011. The Importance of Cash Management “In the face of an unstable global economy, intense competition, profitability pressures, and an evolving regulatory environment, the pressing issue for companies is cash management.” John Farrell & Nasreen Quibria, Logica 23 Sep 2011 “The current economic malaise continues to have a real impact on businesses. Confronted with uncertainty and weakened demand, treasurers and finance executives desire improved working capital, reduced costs, optimized efficiencies and tightened controls across their financial value chain. With the importance of cash at the top of the corporate agenda, businesses are looking more closely at their payments processes to drive value across the entire organization. To this end, leading companies are transforming their business with a consolidated payment factory - a shared service centre (SSC) centralizing and optimizing payments and collections. Catalyst Driving Consolidation In an era of cross-border networked economies, corporates are finding that legacy systems and disparate business processes cannot keep pace with the increased complexities of managing and monitoring cash movements and available balances. Recent turbulent events demand that treasurers analyze financial risk exposures in real-time. Yet, according to a new study by the Financial Services Club, half of corporations (50%) don’t have insight into their liquidity exposure (Figure 1), and of those who do have visibility, only 24% have access to real-time information. Companies looking to manage their cash positions with a consolidated view are leveraging technology and standardization of processes in pursuit of enhanced ©GPIE 2012 27 As of: 5/31/12 8:32 AM
  31. 31. Global Payment Information Exchange B2B Payment System Frequently Asked Questions business performance. Shifting to a payments consolidation model or a payment hub - also commonly known as a payment factory - is permitting a more nimble response to evolving business changes. Figure 1: Do You Know Your Future Financial Exposures? Source: The Financial Services Group Survey sponsored by Logica, Autumn 2011 Building the Business Case The first step in establishing a payment factory is to transition to a centralized financial service centre - a SSC accounts payable (A/P), accounts receivable (A/R) and treasury. In this effort, corporations are leveraging their enterprise resource planning (ERP) and other specialized corporate treasury systems in combination with a payments hub to bridge and handle the different payment types and formats. The workflow management system of a payments hub streamlines payment approvals, while the rules engine routes payments (manual and batch) to the least cost option. There is also a trend with next generation payments factories towards in-house banking to settle inter-company transactions.The compelling case for a payment factory includes:©GPIE 2012 28 As of: 5/31/12 8:32 AM
  32. 32. Global Payment Information Exchange B2B Payment System Frequently Asked Questions Increased efficiencies including higher straight-through processing (STP) levels With wide-reaching business units, subsidiaries, and trading partners, corporations must often grapple with complex and inconsistent standards, procedures, and a mix of banking relationships. Constrained by less than optimal processes, many firms continue to rely on manual practices to consolidate, track and measure their cash management performance. However, for leading companies, corporate ERP or financial accounting systems are integrated with their banks payment networks to eliminate or reduce manual intervention and automate cash inflows and outflows for increased STP. Lower transaction and operational costs The manual processes also exacerbate another issue: companies are dealing with hundreds of bank accounts at multiple banks across the globe. Maintaining multiple banking partners - each with proprietary connections and/or systems to send, receive and access banking information - can be cost prohibitive and time consuming. A centralized operational structure reduces banking relationships, cross-border payment fees, and payments across locations and subsidiaries. This, in turn, lowers foreign exchange charges and wiring costs. The corporation is also in a better position to negotiate lower banking fees based on higher volumes of transactions. Improved visibility into cash flow Historically, siloed bank payment systems based on individual product lines such as checks, Automated Clearing House (ACH), or wires have supported corporate payments. Too often corporate treasurers have had to toggle from one application to another for payments processing. As a result, businesses experience process fragmentation, diminished efficiency, and obstructed enterprise-wide transparency and control. Combined with the global expansion of the financial supply chain - businesses trading with new partners, opening new facilities and supporting the regulatory and compliance requirements of in-country trade transactions and cash management - there is a demand for enterprise-wide visibility and control over global cash balances. A cohesive solution and access to banking services through a single platform or portal via a payment factory can enable businesses to make more informed decisions. Organizations can monitor collections, work more strategically such as extending better payment terms to the best customers to maintain a more competitive position, while also doing business more effectively. Optimized payment flows including reduced exceptions processing©GPIE 2012 29 As of: 5/31/12 8:32 AM
  33. 33. Global Payment Information Exchange B2B Payment System Frequently Asked Questions In today’s environment of multiple banking platforms, ERP and treasury systems, companies face a lack of common standards, common interfaces, and integrated process flows between banks and trading partners. With a payment factory, the payment processes (batch, direct debits, and manual) are standardized regardless of originating or beneficiary country, leading to substantial benefits. As an example, with greater visibility over cash from the concentration of financial services, companies are able to closely align payment strategy to enhance liquidity forecasting and planning.  Reduced fraud, risk, and errors The majority of finance executives still rely on drawing data from multiple sources, which often entails time-consuming, manual processes that increase the potential for error. Combined with paper-based payments processes, companies are vulnerable to heightened risk issues. Beyond the internal sources of risk, the fallout of the financial crisis has made counterparty risk an area of focus as well. Companies concerned with potential disruption are closely monitoring the performance of their banks, as well as suppliers and even customers that may become insolvent. The enterprise view provided by a payments factory can enable businesses to expand key performance metrics for monitoring and mitigating these internal and external exposures.  Improved compliance and control The increasing concern with liability, corporate identity theft, data breaches and malfeasance is leading corporations to seek better internal controls and enhanced tracking mechanisms. Consolidation of financial processes with a unified payment factory affords greater transparency of funds; payment flows are more streamlined, strengthening internal controls, and easing the burden of many aspects of regulatory compliance.Building Blocks of a Payment Factory: LeveragingElectronic Payments and Automation  With the increasingly complex financial supply chain, there is a need for more efficient ways to manage payments and to connect to the network of banks and trading partners. A key initial step to an optimized payment factory starts with moving to electronic payments and business process automation.  Corporations can achieve incremental cost savings by switching from paper checks to electronic payments (e-payments). Top-performing companies use a high percentage of electronic - ACH, commercial cards, and wire transfers - versus ©GPIE 2012 30 As of: 5/31/12 8:32 AM
  34. 34. Global Payment Information Exchange B2B Payment System Frequently Asked Questions paper payments to better control the timing of their cash flows. Sellers benefit from reducing their days sales outstanding (DSO) and collections costs. Conversely, by speeding payables, companies are able to take advantage of early payment discounts or dynamic discounting to negotiate lower prices with their suppliers.  E- payments can be further enhanced by solutions like electronic invoice presentment and payment (EIPP), or employing data standard formats such as financial electronic data interchange (EDI) and extensible markup language (XML - a set of rules for encoding documents and representing data structures) that enable electronic processing. With automation of business processes via digital invoices, EDI and XML bring lower processing costs, improve cash flow management, and build better customer relationships.The Way Forward ▪ In the face of an unstable global economy, intense competition, profitability pressures, and an evolving regulatory environment, the pressing issue for companies is cash management. Companies that will emerge ahead will be those that apply a holistic approach to processes and technology. A comprehensive strategy implementing a payment factory - a unified approach integrating back-end systems of payables and receivables with treasury in a shared business centre, will contribute towards a significant strengthening of internal financing resources and capital efficiency to better position companies to navigate and capitalize on change.” ©GPIE 2012 31 As of: 5/31/12 8:32 AM