You can make payments from your disbursement bank accounts in multiple

ways: printed checks, wire, or a variety of electronic payments including

electronic funds transfer (EFT), electronic data interchange (EDI), and XML.

Electronic and Wire Methods

The Electronic method enforces the existence of a supplier bank account
and the Wire method does not. Therefore, you use the Electronic payment
method to generate instructions to your bank to make payment to a
supplier bank account. You use the Wire payment method to record
payment when you have used a process outside of your Oracle Payables
system to instruct your
bank to pay a supplier.

Electronic
You use the Electronic payment method when Payables will create
instructions for your bank to make payment to a supplier bank account.
Typically, this communication is an electronic file that instructs your
disbursement bank to pay your suppliers, and is in the specific format that
your bank requires. However, you should use the Electronic payment
method whenever you need to generate a document that requires a
supplier bank account. For example, use it if your Payables system is set up
to print letters that you send to your bank to request that the bank make an
electronic funds transfer directly into the supplier's bank account. Payables
ensures that you have recorded supplier bank account information when
you use the
Electronic payment method. Typically, to pay invoices with the Electronic
payment method, users use a payment document with a Computer
Generated disbursement type and use a payment batch or Quick payment
to create a payment instruction file. The payment instruction file is saved in
the ap.out directory for delivery to the bank, unless one of the following
features is used to automatically transmit the instruction file to the bank: e-
Commerce Gateway (for EDI payments), Automatic Bank Transmission, XML
Payment Processing. However, you can use localizations, or custom
payment methods and payment formats to create any type of
communication with your bank when you use the Electronic payment
method.

Electronic An electronic funds transfer to the bank of a supplier. You create electronic
payments either through the e-Commerce Gateway, or by delivering a payment batch file to
your bank. For both methods, Payables creates a file during payment batch creation. If you are
using the e-Commerce Gateway to create the file of payments, an EDI translator is required to
create the EDI Formatted file prior to delivering it to your bank. For electronic funds transfers,
the file is formatted and delivered to your ap. out directory for delivery to your bank.

e-Commerce Gateway - If you will be transmitting an EDI formatted file to the bank,
you will attach a format program to the payment document you define that creates a flat
file based on an e-Commerce Gateway map. You will take this flat file and translate it
to an EDI file format using an EDI translator. The EDI formatted file is sent to the
bank.

EFT - If you will be sending electronic funds transfer (EFT) instructions to your bank,
you will attach a format program to the payment document you define that creates an
EFT formatted flat file.
Note: If you are making electronic payments with e-Commerce Gateway, during
formatting, the Remittance Advice Outbound Extract Program from the e-Commerce
Gateway application automatically formats the payment batch and creates a flat file in
your e-Commerce Gateway output directory. If you are making electronic payments
without the e-Commerce Gateway, you can deliver the output file to your bank for
processing. The output file is stored in the Payables output directory. Its name is created
by appending a period and the concurrent manager request number to your login userid
(for example, SYSA DMIN.12345)

If the payment method is Electronic, you must wait for confirmation from the bank
before you can confirm your payment batch

Overview of Electronic Payment Options

Creating Electronic Payments without Oracle eCommerce Gateway

Follow nearly the same steps as for payment batch. However instead of printing the
checks, file of formatted payments is sent to your bank for disbursement to supplier
bank account

Oracle Payables > Payments >Electronic Payments > EFT Payments without e-
Commerce Gateway

Pre-Requisites for processing electronic payments

When you define payment formats select the appropriate electronic payment method.
Define remittance bank accounts & payment documents that you will use to create
electronic funds transfer (EFT) payments. Setup supplier & supplier sites with bank
accounts that receive electronic payments. When you enter the invoices that
you want to pay, enter electronic as the payment method.

