Eleanor White Paper

P R O J E C T E LEANOR
-
A GLOBAL PAYMENTS INITIATION SYSTEM
FROM IDENTRUS LLC*
WHITE PAPER
* THE PROVIDERS OF THE WORLD’S FIRST GLOBAL TRUST SYSTEM
This document is for the reader's general information and evaluation only. While Identrus seeks to provide currently accurate information
herein, Identrus cannot accept liability for any error or omission. In addition, the service described herein may change and information
presented herein may become inaccurate. This document should not be construed to constitute any offer, and is not intended to create any
contract, obligation, or liability whatsoever. Eleanor ™ is a service mark of Identrus LLC.
Eleanor_White Paper.doc V1.01 -1- © Identrus LLC, 2002. All rights reserved.
Table of Contents
ABSTRACT ...........................................................................................................................................3
DOES THE WORLD NEED ANOTHER PAYMENT MECHANISM?.........................................4
WHAT IS ELEANOR?.........................................................................................................................5
FUNCTIONALITY ..................................................................................................................................5
TECHNICAL OVERVIEW .......................................................................................................................8
Proven Open Standards...................................................................................................................8
Vendor Neutrality............................................................................................................................8
The 3 Layered Model.......................................................................................................................9
Distributed Architecture..................................................................................................................9
ELEANOR OPERATING RULES ............................................................................................................10
ELEANOR DELIVERS VALUE TO BUSINESSES AND FINANCIAL INSTITUTIONS........10

SCOPE AND SIZE OF OPPORTUNITY ...................................................................................................10
AUTOMATION BENEFITS ....................................................................................................................12
FINANCIAL SERVICES BENEFITS ........................................................................................................13
Example – An Eleanor Certified Payment Obligation in Action...................................................13
Transferable Obligations ..............................................................................................................15
PROFITABILITY OF ELEANOR SERVICES ............................................................................................15
THE ELEANOR SYSTEM .....................................................................................................................16
CONTACTS.........................................................................................................................................17
APPENDIX A – SUMMARY ELEANOR BENEFITS....................................................................18
APPENDIX B – ELEANOR DISTINGUISHING FEATURES .....................................................18
Abstract
Eleanor1 is an initiative established by a leading international banking consortium to “fill the B2B
ePayments gap” - to create the complete set of specifications required to implement globally
interoperable, legally enforceable B2B ePayment services.
Eleanor is designed by banks for banks and their customers. It allows banks to deliver the B2B
financial services that their business customers need for eCommerce - efficiently, profitably and
competitively. Eleanor provides a range of payment instruments to suit a wide variety of commercial
circumstances – from a simple cheque equivalent through to a letter of credit substitute. It is suitable
for domestic and international payments.
Eleanor is based on open eCommerce standards, such as XML, MIME and PKI and accommodates
diverse business trading environments, including eProcurement, Web Merchant Servers and
eMarketplaces.
Eleanor does not aim to replace existing inter-bank clearing systems or payment networks such as
ACH or RTGS – it provides a new channel for bank customers to initiate payments electronically.
The table below summarises the benefits that Eleanor participants might expect from deployment.
Eleanor Benefits for Corporate Users Eleanor Benefits for Financial Institutions
Operational efficiencies: Offer distinctive B2B ePayments products that:
• Automation of business processes and straight- • Meet customers’ eCommerce needs
through-processing • Are globally interoperable and enforceable
• Elimination of manual processes involved in • Strengthen customer relationships
payment reconciliation • Create new product opportunities
Pro-active risk management: Internet-enable cash management products:

• Conditional payments protect buyers • Restructure margins based on customer
• Payment certifications protect sellers automation / straight-through-processing
• Reduce back-office costs
Better management of working capital through: • Reduce financing costs through improved
• improved timing and knowledge of cash flows knowledge of customer transactions
• access to innovative e-financing tools
This paper addresses the questions:

• What is Eleanor?
• Why is Eleanor important?
It is intended to be read by decision makers, users and implementers of Eleanor, including:

