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A bank credit card system (Visa, Mastercard), which at
present is oriented toward consumer retail industries could be modified to
become an ideal form of controlled, cheque-less account settlement
mechanism. Under the model, payment would be supplier initiated, rather
than customer directed. The carrier would initiate the transaction,
rather than the freight forwarder or customs broker sending payment.
There would be three types of transactions:
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for an authorization code in which a specific amount would be
pre-approved for debit at an undetermined later date (within time limitations).
-
deferred payment transaction in which a specific amount would be
entered for debit at a specific future date, e.g.: net 30 days.
-
simple on-line debit/credit transaction for a specific amount
Because the transaction would be payee (supplier)
initiated against the payer’s (customer’s) purchase card account, there
would be no need to for freight cashiers at the carrier side and no need
for the freight forwarder or customs brokers to issue cheques against
freight bills and send couriers to make payment and collect delivery
orders. The broker or forwarder would simply receive an arrival notice
and freight bill and his purchase card account would simply be debited
upon physical arrival of the shipment. The transactions would appear at
each party’s web banking sites, on-line.
The necessary modifications to the present bank credit card service
system would be:
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the addition of a "data field" per transaction to
accommodate invoice number.
-
the addition of a "post-dated" (deferred
settlement) field, to indicate the debit/credit
execution date where credit terms are involved.
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the addition of a "suppliers field", in which the
purchase card account can specify the merchant
account numbers that are authorized to transact
on-line debits and credits with the purchase card
account.
-
the addition of a "maximum limit" field to allow the
purchase card account to limit the amount of any one transaction
by each specified supplier.
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US Dollar accounts (typically freight payments are in US Currency).
Control
The reason why a direct debit system was never initiated
in the transportation industry is perhaps due to the reluctance of freight forwarders
and customs brokers to allow carriers access into their bank accounts. Under
a direct debit system, transactions appear on monthly bank statements after the fact, or
in the case of on-line banking, the next business day. In addition, there is no data
supporting individual debit items, such as invoice number, or a dispute
mechanism for erroneous debits. Similarly, customer initiated bank transfers
are impractical due to the relatively small sums and large number of transactions
involved as well as the difficulty for the payee to determine who a deposit was from and
for which invoices.
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