|Oracle Payments Implementation Guide|
Part Number E13416-05
Oracle Payments is a product in the Oracle E-Business Suite of applications, which serves as a funds capture and funds disbursement engine for other Oracle applications. As the central payment engine, Oracle Payments processes transactions, such as invoice payments from Oracle Payables, bank account transfers from Oracle Cash Management, and settlements against credit cards and bank accounts from Oracle Receivables. Oracle Payments provides the infrastructure needed to connect these applications and others with third party payment systems and financial institutions.
The centralization of payment processing in Oracle Payments offers many benefits to deploying companies. Companies can efficiently centralize the payment process across multiple organizations, currencies, and regions. Better working capital management can be achieved by providing cash managers visibility into cash inflows and outflows. Additionally, a full audit trail and control is supported through a single point of payment administration.
Oracle Payments is integrated with financial institutions and payment systems for receipt and payment processing, known as funds capture and funds disbursement, respectively. Funds capture refers to the electronic retrieval of funds, typically by a payment system on behalf of the deploying company, from payers, such as customers, who owe debts to the deploying company. The payer, in this case, provides Oracle Payments with pertinent payment information, such as a credit card, debit card, or bank account number. Funds disbursement, on the other hand, is the process of paying funds owed to creditors, such suppliers.
Oracle Payments supports the following electronic payment methods for funds capture payments:
PINless debit cards
bank account transfers
Oracle Payments supports several payment methods for funds disbursement payments, including:
electronic funds transfers
The following sections describe the general features of Oracle Payments.
Financial institutions and payment systems require compliance with specific payment formats to disburse or capture funds. A large part of the effort and cost involved in establishing a relationship with a payment system is ensuring that a valid, correctly formatted payment file or message can be produced. To minimize this effort, Oracle Payments provides a formatting solution based on standard XML technology.
Formats are created as templates in Oracle XML Publisher and applied to an XML data file produced by Oracle Payments. These templates can be created or modified with minimal effort, using a standard text editor, such as Microsoft Word. Consequently, when a payment system or financial institution requires a change to its format, you can easily and quickly make the change.
Special consideration has been given to the complexity of creating fixed position and delimited formats. Oracle XML Publisher's eText feature is used for these format types. eText allows the format layout to be presented in an understandable tabular structure.
Oracle Payments offers an extensive library of payment formats that support various types of payment files and messages. EFT disbursements, printed checks, ACH debits, bills receivable remittances, and credit card authorizations and settlements are all supported. Deploying companies can use any format in this library. If a format is required, but it is not provided, it is easy to copy a similar format template and use it as the basis for creating a new format. This feature greatly speeds implementation and testing, as well as reduces implementation costs.
In payment processing, it is critical to ensure that payment messages and files sent to third party payment systems and financial institutions are both valid and correctly formatted. If this does not occur, the payment process is slowed and a cost is incurred to resolve the issue. To achieve straight through processing, Oracle Payments introduces a flexible way to ensure that payment-related validations are implemented.
Oracle Payments provides an extensive library of payment validations that are associated with the supported payment formats. Payment validations are implemented using a flexible framework that allows you to add new validation rules. Deploying companies can choose between using the prepackaged library of validations, using newly added validations, or using a combination of prepackaged and newly added validation rules.
The timing of validation execution also has flexibility. Payment validation rules can be assigned early or late in the payment process. Alternatively, a combination of early and late validation rule assignment can be used. You have flexibility in assigning validation rules to support your business model. For example, assigning and executing validation rules early in the payment process may be best for a decentralized payment environment. On the other hand, validation execution later in the process may be optimal in a shared service environment, where payment specialists can resolve any validation failures.
Oracle Payments serves as a payment data repository on top of the Trading Community Architecture (TCA) data model. The TCA model holds party information. Oracle Payments stores all of the party's payment information and its payment instruments, such as credit cards and bank accounts. This common repository for payment data provides data security by allowing central encryption management and masking control of payment instrument information.
Oracle Payments provides secured electronic payment file and payment message transmission, as well as transmission result processing. All previously existing electronic transmission features in Oracle Payments, Oracle Payables, and Oracle Globalizations are obsolete and have been replaced by the central Oracle Payments engine.