• Financial institutions: cash management, trade & trade finance, e-commerce & e-banking,
product management/development, operations, information technology development.
• End-user business enterprises: treasury, accounting, import & export departments, strategic
planning, direct/internet sales, procurement, operations, information technology development.
• Internet commerce vendors: business development, product management/development.
• Online marketplaces: Business development, information technology development,
operations.
1
Eleanor™ is a service mark of Identrus LLC.
Does the World Need Another Payment Mechanism?
The following banks invested in the Eleanor development program, and are known as the Eleanor
founding banks: ABN AMRO, ANZ, BSCH, Bank of Tokyo-Mitsubishi, Barclays Bank, BNP
Paribas, CIBC, HSBC, HypoVereinsbank, Industrial Bank of Japan, National Australia Bank, Royal
Bank of Scotland, Sanwa Bank, Societe Generale and Wells Fargo. Between them they cover a
significant number of countries and markets, and have diverse product sets and vendor relationships.
The founding banks had a single purpose in mind when creating Project Eleanor: to provide their
business customers with the same type of transaction services in the eCommerce world as in
traditional business banking. Services envisioned could generally be categorised as “cash
management” or “transaction banking”, and include payments, collections, provision of working
capital, trade finance, payment underwriting and performance guarantees. The banks aimed to
provide these services with seamless integration to their customers’ eCommerce trading platforms,
including ERP, eProcurement, Web Merchant Servers and eMarketplaces.
The provision of traditional banking services in the eCommerce world at first appeared deceptively
simple. Many banks tried to offer such services independently via their own proprietary eCommerce
products – portals, web-Banking, eMarketplaces - but found two key barriers that drastically limited
their ability to offer even simple e-products:
• absence of an “industrial strength” internet trust standard suitable for payments
• lack of a widely accepted payments standard suitable for B2B eCommerce
The first barrier was overcome by the creation of Identrus LLC, a globally interoperable trust system
based on the most robust commercial cryptography available – PKI – whereby digital certificates
issued by banks to their business customers are designed to be relied on by third parties in
eCommerce trading. But even with Identrus, banks found that they could only offer the types of
ePayment services they envisioned if their customer’s customer also banked with them. Identrus
proved to be necessary but not sufficient to provide basic transaction banking services, even to a
bank’s existing customer base. Something more was needed.
Consider the simplest example of business transaction banking – the cheque. Cheques have their own
security features, including unique numbering, micro-printing, identification of the account holder and
so on. The basic authorisation tool is the signature. Cheques are useful for B2B payments because
they can have complex remittance data attached to facilitate reconciliation. A cheque can be endorsed
and transferred to a third party or (as is more common) deposited into a bank account for collection.
If the recipient (typically a seller) is concerned about the creditworthiness of the paying party, the
seller can request a bank or cashier’s cheque. Most importantly, a cheque can be used to settle a debt
between buyers and sellers regardless of their banking relationships, and without having to involve
their banks directly in the transaction. Of course, this only goes so far. Not every seller will accept
every buyer’s cheque. Other factors are involved. But in general, cheques are broadly acceptable or
“interoperable” between various parties. Not because of their technology - they’re just a piece of
paper with signatures - but because they are the subject of legally enforceable contracts between the
parties involved and are subject to legislation in most countries.
The Eleanor founding banks aimed to reproduce the simplicity, versatility and broad acceptance of the
traditional cheque in the eCommerce world, and add the concepts of conditional payments and
performance guarantees, to create an ePayments toolkit to suit all B2B trading scenarios – domestic
and cross-border, simple and complex, trusted and anonymous counterparties, and so on. Key to
achieving broad acceptance (or “interoperability” in technical parlance) is the recognition that new
technology like XML and digital signatures are important requirements of any modern payment
service, but do not in themselves provide a complete solution. Legal enforceability and operational
certainty are also required, so that all parties to a transaction know where they stand at all times.
What emerged was a vision which compelled the founding banks to look beyond immediate
competitive issues to a grander scenario: a globally interoperable payment initiation capability that
combined the best features of existing bank services, from the simple cheque to the letter of credit, but
was designed to fit naturally in the emerging world of eCommerce. A vision that would enable banks
to secure a pivotal role in the emerging world of eCommerce. Identrus was the logical trust platform
to use, but something more was needed. Project Eleanor was born.
What is Eleanor?
Eleanor is an initiative established by Identrus equity banks to “fill the B2B ePayments gap” - to
create the complete set of specifications required to allow banks to implement globally interoperable
B2B payment services for their business customers.
Eleanor specifications fall into three categories:
• Functional – a description of payment types and their attributes
• Technical – electronic message formats and protocols: field definitions and usage,
sequencing, error conditions
• Operational – service levels, rights, obligations and business practices required of Eleanor
participants
Functionality
Eleanor functionality reflects the diversity and market coverage of the founding banks, and is
designed to ensure that banks can meet their business customers’ ePayment needs, including:
• Integration with a variety of eCommerce systems, front and back end, including ERP,
eProcurement, web merchant servers, eMarketplaces
• Support for automation and straight through processing, from payment initiation through
reconciliation
• Built-in financing and risk mitigation tools
• Security, reliability, legal enforceability and broad acceptance, regardless of banking
relationships and geographic boundaries
Eleanor deals with payment initiation, as opposed to inter-bank messaging, clearing or settlement. It
does not aim to replace existing paper or electronic clearing systems such as ACH, Fedwire, EBA,
RTGS or their equivalents within and between other countries. The focus of Eleanor is on how
business trading partners deal with each other, the types of risks and financing issues they face, and
how banks can support them seamlessly and cost-effectively. Eleanor provides a new channel to
initiate payments on existing back-office payment systems.
Settlement via existing
inter-bank systems
NACHA, NYCH, BACS,
EBA,VisaNet, SWIFT, RTGS
Buyer’s Bank Seller’s Bank
Payments
Guarantees Eleanor specifications Collections
Conditions deal with payment initiation Receivables Finance
Working Capital
Orders, terms
$
$
Buyer Remittance Seller
Figure 1: Eleanor provides payment initiation with financing and risk tools
The basic Eleanor payment instruments are outlined in the table below. They cover a range of B2B
trading requirements, from the simple “clean” payment through to a letter of credit substitute.
Payment Type Description Analogy Revocable2 Transferable3

