JPMorgan Chase Launches Electronic, Card-Based Settlement Solution

AP Trac(SM) Converts Settlement of Higher Dollar Transactions from Paper Check To Purchasing Cards, Supports Expansion into Order-to-Pay Automation

New York, NY.- JPMorgan Chase has launched AP Trac, an electronic, card-based settlement solution designed to replace paper checks for accounts payable spend. With AP Trac, accounts payable organizations can settle approved invoices over a secure commercial card network much like straight-through Automated Clearing House (ACH) processing, without supplier intervention. This card-based settlement solution helps to lower settlement costs, streamline payment processing, increase supplier adoption, and expand into a comprehensive Order-to-Pay automation and working capital solution.

To ensure maximum control and ease of reconciliation, AP Trac utilizes JPMorgan Chase’s patented, market leading ExacTrac(SM) single-use card functionality. Each payment is assigned a unique card number with authorization controls specific to that payment transaction. To simplify system integration, AP Trac leverages the proven, pre-built adapters of the JPMorgan Xign Order-to-Pay solution. No additional AP integration effort is necessary.

AP Trac works by leveraging existing AP operational processes. After invoices have been approved and scheduled for payment, a standard payment file is sent to JPMorgan Chase indicating settlement via AP Trac. Suppliers can receive payment notifications and remittance details automatically and funds are deposited as early as two business days after authorization. Final settlement of vendor charges are deferred with JPMorgan Chase based on established card payment terms. This optimizes working capital for buyers and suppliers by adding float while speeding up vendor payments.

Throughout the settlement process, both parties to the transaction have visibility into the status of payments and historical records through the Web-based portal of the JPMorgan Xign Order-to-Pay solution. Payments can be tracked and managed via the portal for better forecasting and cash-flow predictability.

“As more than 80 percent of business-to-business payments are still settled with traditional checks, accounts payable departments are increasingly seeking a seamless transition to electronic payment and remittance delivery,” said Richard Erario, Senior Vice President and Business Executive for Commercial Card and Electronic Procurement, Invoicing and Payables, JPMorgan Chase. “AP Trac extends the benefits of purchasing cards to accounts payable spend while maintaining the controls necessary for high-value purchases. In addition, AP Trac offers a unique opportunity to expand into a full-scale, Order-to-Pay solution that can generate double-digit working capital benefits.”

With AP Trac, users can expect the following benefits:

* Greater efficiency. Automated invoice tracking, authorization and settlement increases overall accounts payable efficiency.
* Maximum control. Single use account numbers are limited in their view and access. For participating merchant acquirers, there is no need for suppliers to access or manage account numbers as payments are initiated by the buyer in a straight-through manner. Suppliers not served by a participating merchant acquirer will be notified via e-mail that payment has been approved and is ready to be processed. These suppliers simply log into the secure AP Trac portal to receive a single-use card number and initiate settlement using a standard Point of Sale device much as they do today.
* No upfront hardware or software expenses. Pre-built adapters seamlessly integrate your existing system with the hosted AP Trac solution.
* Shared supplier network leverage. Tens of thousands of active suppliers in the rapidly growing Order-to-Pay network can be targeted for AP Trac settlement.
* Improved supplier relationships. Suppliers are paid more quickly and little work is required on their end. Easy online supplier enrollment leveraging JPMorgan Xign Order-to-Pay’s proven methodology and capabilities streamlines on-boarding.
* Foundation for Order-to-Pay transformation. Product can be extended to a comprehensive electronic settlement solution that features a holistic approach to capturing early payment discounts and leading-edge AP automation for faster invoice approval and dramatic improvements in efficiency and control.

As a key component in JPMorgan’s strategy to optimize payables-related working capital for clients, AP Trac complements other JPMorgan Treasury Services products. Companion products, which may be targeted at different supplier segments with different early payment discount terms, include JPMorgan Xign Discount Manager and JPMorgan Chase Supply Chain Financing.

AP Trac can be purchased with the electronic invoicing module of the JPMorgan Xign Order-to-Pay solution to accelerate invoice approval or as part of the complete JPMorgan Xign Order-to-Pay suite that also includes order management, payment management and dynamic discounting functionality. For an online AP Trac demonstration, visit http://www.jpmorgan.com/visit/demoAPTrac.