A New Method for the Payment of Bills and the Transfer of Credit

ABSTRACT

The transfer of credit and the processing of receivables play important roles in most business systems. Present procedures require a dual handling of payments— they are processed both by the payee and again by the banks involved in the transfer of credit. The banks must necessarily process payments made by check; it is therefore reasonable to inquire whether the processing now required of the payee is not largely redundant, and whether it would not therefore be profitable to alter the present system. Three questions deserve examination: Can the present system be simplified? Will simplification lead to net savings? How should the savings be shared?

REFERENCES

• 1: GREGORY, R. H. AND JACOBS, H., JR., A study of the transfer of credit in relation to the banking system, Dynamic Analysis and Control Report No. 87, M.I.T., Cambridge (July 1954).
• 2: JACOBS, H., JR., A proposed system for the transfer of credit, Dynamic Analysis and Control Laboratory Research Memorandum No. R.M. 7200-1, M.I.T., Cambridge (October 1954).
• 3: Knxvs, A. L., Drafts by payee for bills on rise, The New York Times, Section 3, September 23, 1956.
• 4: Letting bills pay themselves, Business Week, October 27, 1956.
• 5: Magnetic ink character recognition--the common machine language for check handling, Subcommittee Report, Banking--Journal of the American Bankers Association, Vol./49, No. 2 (August 1956).
• 6: COTTLE, W. W., Draft plan for paying premiums and other installment payments, Banking---Journal of the American Bankers Association, Vol. 48, No. 11 (May 1956).
• 7: RANDALL, H. E., Bank Management Commission recommends against draft plans, Banking--Journal of the American Bankers Association, Vol. 49, No. 11 (May 1957).

INDEX TERMS

Primary Classification:
  J. Computer Applications
  J.1 ADMINISTRATIVE DATA PROCESSING
      Subjects: Financial (e.g., EFTS)

General Terms:
Design, Management, Performance