The following industry-standard transmission protocols are supported:
Companies model their business units in various ways to obtain performance improvements and cost savings. Oracle Payments can be configured to support a variety of payment models. It can operate in a completely decentralized model where it is part of accounts payable or collection administration within each business unit. If your company has centralized financial activities in a shared service center, Oracle Payments also works to efficiently support the shared service center model.
Oracle Payments' flexibility also provides support to companies that wish to use a payment factory model. A payment factory allows operating units to maintain their own accounts payable and other payment administrative functions. The role of the payment factory is to handle communication and transactions with the deploying company's banking partners. Invoice selection can be done in Oracle Payables within a single operating unit. Then a payment factory administrator using Oracle Payments can consolidate payments from different operating units into a single payment file for transmission and settlement, thereby reducing transaction costs.
Oracle Payments supports Multi-Org Access Control throughout its processes to build payments and create payment files, as well as in the dashboard pages, which are provided for you to monitor and manage the payment process. Multi-Org Access Control enables you to efficiently process business transactions by processing and reporting on data that resides in an unlimited number of operating units, within a single applications responsibility. Data security is maintained using security profiles, which are defined for a list of operating units and data access privileges.
Oracle Payments' funds disbursement features support the process to pay funds owed to creditors, such as suppliers. Oracle Payments supports functionality to achieve straight through processing of electronic funds transfers and the ability to format and manage check or other payment document printing.
The Oracle Payments disbursement engine enables you to greatly simplify your procedures for managing complex payment processes that span multiple payment methods, formats, check stocks, transmission protocols, currencies, organizations, and bank accounts.
The Oracle Payments funds disbursement process enables users of Oracle Payables and other products to focus on the invoice selection process before submitting the documents payable to Oracle Payments for payment processing. This is achieved by splitting the payment build process into two processes. The first process creates payments by grouping documents according to various rules, such as the payment method and currency. The second process then aggregates payments into payment instruction files, formats the files, and handles additional processing, such as printing and transmission. This aggregation process can be done for payments created from multiple document selections and submissions to Oracle Payments.
With Oracle Payments, accounts payable managers can simplify their processes by submitting fewer invoice selection batches, with each one spanning multiple payment methods, formats, bank accounts, and payment currencies. Invoices can be selected for payment based on business reasons, such as maximizing discounts. Additionally, payment administrators can lower the cost of the disbursement process by creating check runs and EFT payment files that span multiple invoice selection batches and multiple organizations.
Oracle Payments offers end-to-end electronic payment processing that includes validation, aggregation, formatting, and secure transmission of payments to financial institutions and payment systems. Straight through processing results in lower costs associated with the disbursement process. The formatting framework, flexible validation model, and electronic transmission capability greatly minimizes any need for writing payment customizations.
Oracle Payments offers flexible setup to configure funds disbursement processing. Flexible setup ensures an implementation that best supports a controlled and efficient disbursement flow. Configuration options are available in the following areas:
Payment Methods: Each document to be paid, such as an invoice, requires the specification of a payment method to indicate how it will be handled in the funds disbursement process. Payment methods can be defined as broadly or as narrowly as appropriate. Rules can be defined to specify when payment methods can be used on documents and how to default payment methods on documents when they are created.
Processing Rules: The payment method on a document is linked to user-defined funds disbursement processing rules configured in Oracle Payments. Oracle Payments holds these funds disbursement processing rules in an entity called the Payment Process Profile. You can configure as many payment process profiles as you need for your payment processes. Each payment process profile contains rules for building documents into payments, aggregating payments into payment instruction files, and formatting payment instruction files. Processing rules for printing checks, transmitting electronic files, generating separate remittance advice notifications, and other options can be easily configured.
Oracle Payments provides a funds disbursement dashboard for managing the funds disbursement process. The funds disbursement dashboard allows payment administrators to manage every aspect of the process across multiple organizations from a central location in the application. This benefits companies by providing full visibility of a payment as it moves through the financial supply chain. Additionally, the single location for monitoring the payment process also helps streamline process management.
Payment administrators can use the funds disbursement dashboard to monitor the payment process and ensure that it is running smoothly. If any problems arise during the process, they are highlighted in a pending actions region. This is also the place where notification of any required actions is shown. Actions may be required based on the configuration choices made during implementation. The funds disbursement dashboard enables the payment administrator to navigate to the appropriate area to take corrective or required action, based on the pending issue selected.
