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:

• 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:

• 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.
• 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.
• 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.