Communications of the acm

(2001) [9]. 
Cotteleer fig 2 (6/07)
electronic 
payments
check
payments
45
40
35
30
25
20
15
10
5
0
2002
2010
Year
B
2
B
T
ra
n
sa
c
ti
o
n
s
(b
il
li
o
n
s)
Figure 2. Projected growth in B2B
e-payments (2002–2010) [5]. 
 

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Security. 
Since B2B transactions involve multiple
parties, they flow across diverse technology architec-
tures. Each party in an electronic transaction is subject
to the security procedures of other members in its
financial supply chain. Arguably, paper-based payments
are subject to similar security challenges, though they
are well understood and have long been accounted for. 
An added complication with e-payments is that they
are potentially subject to a larger pool of anonymous
attacks. Consequently, existing security tools (such as
encryption technology) may need to be supplemented
by third-party vendors to protect information as it
passes across diverse networks. Improving business con-
fidence in B2B e-payments might be achieved by build-
ing B2B payment solutions into financial networks
already operating with a high degree of security. 
Value proposition uncertainty. 
E-payment networks
(like other networks) are subject to “network externali-
ties,” so the value of participation is contingent on the
size of the network itself; that is, the greater the num-
ber of participants, the more valuable the network is to
each participant. Given that the technical aspects of e-
payment networks are still evolving, it has been difficult
for potential participants to estimate the value of join-
ing and assess the appropriate level and speed of the
related investment. Investment decisions in this context
are influenced by businesses’ perceptions of the likeli-
hood of agreement on the issues related to standards
and integration [7]. 
The value proposition of e-payment networks is fur-
ther clouded by the realization that connecting
accounts for only a portion of the total cost. After the
initial capital investment, businesses must invest signif-
icant financial and human resources in training
employees to use the system. Moreover, banks and busi-
nesses cannot simply abandon their old check-process-
ing infrastructure, as not all B2B transactions
immediately migrate to e-payments. Businesses thus
have an incentive to wait for others to go first, watch-
ing as they build the value of the network prior to join-
ing or waiting to join until they are compelled to do so
by competition or regulation [7]. 
Value dimensions. 
In addition to surmounting key
adoption challenges, businesses must also consider e-
payment technologies in light of their ability to deliver
across multiple dimensions of value. A clear under-
standing of the value drivers of e-payments enable par-
ticipating businesses to better address challenges to
e-payment adoption. In 2004, Charter Consulting, a
management consulting firm, surveyed businesses
across multiple U.S. industries, ranking 10 attributes
based on their perceived value to B2B e-payment users
[2]; in order of importance, they were: 
Offer direct savings vs. paper-based check processing. 
The
direct cost per transaction decreases for e-payments
compared to paper payments; 
Facilitate reconciliation and dispute management.
Find-
ing and retrieving data is simplified in e-payment
systems; 
Provide global coverage. 
Payments can be sent and
received outside the U.S. market; 
Improve control of payment timing and cash flow. 
Pay-
ment is initiated and sent at precisely the time the
business intends; 
Increase visibility of cash requirements. 
Payees can see
scheduled payments and anticipate cash flow; 
Reduce fraud and credit loss potential. 
Payments are sent
through a secure and reliable global network; 
Possess remittance data. 
The system is able to handle
Level 3 remittance data; 
Offer low implementation costs. 
Up-front investment is
relatively minor for all users, and costs are clearly
defined; 
Integrate data and payment information. 
Payments are
bundled with transaction data for simplified integra-
tion into accounting systems; and 
Offer a flexible fee schedule. 
Transaction fees are nego-
tiable.