Straight-through processing FAQs

Virtual card payments increase speed and convenience for business-to-business payments (B2B payments) while reducing the costs associated with checks. For organizations weighed down by manual and paper-driven accounting processes, virtual card payments alleviate a time consuming and costly burden.

Now, companies have another option for virtual card payments: straight-through processing (STP). While attractive, there’s some confusion about what STP is and how it works. Here, we’ll provide answers to the most frequently asked questions about this type of digital payment.

What is straight-through processing?

STP is a method of conducting a financial transaction automatically via electronic transfer without manual intervention. The three primary features of STP are that it happens electronically, in real time and provides automated communication between the parties involved. STP is most often applied in the areas of payment processing and is an optional feature for virtual card payments.

What is the difference between STP and traditional virtual card payments?

While the outcome is the same, the process for STP looks a little different for vendors than payers. With a traditional virtual card payment, the vendor must manually enter the customer’s card details into a card terminal to receive payment. With STP, the customer’s payment is automatically deposited into the vendor’s bank account.

Unlike traditional virtual card payments, the vendor has no interaction with the customer’s payment card and does not need a merchant terminal for an STP payment.

From the payer’s perspective, STP and traditional virtual card processing look the same, providing faster payments with improved ROI. In addition to enjoying more visibility and control over virtual card payments, payers may earn rebates on virtual card payment volume, further improving that ROI.

Offering virtual card, both STP and traditional, can provide value to the vendor.

• Card processing based on vendor preference. With virtual card options, vendors can leverage existing terminal processes or take advantage of a touchless payment process with STP.
• Better visibility into payments. Vendors receive detailed payment notification and consolidated payment reconciliation information at the same time the card transactions processes (manually or automatically via STP).
• More timely payments. STP utilizes real-time payment processing, eliminating the wait time for deposits associated with check and cash payments.
• Fast, easy online setup. For vendors who leverage traditional or STP – like the one offered by FIS® – enablement is quick and easy.

How does an STP payment via virtual card work?

With an STP via virtual card payment, the vendor receives an email notification of the payment with remittance data passed along by the payer. Funds are delivered to the vendor’s approved bank account within the settlement timing, typically within 24 to 48 hours.

Why is it important for businesses to implement STP via virtual card?

Demand for digital payment options is increasing, and STP helps businesses meet their customers’ expectations for a streamlined payment experience. STP also gives vendors ease of automation in the accounts receivables process so they can get paid faster, securely and more reliably.

Additionally, STP provides an option for businesses that do not have an established process to manage the processing of traditional virtual card payments. It enables a digital payment experience for vendors that are not interested in or unable to accept cards but want to move away from ACH or check payments. STP also accommodates the differences in paying relationships between vendors and payers by offering another way for payers to pay by card instead of ACH or check.

Lastly, STP streamlines the virtual card process by eliminating manual steps such as opening emails, capturing data and entering the virtual card data into a terminal for the card payment to be processed. By easing these processes, businesses save time and resources in their accounting practices.

How does a business start accepting STP payments?

With FIS, you can begin processing STP payments within two to three business days by following these steps:

1. Complete an online application, which requires company and bank account information. Any of your company owners or authorized users can sign the application.
2. Be assigned a merchant identification number (MID) account for STP payments to be deposited to your selected bank account. A new MID is required unless your current MID is enabled for STP payments. You will not be charged for your MID account if you choose to discontinue STP payments.
3. Once your application is approved and your account is assigned an STP-enabled MID, you can begin processing STP payments. Funds for STP payments will be deposited within the typical settlement timing, usually within 24 to 48 hours.

To find out more about the benefits of STP for your business, visit Integrated Payables | AP Automation Software | FIS (fisglobal.com).