SAP S/4HANA Banking for Payment Centralization is a central payment processing platform which enables financial services to completely streamline all payment processing activities. However, from a quick Google search there is very little information or reading out there on the topic. If you are new to the solution here is a summary of what you need to know.
In short, what is SAP S/4HANA Banking for Payment Centralization?
SAP S/4HANA Banking for Payment Centralization was previously named SAP Financial Services Payment Engine (FS-PE). The solution centralizes payment processing on the S/4HANA platform, consuming payment instructions from numerous sources, and routing these payments to external banks, and to internal bank account management systems. With SAP S/4HANA Banking for Payment Centralization, companies can improve their payment efficiency, reduce costs, and increase transparency and security in their payment processes.
What are the key features and functionalities of the solution?
The solution receives and processes payment instructions through different formats and channels for:
- Internal Transfers
- Payments via Clearing Houses
- Cross-Border Payments - with and without Intermediary Banks
Enrichment and Validations are executed, such as data checks and Fraud and Sanction screenings, to allow the payment to proceed. Errors can be processed automatically to minimise payment rejections.
Payments requiring onwards processing are forwarded to external parties to finalise the payment steps. The Payment Engine will also integrate to Account Management systems such as SAP DM to finalise the payments.
What are the key building blocks of the solution?
- Payment Processing Capability - The solution immediately processes very high payment volumes received from various sources in real time.
- File Handler - The file handler is used to convert payment files into and out from the payment processing engine. Standard converters exist for ISO20022 and SWIFT MT Formats, as well as sample implementations for various clearing houses.
- Payment Routing - Routes & Clearing Agreements are a key master data element, with flexible rules maintained by the key business user. These direct payments to the appropriate target. The target may be external bank triggering onwards payment messages (for example pacs.008) or internal account management system where the payment will be finalised
- Collectors & Queues - After Payment Routing, payments can be forwarded immediately to external banks. Otherwise they can be placed in collectors/queues, until certain criteria (maximum batch value) is reached. At this point, all payments are forwarded together. This is particularly relevant for bulk payment services such as BACS in UK, or SEPA Standard services.
- Account Management Integration - Native integration to SAP S/4HANA Deposits Management or BCA via RFC connection or an integration system such as SAP Process Integration. In addition, a standardised framework exists to build integrations to non-SAP Account Management Systems.
- Service Level Agreement - SLA’s set out the available services, priority and charges that should be applied to an organisation triggering a payment. For example, this enables tiered pricing to be applied to payments, and for exceptions to be applied to individual customers.
- Enrichment & Validation - The E&V framework allows checks to be performed throughout the payment processing lifecycle. Checks may add additional data to the payment, such as IBAN enrichment. These checks can also perform validations against defined rulesets. For example, an E&V check may reach out through integration to a Fraud & Sanction Screening tool, before allowing payment to proceed.
- Correspondence Framework - The Correspondence Framework is responsible for generating and consuming Payment Status updates based on successful or failed payment processing. This offers real-time end-to-end Payment Tracking, complying with the SWIFT GPI initiative.
- Exception Handling Framework - The Exception Handling Framework allows the business users to respond to different errors that might occur during payment lifecycle. A certain error during a payment process might trigger payment reversal actions, require user review or automated correction applied.
- Workflow - Flexible workflow rules can be built for user approval of payments. The workflow can be customised according to certain criteria and take place at different points of the payment processing journey.
Why should organisations consider SAP S/4HANA Banking for Payment Centralization?
Financial Services that need to process high volumes of payments in a secured and robust manner can use this solution to increase payment efficiency, reduce costs and increase transparency throughout the payment process. The key benefits include:
- Centralised Payment Processing - A single platform to rapidly process payments across multiple sources and systems.
- Payment Format Management - File Handler with inbuilt ISO20022 capability and pre-built local templates.
- Connectivity Options - Secured integration via Web Services and File Transfer enable delivery to and from SWIFT, Host-to-Host, EBICS and Bank Platform connections.
- Embedded Controls - Flexible Workflow for Payment Approvals, with inbuilt framework for payment validations.
- Payment Visibility - End-To-End Payment Tracking delivered in real time via Correspondence Framework, compliant with SWIFT GPI.
- Account Management Integration - Framework for AM integration with pre-built integration to SAP DM/BCA.
- Compliance and Security - Compatible with ISO20022 formats, with end-to-end security to restrict visibility and maintain integrity.
What can you expect from working with bancon?
As the original group of developers and architectures of many of the standard SAP Fioneer Banking solutions (emerging from SAP), no one is better suited to support you with your upcoming or in-progress implementation or improvement project. We’ve been continuously innovating the SAP Banking suite in partnership with SAP since its foundational release, and with SAP Fioneer since launch.
Combining our deep knowledge of the technology with financial services to design, develop and implement new product’s that now make up the standard SAP Fioneer solutions used and trusted by millions worldwide. We’ve been the trusted leader in driving transformational experiences using SAP Fioneer Banking solutions for more than 20 years. Powered by our world-class global delivery and obsession with solving complex business problems through innovation.
If you’d like to find out more get in touch.