Giro payment,
Instruction from Buyer to Telegraphic Transfer,
Payment Order Yes No
Buyer’s Bank to pay away Wire Transfer, ACH
credit
Draft, Promissory
Undertaking by the buyer to
Payment Note,
reimburse the holder on the No Yes
Obligation Bill of Exchange,
nominated date
Trade Acceptance
Undertaking to reimburse Bank-accepted Bill,
Certified Payment which is underwritten by the Endorsed Promissory
No Yes
Obligation buyer’s bank, ie the bank will Note,
settle on the nominated date Payment Guarantee
Conditional Undertaking to reimburse Escrow Payment,
Payment subject to provisions agreed Documentary No Yes*
Obligation at the time of creation Collection
The Payment Order is the most simple. It allows a business customer to credit a supplier, locally or
internationally, through a direct instruction to its bank via a website or electronic banking service.
The Payment Obligation allows the buyer to directly discharge a debt with the seller, as in our
example above with the cheque. Remittance data can be captured by the buyer and the seller at the
time of payment initiation to automate and reduce the cost of reconciliation. The seller becomes the
holder of an irrevocable transferable instrument - a simple but powerful feature that opens the door for
2
An instrument is revocable if it can be cancelled after issuance without the beneficiary’s consent.
3
An instrument is transferable if its ownership, including rights, obligations and interests, can change.
*
After conditions are successfully discharged, a Conditional Payment Obligation can be treated as a Payment
Obligation and becomes transferable.
many benefits for the seller and the seller’s bank. A Payment Obligation can have a future value date,
accommodating the case where a debt must be settled today using real-time eCommerce tools, but
value transfer is to take place according to trade terms in, say, 30 days.
A Payment Obligation, like a cheque, carries with it the credit risk of the paying party. It is like a
promise to pay, but can be dishonoured if, for example, a buyer enters liquidation prior to the value
transfer date. Sellers often don’t want to accept such risks, and the Certified Payment Obligation
allows the buyer’s bank to underwrite value transfer. Of course the buyer’s bank would probably
charge a fee based on magnitude and duration of the underlying obligation, and the seller becomes the
holder of an irrevocable transferable bank-backed instrument.
Buyers also face risks relating to, for example, order fulfilment. Conditional Payment Obligations
allow a buyer to enter a transaction with the confidence that payment will only occur if agreements
regarding, for example, quality, quantity or timeliness of delivery are met. Likewise the seller can
confidently proceed to fill an order knowing that value transfer will occur in due course. Any number
of conditions can be placed on a Payment Obligation. The buyer’s bank acts as the repository for
conditions and an independent “Condition Discharge Party” can be used to monitor performance and
notify completion, eg Customs agents, logistics companies or quality inspection firms.
Eleanor supports other combinations of payment types, too. For example, there is a Certified
Conditional Payment Obligation which combines the features of payment conditions which protect
the buyer and a bank certification which protects the seller into one instrument which can be used as a
substitute for a letter of credit.
The diagram below outlines the flows of an Eleanor Conditional Payment Obligation.
Condition
6. Buyer’s Bank notifies CDP
of condition requirement Discharge
Party (CDP)
7. CDP confirms condition compliance
4. Seller’s Bank validates Seller information,

adds settlement instructions & forwards
5. Buyer’s Bank validates Buyer information

