Reconciliation of Electronic Remittances: A Multi-Level Approach

Digital Technologies have transformed the manner in which payments and remittances are operated in government and corporate sector. Citizens, businesses and government now have several options to send / receive money as compared earlier. These are either fully electronic (Card payment, Net Banking, Mobile payments, Wallet etc.) or semi-electronic (Electronic Fund Transfer, Wire Transfer etc.). Though the front-end services providing various options for electronic payments and remittances did improve significantly over the years, it is necessary that the back-end activities involving reconciliation of these transactions be considered with equal urge and importance. While the outward transactions (electronic payments) are relatively easier to handle, it is the inward transactions (electronic remittances) which need extra care and effort while performing reconciliation. Reconciliation can either be performed at transaction-level or at consolidated level. Though reconciliation is a well-known subject with established rules, the processes and procedures adopted to ensure online reconciliation are emerging. It is in this context that a reconciliation framework on a multi-level approach has been framed to ensure electronic remittances are properly verified, confirmed, settled and accounted. This paper elaborates the framework and the likely dependencies for its effective implementation.