Internet Payment Exchange, a new bill payment solutions company based in Clifton, VA, is developing the financial industry’s first Internet-based payment clearinghouse. The IPAYX Virtual Clearinghouse will efficiently transfer payment and remittance advice information among consumer and business customers through the Internet. The clearinghouse will be compatible with bill presentment and traditional “pay-anyone” payment systems.
“Current payment clearing options, such as those offered by CheckFree , are built on an old telecommunications architecture that’s losing money for all parties but the payment processor,” said Douglas E. Braun, president and chief executive officer of Internet Payment Exchange. “IPAYX will virtually eliminate the need for a middleman in payment routing and clearing, significantly decreasing the third-party role. We’re capitalizing on the ubiquity of the Internet to turn bill payment into a money maker.”
Generating Revenue Through Bill Payment
As much as 65 percent of electronic banking costs is attributed to fees charged by third-party companies for payment processing, Braun noted. The IPAYX Virtual Clearinghouse will change the economy of bill payment by making it a profit center for payment originators (such as banks) and significantly cutting costs for billers who use consolidators (including warehouse and lock box operations) to receive payments. The payment originator is paid for the effort of collecting the payment by the consolidator, who in turn is paid by the biller. The biller acquires the payment at a fraction of the traditional payment expense. “Payment clearing currently requires the originator to pay for transactions they remit,” Braun said. “IPAYX turns that model upside down. We also charge per item rather than per consumer, letting originators take advantage of least-cost routing.”
A Direct Payment Route
The IPAYX Virtual Clearinghouse provides a direct route for electronic payments, using the Internet as a universal information channel. It is designed so that any payment warehouse can send electronic payments directly to biller remittance lock boxes anywhere. Within the Virtual Clearinghouse architecture, IPAYX will offer a virtual private network for payment clearing and information exchange. The virtual private network adds encryption and authentication to the Internet, thereby creating a closed set of access points that use regular Internet pathways for private and secure communications. As a result, the individual transactions take the shortest, fastest and most economical route. IPAYX will also provide a directory synchronization service for routing and posting biller information.
“In the Internet world, there’s no need to funnel payments to third parties when a biller is directly addressable,” Braun said. “Payments aren’t touched, sorted, or handled by any intermediaries, so chances of error are minimized and transaction charges are significantly reduced.” Additional IPAYX Services In addition to the Virtual Clearinghouse, IPAYX will provide alternative delivery services for payments that can be partially completed electronically, such as ACH with either e-mail or fax remittance not
“The irony of e-billing today is that around half of electronic payments are converted into paper checks,” Braun said. “IPAYX offers solutions to help maximize the use and acceptance of electronic payments.” IPAYX will also offer check printing to complement the IPAYX electronic delivery network. The company is currently discussing business relationships and alliances with several super-regional banks and financial service providers.
“We’re already getting a strong response from banks and other financial services companies who want to realize the benefits of electronic payments that have remained elusive,” Braun said. “By providing a highly efficient, low-cost payment alternative, IPAYX has a competitive advantage that will set new standards for the bill payments industry.” About Internet Payment Exchange
Internet Payment Exchange (IPAYX) is a new bill payment solutions company formed in January 1999 to develop efficient, low-cost solutions for bill payment clearing among financial institutions. IPAYX’s products and services are designed to help financial institutions stay involved and profitable in the emerging electronic payments industry. The company’s flagship product is a Virtual Clearinghouse that uses the Internet to efficiently transfer payment and remittance advice information among consumer and business customers at a greatly reduced cost. IPAYX was founded by experienced managers in banking and technology circles with considerable frontline knowledge about electronic banking and payment systems. For more information about IPAYX and its founders, contact Douglas Braun by phone at 703-449-8890, e-mail at firstname.lastname@example.org, by fax at 703-449-9692 or visit www.ipayx.com.Details