Oracle Payables > Payments > Electronic Payments

Oracle Payables > Payments >Electronic Payments > Electronic Payments with e-Commerce
Gateway
Prerequisites for using oracle eCommerce gateway Define a payment document that
uses the EDI outbound program format. Define trading partners in e-Commerce
gateway. Enable the outbound payment transaction order for the bank branch. Define
any code conversions for transactions.
Using Oracle e-Commerce gateway
1 Setup suppliers for EDI transactions & assign electronic as method of payment & EDI
as the payment format.
2 Setup supplier bank accounts
3 Define a unique pay group
4 Create disbursements bank account for EDI payments
5 Create a payment document with the payment format of EDI outbound EDI outbound
payment file

1 Use EDI translator to transit the formatted payment data to your bank for
disbursement.
2 You can then define a payment document that uses the EDI outbound program
payment format and assign this document to the bank account from which you will
disburse payment.

Creating EDI payment batches

You can initiate a payment batch using a payment document associated with the EDI
outbound program payment format. When you format the payment, Oracle e-
Commerce gateway automatically formats the batch and creates a flat file in your e-
Commerce gateway output directory. Oracle e-Commerce gateway sends the file
to your EDI translator & then to your bank.

1) Need to capture Bank Details for each Supplier Site

2) EDI (Electronic Data Interchange) Payment Method This indicates how this
electronic payment will be made
3) EDI Payment Format If you selected Automated clearing House (ACH) as the
EDI Payment Method, you must also specific EDI Payment Format. This format
indicates type of information to be transmitted with the funds
4) EDI Remittance Method The EDI remittance method indicates which party is
responsible for sending the remittance advice to payee
5) EDI Location is used by e-Commerce Gateway for electronic transmission of
information. After you set up your supplier sites, you link them to trading
partners you define in e-Commerce Gateway. The EDI ID Number field is used
only by Energy.
6) Payment Method - Electronic - You generate an electronic payment file that you
deliver to your bank to create payments. Use Electronic if the invoice will be
paid using EFT or EDI
7)

XML Payments - Automatic Confirmation

Enable this option if you use the XML Payments feature and want the
system to automatically confirm payment batches that generate
Process Payment Request XML messages. If you enable this option,
then when your system receives a Confirm Business Object Document
XML message from your bank that indicates that the XML payment
transmission was successful, the system automatically confirms the
payment batch that generated the payment XML message. When the
system automatically confirms a payment batch, the user who
formatted the payment batch receives a workflow notification that
the payment batch was confirmed.

http://www.oracle.com/us/media1/057267.pdf

Difference between the Electronic and Wire payment methods

In short, the Electronic method enforces the existence of a supplier bank account and
the Wire method does not. Therefore, use the Electronic payment method to generate
instructions to your bank to make payment to a supplier bank account. Use the Wire
payment method to record payment when you have used a process outside of your
Oracle Payables system to instruct your bank to pay a supplier.
Electronic
Use the Electronic payment method when Payables will create instructions for your
bank to make payment to a supplier bank account.
Typically, this communication is an electronic file that instructs your disbursement
bank to pay your suppliers, and is in the specific format that your bank requires.
However, you should use the Electronic payment method whenever you need to
generate a document that requires a supplier bank account. For example, use it if your
Payables system is set up to print letters that
you send to your bank to request that the bank make an electronic funds transfer
directly into the supplier's bank account. Payables ensures that you have recorded
supplier bank account information when you use the Electronic payment method.
Typically, to pay invoices with the Electronic payment method, users use a payment
document with a Computer Generated disbursement type and use a payment batch or
Quick payment to create a payment instruction file. The payment instruction file is
saved in the ap.out directory for delivery to the bank, unless one of the following
features is used to automatically transmit the instruction file to the bank: e-Commerce
Gateway (for EDI payments), Automatic Bank Transmission, XML Payment
Processing.
However, you can use localizations, or custom payment methods and payment formats
to create any type of communication with your bank when you use the Electronic
payment method.

Wire
Use the Wire payment method to manually record payment when you have used a
process outside of your Oracle Payables system to instruct your disbursement bank to
pay a supplier. Oracle Payables does not require supplier bank account information
when you use the Wire payment method.
When you define payment documents for these payments, we recommend you use the
Recorded disbursement type because you are simply recording a payment made outside
of the system. Further we commend that you record the transaction with a manual
payment.
(However, the system will allow you to use any disbursement type. For example, some
users who regularly record Wire payments for multiple suppliers use payment
documents with the Computer Generated disbursement type, create an electronic
payment batch, and then delete the resulting electronic file.)

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