Payment administrators can take the following actions from the funds disbursement dashboard:
review validation errors
review and optionally modify proposed payments
transmit payment files or retry failed file transmission processes
initiate check printing and record printing results
Oracle Payments enables you to easily initiate check printing, recover from printing errors, and record print results.
In Oracle Cash Management, check stock can be set up as prenumbered or numbering can be printed as part of the check format, which is common for blank checks. Oracle Payments uses this setup to present the payment administrator with the appropriate print actions for different check stock types. The funds disbursement dashboard guides the payment administrator to each printing action that can be performed.
Oracle Payments provides country-specific payment features. These global features are available in all deployments of Oracle Payments without any limitation by geography, while still enabling you to configure processing by region, where appropriate.
Most of the global payment features support the funds disbursement process. For example, Oracle Payments enable you to:
provide payment-level text messages for the payee
conditionally report payments to a country central bank
specify payment codes required by a financial institution for instructions on transaction handling, payers of bank charges, and statutory payment reasons
configure the payment process to place formatted payment files in secure file directories
All payment formats used by Oracle E-Business Suite applications for the funds disbursement process have been consolidated as Oracle XML Publisher templates and are used by Oracle Payments. These formats include all those previously supported in Oracle Payables, Oracle U.S. Federal Financials, and Oracle Global Financials.
The following industry standard payment formats are supported for use by all products that integrate with Oracle Payments:
ANSI X12 820
Oracle Payments supports remittance advice reporting and notifying a payee of the remittance detail when a payment is made. The notification process enables you to set conditions for producing remittance advice. Configuration is also supported to set how the remittance advice is to be delivered to a payee: via e-mail, fax, or printing and sending manually. All of these features enable you to better support your payment relationships with suppliers or other payees.
Funds capture features support the process to electronically receive funds owed deploying companies by debtors, such as customers. Oracle Payments supports authorization and settlement of funds against credit cards and PINless debit cards, refunds to credit cards, electronic funds transfers from bank accounts, and formatting of bills receivable.
Note: Oracle Receivables retains the functionality of lockbox processing and electronic upload of remittance messages.
Businesses and their customers require flexible payment methods when paying for goods and services. Oracle Payments supports credit cards, purchase cards (levels 2 and 3), PINless debit cards, funds capture electronic funds transfers, and the transmission of bills receivable transactions.
Oracle Payments processes credit card validation, authorization, and funds capture. Credit card validation can be done independently of authorization. This helps the merchant save transaction fees by preempting authorization requests on invalid credit cards. Oracle Payments also processes funds capture for credit card transactions that have been manually authorized over the telephone, which is a requirement for certain businesses.
Oracle Payment's support for funds capture electronic fund transfers (EFT) and bills receivable transmissions enables you to eliminate paper-based transactions, thus reducing administrative manual processing and errors. You will also receive funds faster with EFT than with traditional paper checks.
Oracle Payments supports PINless debit card funds capture transactions. Sometimes referred to as Debit Bill Pay, this payment method is allowed by the debit networks in certain industries, including utilities, telecom, cable/satellite, government, education, and financial services.
Online validation for electronic funds transfers is supported by Oracle Payments through APIs. The validation service is provided by some payment systems to perform validity checks on the payer bank account to be debited. Typically this service verifies that the bank account number is valid and not cited for fraudulent payment activity.
Oracle Payments extends its support of electronic funds transfer by adding third party certifications for Paymentech and Concord EFSnet.
Oracle Payments is a key component of Oracle's E-Business Suite and integrates with other Oracle applications, such as Oracle Receivable, iStore, and Order Management. Through these integration points, Oracle Payments supports the payment processing needs for a variety of business activities.
Credit Card Encryption is an advanced security feature within Oracle Payments that enables Oracle Applications to encrypt credit card data. You can access this credit card security feature setup easily by selecting the Oracle Payments Payment Administrator responsibility and then clicking the System Security Management link. Oracle Payments consolidates the varying levels of credit card security support within different products of the Oracle E-Business Suite so that setup and management of address verifications, capture of card security codes, and masking of credit card numbers, ensures a consistent implementation of credit card security functions throughout the funds capture process.
Note: Any internal credit card numbers, such as company-owned or employee credit cards, are not impacted by the Credit Card Encryption feature.
