Study Calls for Standardization of XML-Based Bill Payment Systems.

The financial services industry appears to be lagging behind other industries in embracing extensible markup language standards for payment-related demands of electronic commerce, according to a recent study from The TowerGroup here.

But the financial services industry is now beginning to recognize the vital role XML will play in electronic payments, according to the consulting company.

Across the financial services industry, e-payment standards have reached only an interim stage in their evolution. Banks and industry bodies are tending toward a tactical approach, experimenting with the implementation of XML-based specifications to address industry pain points and create new online opportunities.

The TowerGroup's research explores the impact that XML standards will have on different sectors of the payments arena, as well as some of the major initiatives already underway. Highlights from the research include:

* XML-based schemes add value by streamlining interaction between organizations. Within an organization, they can serve as a bridge between front-end channels and back-end payment processing, customer support and legacy systems, and provide a range of other processing efficiencies.

* Automation is the most important driver of XML adoption in payment applications. XML will be widely used to streamline Web-based business processes, facilitate payment communication and reduce expenses. It will also offer value by simplifying interactions, providing consistency and enabling payment stakeholders to quickly adapt to market requirements without costly investments in multiple applications.

* Adoption and usage of early XML-based payment approaches are beginning to forge de facto standards. Numerous initiatives will continue for the foreseeable future as banks, service providers and third parties seek successful value propositions for fledgling XML payment schemes.