Electronic Payments in general and Financial EDI (F-EDI) in particular are a key element for the development of business-to-business electronic commerce.
Although F-EDI technologies and management schemes have been around for a long time its development have been limited due to lag of demand. In turn, demand has been greatly affected by the cost of implementation and operation of F-EDI working under proprietary close systems.
The Internet development has become a key driver to induce demand of F-EDI overcoming the cost and complexity issue of electronic payments by providing low cost infrastructure, software and administrative alternatives. Security and reliability have been the new obstacles for Internet F-EDI. The security issue is being tackled by the provision of new capabilities in web based F-EDI software. However, the reliability issue stills in place because today it is intrinsic to the Internet operational characteristics.
Three major agents need to play a role to give the necessary momentum to the development of F-EDI: the Government, the financial system and Corporations.
This research briefing included only a small set of participants that may not be representative of the groups of agents described above. For this sample, concrete actions are observed within the Federal Government and the Mellon Bank that will conduct those organizations to promote a wider use of business to business electronic payments.
For the case of the automotive industry players promoting the ANX initiative, it is observed that efforts in the past had been directed toward reducing costs and increasing efficiency of operational processes through the use of EDI. Complexity and costs involved in managing those systems and the operational goals seem to have prevented attention and precluded the development of more integrated payment management systems. However, as possibilities of increasing operational efficiency and cost effectiveness are becoming scarce, companies will have to pay more attention to cash management systems. This and the new scope provided by ANX which includes more and more agents in the system and the advantages of the internet it is likely that integration of F-EDI to other EDI activities will take place at least in the automotive industry.