Corporate Trade Payment (CTP)
Contents
Exploring the Evolution of Corporate Trade Payment (CTP) Systems
Corporate Trade Payment (CTP) was once a prominent method of electronic fund transfer utilized by corporate and governmental entities. However, with technological advancements and changing demands, the CTP system became obsolete. Let's delve into the history, mechanics, and eventual demise of CTP, along with its successor, the Corporate Trade Exchange (CTX) system.
Unraveling the Legacy of Corporate Trade Payment (CTP)
Introduced in 1983, the CTP system aimed to enhance the capabilities of the Automated Clearing House (ACH) system, which had been in operation since 1974. Unlike the limited message attachment capacity of the ACH system, CTP allowed for the inclusion of extensive payment advice or relevant information along with electronic payments.
Understanding the CTP System
The CTP system expanded the message attachment capability, accommodating up to 4,999 additional 94-character messages. This feature facilitated the inclusion of essential payment details, thereby streamlining the payment process for both payors and payees. Despite its benefits, the CTP system was more suited to complex remittances rather than simple, single-invoice payments.
The Downfall of CTP and Emergence of CTX
Despite its initial promise, the CTP system faced several challenges, leading to its eventual demise. With the passage of the Debt Collection Improvement Act of 1996, the CTP system was phased out, paving the way for the introduction of the Corporate Trade Exchange (CTX) system.