including authority of employee to pay and
Buyer’s Bank acknowledges instructions Seller’s Bank
8. Buyer’s Bank pays Seller via Seller’s Bank
5a. Buyer’s Bank 5b. Seller’s Bank
acknowledges relays
instructions acknowledgement
8b. Seller’s Bank
3. Seller adds bank A/C info &
8a. Buyer’s Bank credits Seller’s
forwards to Seller’s Bank
debits Buyer A/c A/C
$
$
1. Agree on terms of Purchase & Sale, and

negotiate payment conditions
2. Buyer sends a Conditional Payment Obligation
Buyer Seller
Figure 2: Eleanor Conditional Payment Obligation (simplified)
Technical Overview
A basic assumption of Eleanor design is that the internet is the natural home for B2B commerce and
will be used by trading partners wherever possible to reduce costs and increase connectivity. Much
effort has been expended in deriving a technical architecture for Eleanor that reduces costs at
implementation and throughout deployment, while retaining flexibility, choice and differentiation.
Important principles of Eleanor from a technical perspective include:

• Use of proven, best of breed eCommerce standards such as XML and SMIME
• Vendor neutrality
• the 3 Layered Model
• Adoption of a distributed architecture
These are explained in more detail below.
Proven Open Standards

Eleanor uses and builds on a variety of common standards and recommendations from organisations
such as IETF and W3C, the most important being:
• S/MIME and HTTP over SSL for secure XML document exchange
• PKCS7 and XMLDSig for digital signature processing
XML is important for several reasons:

• Achieving straight-through-processing via application to application messaging.
• Leveraging vendor support to minimise implementation, operating and upgrade costs for new
applications and interfaces to legacy systems.
• Alignment with other relevant eCommerce developments and programs.
The Identrus trust service, for its part, also uses and builds on a variety of common standards:
• X509v3
• PKIX (rfc 2459)
• OCSP (rfc 2560)
• S/MIME
Identrus has also defined its own standards which are used within Eleanor:
• Transaction Co-ordinator: which is built from XML and XMLSIG
• Signing Interface: which is built from PKCS7, HTML, Netscape plug-in technology and Java
Vendor Neutrality
Key to broad adoption is the ability for banks and their customers to obtain “Eleanor compliant”
applications and plug-ins from their existing vendors and/or to seek the most competitively priced
implementation to suit specific circumstances.
Eleanor is therefore designed to accommodate multiple vendors in the first instance and in its
evolution via a change control program. A compliance testing program is being established whereby
vendors will be able to validate their product offerings against an interoperability standard.
The 3 Layered Model
Eleanor is designed to allow banks to offer their own branded eCommerce products and services
competitively without compromising business or technical interoperability. To achieve this, given the
prospect of competitive pressures, Eleanor adheres to the 3 layered model as illustrated below.
Layer Competitive
B2B eCommerce World
Description Dynamic
Each bank develops its Competitive
Proprietary Services own products & services,
(provided by with own branding, pricing
Member Banks) and packaging,
Layer 3
based on interoperable layer 2.
Rules
Payment initiation standards and rules.
Functions Co-operative
Eleanor = technical & functional specs,
Layer 2 Standards + operating rules for payment initiation
Identrus
Trust and Authentication services Co-operative
PKI
Layer 1 Identrus = globally interoperable trust system
building on PKI technology and standards
Figure 3: Eleanor uses the 3 layered model, ensuring interoperability with competition
The 3 layered model allows competition between banks at the product and customer level (layer 3),
but supports interoperability and co-operation at the payments and trust levels (layers 2 and 1
respectively). Each layer leverages the capabilities of the one beneath, retaining independence so that
“plug and play” is possible. Eleanor relies heavily on the underlying trust service for identification,
authentication and non-repudiation, which are essential for payment initiation. It is indeed possible to
use Eleanor specifications with a PKI system other than Identrus, although at the expense of legal
enforceability and global interoperability. More importantly, it is also possible to use Identrus
certificates with interoperable eCommerce applications other than Eleanor.
Distributed Architecture
Eleanor is designed to allow banks to choose their own implementation path, leveraging existing
systems, capabilities and vendor relationships. Eleanor therefore uses a distributed architecture,
whereby each bank undertakes its own Eleanor implementation but remains interoperable with other
Eleanor implementations. Banks can choose whether to build their own Eleanor infrastructure or use
a hosted or outsourced service from a third party, depending on their circumstances. Insourcing
would be preferable for banks that can achieve economies of scale in their own right or that want to
ensure differentiation; outsourcing might be preferable during early stages of deployment, prior to
large scale roll-out.
A distributed architecture enhances systemic robustness and scalability. Each participant’s

implementation operates independently of others, so performance degradation or outage in one does
not adversely affect another.
Eleanor Operating Rules
The Operating Rules are the means of achieving legal enforceability and business interoperability, as
opposed to technical interoperability. The Operating Rules provide specifications and agreements for
system availability, value date processing, response times, validations, error handling, liability,
recourse and dispute resolution.
The Operating Rules assume a hierarchical structure of Eleanor participants, whereby:

