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School of Business | Department of Information and Service Economy | Information Systems Science | 2013
Thesis number: 13164
Diffusion of the international creditor reference standard
Author: Aalto, Aleksi
Title: Diffusion of the international creditor reference standard
Year: 2013  Language: eng
Department: Department of Information and Service Economy
Academic subject: Information Systems Science
Index terms: tietotalous; knowledge economy; tietojärjestelmät; information systems; innovaatiot; innovations; diffuusio; diffusion
Pages: 82
Full text:
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Key terms: diffusion of innovation; international creditor reference standard; Single European Payment Area; payment reconciliation; Real-Time Economy
The aim of this study is to determine which perceived attributes of the Diffusion of Innovations theory affect the diffusion of the international creditor reference standard and to what extent. The purpose of the international creditor reference standard, RF, is to automate the reconciliation of the payment to the invoice. The automation of reconciliation is believed to lead to cost savings and mistake reduction. In order to determine the potential adopters' views on RF, an academic study on the perceived attributes of RF is needed. This study will focus on the view of the creditor, that is the party that sends the invoice to the payer, and whose responsibility it is to reconcile the payment to the invoice.

To gain insight into the organizations considering RF adoption, case interviews were chosen as the main source of empirical evidence in this study. Four internationally operating Finnish companies handling international payments were interviewed for the cases. The case companies were selected from different industries in order to form a more comprehensive view of cross-border payment handling amongst creditors. The case company interview questions were devised according to the Diffusion of Innovations theory, with emphasis on the perceived attributes of innovations. A series of organization background questions was also included. A supportive survey was also created, and its results discussed.

Relative advantage was found to be the most important perceived attribute of RF innovation. Based on the case interviews and survey results, the main advantages of RF adoption are cost savings, reductions in reconciliation mistakes and the automation of payment handling processes. Information system compatibility and complexity was viewed as the largest risk and cost factor in RF adoption, but based on payment system vendors interviews, these fears are mitigated by the inclusion of RF support in general payment system upgrades.

The results of this study strongly support the notion that real-time automated processes lead to cost savings through the reduction of man-hours and mistakes within processes. These are the relative advantages of the RF creditor reference standard over both manual payment reconciliation methodologies as well as existing national creditor reference standards. The ability to automatically reconcile cross-border payments makes international transactions both faster and less costly to handle.
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