Today's blog post comes from an article written by our Senior Product Manager, Rob Haberman. I think it is worth sharing here:

Over the past few months, governments all over the world have been doing everything possible to kick-start their national economies. Hardly a day goes by, that there isn’t a news report about some country launching some kind of stimulus program. Usually, these reports include of mention of astronomical amounts of money being injected into that economy for the good the nation.
Slightly less visible, but equally important is the fact that interest rates have dropped to historic lows. In an effort to thaw “frozen capital” and get credit flowing again, central banks have slashed interest rates to levels never seen before. There are signs that these strategies are starting to take hold, though it will be months before we can say the worst is over.
At the same time, we in the financial community are starting to see the impact of unprecedented legislative and technological change. The advent of the Check Clearing for the 21st Century Act (or Check 21 Act) allows end-users to scan checks and stubs from remote locations and send the images to a distance location. This remote location could be a bank or central remittance processing site. Aiding and abetting this, is the development of powerful low-cost scanners, personal computers and fast, inexpensive Internet access. The net result is Remote Deposit Capture. This technology allows our industry to streamline our workflows while cutting our processing costs and making funds available far sooner. On the other hand, the end users can eliminate expensive couriers and / or the regular check runs to the bank, as well as cutting theft / loss related costs.
In addition, new remittance systems as a whole have become far more durable, reliable and far less expensive to maintain. Software driving these systems has been come extremely stable and flexible enough to meet almost any unique demand. This implies a fast ROI on the purchase of new processing systems.
All of this has created a “perfect storm” of opportunity for remittance processors:
· The evolution of technology and the revolution of legislation allow processors to make significant margin-building improvements to our processes, while helping their customers cut their costs.
· Low-cost capital is becoming available to help finance these investments.
In this environment, it is understandable that, companies are pulling it their horns and examining every major acquisition with extreme care. However, smart managers are always thinking about today and tomorrow. We believe that, for many companies, financing a new, advanced remittance system is too good an opportunity to pass up. Processors gain access to the latest innovations (like Check21 and Remote Deposit Capture), while reducing their maintenance costs and down time. A creative leasing arrangement will help control capex, while rapidly generating real bottom-line benefits.
Situations like this are few, far between and short-lived. Eventually these stimulus packages will have the desired effect and world economies will come out of their collective comas. When that happens, there will be a real risk of severe inflation. This is practically inevitable, given the amount of capital that has been injected into the world’s financial system. As soon as signs of inflation appear, central banks will start raising interest rates, almost instantly. Once that happens, low-cost leases will be a fond memory. For some, a painful one.
It is important to remember that, while the Great Depression was a time of trial for many, a small number of visionaries saw opportunities and seized them. While we are not facing another Depression, the opportunities are clearly on the table.

Are you going to pull up a chair?


About the Author:
Rob Haberman, P.Eng, M.B.A.
R.E. (Rob) Haberman is senior product manager at Purepay Receivables Automation and is responsible for the overall product management of Purepay’s suite of remittance solutions. Rob is a professional engineer and holds an M.B.A. and a Bachelor of Applied Science from the University of Toronto. He can be reached at rhaberman@pure-pay.com