Why has vendor participation in EFT been growing at such a slow rate?
The rate of vendor participation in EFT is attributable to one factor- EFT payments to vendors are usually accompanied by electronic remittance data (such as invoice numbers) that are crucial to vendors, but many financial institutions lack the technical capability needed to receive and transmit the remittance information to vendors. The National Automated Clearing House Association (NACHA) estimates that only 1,250 out of 12,000 financial institutions are currently capable of both receiving and transmitting with electronic payment remittance information that is in human readable form. In addition, those financial institutions capable of processing remittance information often charge their customers for this service. For this reason, the State Controllers Office (SCO) will issue and mail a paper remittance advice to all vendors that are paid through the EFT process, at no charge to the vendor.
