Payments Questions & Answers

Q: What is a Multi-Payee Payment and how does it work?

Multi-payee payments are payments that are payable to more than a single payee. The standard method to make a multi-payee payment is with a multi-payee check which is simply a paper check payable to more than one payee. Revolutionary ePayment technology has now made it possible to make a multi-payee payment electronically with benefits that make it much faster and cheaper than checks. Multi-payee ePayment transactions can be routed through safe and reliable payment networks such as the ACH, Credit/Debit Card, and Blockchain.

Q: Are Multi-Payee Payments for everyone?

Multi-payee payments are usually corporate, or government payments made to individuals, business entities or a combination of both, and the payees are all stakeholders of that single payment. Some examples of multi-payee payment use cases include insurance carrier claims' payments, real estate closing payments, IRS tax refund payments, legal settlement payments, and M&A payments.

Q: How many people use Multi-Payee Checks versus Multi-Payee ePayments?

Multi-payee check, also known as a two-party check, is the dominant method for making a multi-payee payment, and this is because it has been the only option in the market until recently. For example, about 60% of all Property and Casualty insurance claims are multi-payee payments, and they are mostly paid with multi-payee checks. Multi-payee ePayment is the alternative to multi-payee checks, and it is a new payment capability that has brought excitement to the payment industry.

Q: Why don't more companies or individuals use Multi-Payee ePayments?

Multi-payee ePayment capability is a game-changing solution that is new to the market and will begin to replace multi-payee checks as it becomes ubiquitous. Usage will increase when people see the societal benefits and understand how much ePayments can eliminate fraud and abuse and save the government, companies, and consumers millions of dollars a year.

Q: How safe are checks?

The 2017 Association for Financial Professionals (AFP) Payments Fraud and Control Survey, underwritten by JP Morgan, shows that checks remain the primary target for fraudsters. Checks were subject to more payments fraud than any other payment method, a staggering 74% of finance professionals report that their organizations' check payments were exposed to fraud. Check fraud is on the uptick, and they continue to be the most popular method for committing payments fraud. A 2017 American Bankers Association (ABA) Deposit Account Fraud Survey found that check fraud is a $7 billion annual problem for banks.

Q: What is the relative cost of Multi-Payee ePayments versus checks?

According to the 2015 Payment Costs Benchmarking Report by the Association for Financial Professionals (AFP), sending a paper check is ten times more expensive than the internal or external cost of sending and receiving an ePayment via the ACH, and receiving a paper check is more than five times as expensive. The median cost of sending a paper check is $3.00, while the cost for receiving a paper check is $1.57. The median internal cost for sending and receiving ACH ePayments is $0.29, and the median external cost for sending and receiving ACH ePayments is $0.27. The costs for multi-payee checks are much more due to the additional security and verification expenses.

The Report's findings reinforce that checks are significantly more expensive than electronic payments and are also quite inefficient.

Q: Why is ePayment better for the Payors and Payees?

Can you imagine if employers and employees did not have the option to send and receive salaries as Direct Deposit ePayments and had to use paper checks? ePayments are secure, convenient and fast. An ePayment has never been lost; it saves payees from the wasted time standing on lines at their banks and gives many people access to their money earlier than a traditional check. The payment reconciliation is also easier and cheaper for the payor.

Q: Can a company paying with Multi-Payee ePayment require the payees to receive payments electronically?

Companies usually try to accommodate their customers or the payees. However, using ePayments is so beneficial that most payees want to take part voluntarily.

Q: Will companies lose the float money advantage when switching to ePayments?

The savings companies will realize from using ePayments far outweigh any money earned from check float. It is similar to the advantages companies gain from using the faster method of a Direct Deposit to pay salaries rather than issuing paper checks.

Q: How can a company sign up for Multi-Payee ePayments?

Business entities can sign up through an authorized multi-payee ePayment vendor or with a participating financial institution.

Q: How will a Payer or the Payees know when a payment has been electronically deposited?

Their respective financial institutions can tell them exactly when the funds were debited or pushed from the payor and credited to the payees.

Q: Why are ePayments important?

ePayments save money for the companies, the government, payees, and society. Most people are aware that a stable and healthy company provides a reasonable measure of job security, which in turn benefits the broader community and country.

Q: Can I divide my funds among different accounts as a Payee of a Multi-Payee ePayment?

Yes, you can deposit your funds into as many accounts as you choose. Just specify the desired account at the beginning of the process and the funds will be deposited there.

Q: How often will I have a problem with sending or receiving a Multi-Payee ePayment?

Problems with ePayments are rare. You are ten times more likely to have a problem with a check.

Q: When do I have access to the money?

The funds are available in your bank account as soon as it is deposited electronically.

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