Businesses today are involved in financial transactions with a number of banks and financial institutions. Corporate Treasury departments are faced with multiple responsibilities such as optimizing cash, maintaining liquidity, securing finance, controlling risk and even managing bank relationships. This requires communication in a host of different languages and protocols. Corporate Bulk Payments then is a bank system, that allows performing several transactions such as salary payment, dividends, and direct debits at one go.
Complexities in Corporate to Bank Connectivity
Every bank has their own set of standards and processes which need to be followed in order to establish a legit connection. For Example, payments within the Single European Payments Area (SEPA), need you to comply with the European Payment Council’s SEPA directive requiring provision and maintenance of International Bank Account Numbers (IBAN) and SWIFT’s Bank Identifier Codes (BIC) with other bank details in vendor and customer records. Another issue arises with certain countries which require communicating only in specific character sets defined by the local language of that country. All these challenges require moderation of sorts to bring everything to one level in order to facilitate complex accounting, financial supply chain, treasury etc and provide a bulk payment solution platform for corporate houses.
What is Host-to-Host Connectivity
Host-to-host (H2H) is an automated solution for secure electronic data transfer between banks and their corporate clients. Until now, H2H was primarily about the exchange of files to and from the customer site which is no longer the case in the current era of the digital banking business.
Now, H2H connectivity enables banks to exchange information in their corporate clients’ preferred file formats, network protocols, and security standards.
What H2H does
The host-to-host system eliminates the tedious manual process of payment transfer which involves following multiple protocols and takes charge of various steps such as
- End to End automation of payment process
- Auto-splitting and merging based on the NPCI set limit
- Auto signing and Un-signing for authorization
- Seamless file transfer
Why H2H is required
- On-boarding customers quickly
Corporate customers do not have the resources or the time to make changes in their protocols as per every bank they communicate with. According to them, it is the bank’s predicament to take care of the format issues. This creates a hindrance in the quick on-boarding of customers. H2H provides the delivery through streaming and web services which offer a more interactive linking of the banks and corporate houses. These capabilities help banks to significantly reduce the time and costs of on-boarding new corporate customers.
- Automation of payments to save time
Businesses of all sizes are looking forward to automatically connect to their bank for direct payment upload and processing. They are increasingly willing to automate their payroll system, ERP, purchase order and Invoices. Corporate houses want their payments to be automatically sent to their bank and automatically processed and skip the tiresome manual upload which involves verifying and re-authorization of payments.
- Increased competition to survive
With so many banks providing an automated platform for corporate customers, it just makes sense for others to not be of the left outs if they want to survive. With cut-throat competition from rival banks ever spying on every crevice into the corporate houses, one simply cannot risk the loss of their future cash management business, advisory services, etc. It is becoming an increasingly competitive market for banks.
All these factors make an H2H system the need of the hour. Mindgate is a corporate bulk payment solution provider which provides H2H based solutions for banks and corporates and provides the ability for businesses to integrate their accounting and ERP systems for payments and collections.