Use of the Credit Card Encryption feature assists with your compliance with the cardholder data protection requirements of the Payment Card Industry (PCI) Data Security Standard and with Visa's Cardholder Information Security Program (CISP). The Visa program is based on the PCI Data Security Standard. When the feature is enabled, credit card numbers for external third party payers, such as customers or students, are encrypted.
When Credit Card Encryption is enabled, masking functionality differs between Oracle Applications. For example, in Oracle Receivables and Oracle Service Contracts, when Credit Card Encryption is enabled, credit card numbers are masked in the following format with the last four digits displayed: XXXXXXXXXXXX1234, whereas, in Oracle Order Management, a changed profile option no longer controls masking of credit card numbers.
Adoption of the Credit Card Encryption feature should be part of the implementation of a complete security policy, specific to your organization. For example, your security policy should include a regular schedule to rotate keys to secure your credit card data.
For general guidelines on securing Oracle E-Business Suite applications products, see Best Practices for Securing Oracle E-Business Suite, Oracle MetaLink Document 189367.1.
Oracle Payments support for both processor and gateway models enables customers to choose the payment processing options that suit their business.
Processor and gateway model payment systems can be integrated with Oracle Payments for credit cards, PINless debit cards, and bank account transfers, using the product's format and transmission model. Oracle Payments payment system integration model has extensible fields that can be used in a custom implementation with payment systems that require additional information. This extensibility can be particularly useful for international implementations of Oracle Payments.
In addition, Oracle Payments supports out-of-the-box integration with leading third party payment systems. These payment systems include Paymentech, First Data Merchant Services, and Concord EFS. Other payment systems, such as Verisign, offer their own out-of-the-box integrations with Oracle Payments.
Oracle Payments supports multiple payment processing systems operating simultaneously for funds capture transactions and provides a powerful routing system that gives businesses and merchants control over funds capture transaction processing. Payment requests are routed to payment processing systems based on flexible business rules defined by the merchant. For example, you can route payment transactions based on the type of transaction or amount of payment
Oracle Payments offers a centralized, configurable funds capture processing setup. This ensures an implementation that supports consistent and seamless funds capture processing. The configurable funds capture processing setup can be grouped into the following areas:
Payee Configuration: A payee is defined for one or more operating units in the deploying company that processes payments. The payee setup provides various options for payment processing and links operating units to the payee.
Routing Rules Configuration: Routing rules can be configured to specify how a transaction is processed. For example, this setup determines the payment system to which a transaction is sent.
Funds Capture Processing Rules Configuration: Oracle Payments holds funds capture processing rules in an entity called the Funds Capture Process Profile. You can configure as many funds capture process profiles as you need for your payment processes. Each profile contains the configuration for formatting and transmitting authorization messages and settlement files. Additionally, specifying rules for aggregating settlements into batches, limiting the number or amount of settlements in a batch, notifying payers of settlements, and processing acknowledgements can be easily configured.
Oracle Payments offers a user interface, known as the funds capture dashboard, for managing the funds capture process. The funds capture dashboard provides an overview of the payment process status. This results in greater insight into rejections received from payment systems and into process failures, such as communication errors.
All payment formats used by E-Business Suite applications for the funds capture process have been consolidated as Oracle XML Publisher templates and are used by Oracle Payments. These formats include Oracle Globalizations' direct debits, bills receivable, and Oracle Receivables' remittance formats.
Oracle Payments processes payment requests when requested or via an offline scheduled process, based on the type of payment request and payment system. A scheduling program enables Oracle Payments to process gateway-bound payments in an offline mode when a source product requests it. When an E-Business application calls Oracle Payments to make an offline payment request, the payment information is stored in Oracle Payments and picked up by the scheduling program so that the payment gets settled by the due date (or settlement date). At the same time, Oracle Payments handles processor-model payment requests as required by most processors: online requests for authorizations and batched offline requests for follow-up operations.
Oracle Payments has consolidated notification letters from Oracle Globalizations into an Oracle XML Publisher format. These notification letters are generated and sent when a payer's bank account is debited to capture funds for payment. The Oracle XML Publisher format supports notification for all types of automatic funds capture settlements supported by Oracle Payments, including card payments or bank account transfers. The notification process enables you to configure how a notification is to be delivered to a payer: via e-mail, fax, or printing and sending manually. These notifications help deploying companies better support their payment relationships with customers or other payers.
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