• A bank executes a membership agreement with a system administrator.
• A business customer executes an agreement with its bank, by which it agrees to various terms
and conditions, some of which are prescribed by the Operating Rules and others are specific
to its bank.
Identrus has established a subsidiary called Identrus Payments and Trade LLC which will act as the
system administrator for the global implementation of Eleanor. Collectively, Identrus Payments and
Trade LLC, member banks and their subscribing customers constitute a contractually closed system
referred to as The Eleanor System.
IPT administers the Eleanor System:

Identrus • Membership program
Payments • IP Management: specs & rules
& Trade • Vendor/partner programs
Member Member
Agreement Agreement
Banks join the Eleanor System:

• via member agreement
• adhere to specs & rules
Buyer’s Bank • “sponsor” their business customers Seller’s Bank
Customer Customer
Agreement Agreement
Buyers and Sellers:
$
• participate via their bank

$
• adhere to customer terms & conditions

Buyer • trade with each other as usual Seller
• pay and finance via Eleanor services
Figure 4: The Eleanor System – interoperable and enforceable
Eleanor Delivers Value to Businesses and Financial Institutions
Eleanor is designed to allow banks to deliver the B2B financial services that their business customers
need for eCommerce - efficiently, profitably and competitively.
Scope and Size of Opportunity

Research undertaken by a respected 3rd party4 has identified the range and scale of payment
processing inefficiencies in a single global B2B industry segment, and by implication the scale of
potential Eleanor benefits. The diagram below identifies a range of payment-related activities
undertaken by buyers and sellers in that industry, and the interaction points both within and between
corporate entities.
4
Bain & Company Inc, Boston, MA, USA, www.bain.com
Eleanor_White Paper.doc V1.01 - 10 - © Identrus LLC, 2002. All rights reserved.
Source: Bain & Company Inc, Boston, MA, USA Data Financial
analysis services
= Payment processing activity
= Other related activity Supplier/buyer management
Materials
Identify Create Final
Negotiation release/
needs and negotiation
Buyer supplier
& submit And
and
P.O./ Receipt
verification
Accounts
Payment
RFQ agreement delivery Payable
candidates agreement
schedules
Supplier Supplier Collaborative Completed

catalogs certification product design order
Receive Prepare Prepare Advanced

Seller Market to and and Order AR & Payment
buyers clarify respond
and shipping
Invoicing receipt
receipt notice
RFQ to RFQ respond
Figure 5: Multiple points of information exchange lead to inefficiencies relating to

payment processing
The activities are typical and representative of a wide range of B2B vertical industry segments. The
next diagram illustrates the estimated aggregate value that could be released annually to industry
participants by migrating industry-wide to electronic payment and finance services.
$300M
$300M FX services Estimate of annualised value
trapped by inefficient B2B
Transaction
payment processes in one
insurance vertical industry segment.
200 Credit
Source: Bain & Company Inc,
Boston, MA, USA.
$160M (buyer financing)
Reduced errors
& reconciliation
costs
100
Collateralised
Elimination Lending
of manual (seller financing)
processing
0 Automation Savings Financial Services
Figure 6: Value is trapped by today’s inefficient B2B payment processes
Overall, inefficiencies in current processes and practices relating to B2B payments have “trapped”
nearly half a billion dollars of value annually in just one vertical industry segment.
Eleanor allows banks to help their customers realise this value, driving cost out of their own systems
and creating opportunities for growth and new revenues in the process.

Automation Benefits
A significant proportion of realisable benefits – about one third in all - derive from automation.
Achieving the goal of straight-through-processing for both corporates and banks was a major
objective in the design of Eleanor, and there are many features that facilitate benefits in this area.
Eleanor ensures that buyer’s and seller’s eCommerce systems can deal directly with each other
throughout the payment initiation process, allowing both parties to automatically capture or exchange
whatever data is required to facilitate automated end-to-end tracking, support and, most importantly,
reconciliation.
The basic Payment Obligation workflow provides the simplest example:

• the buyer digitally signs a payment instruction and sends it to the seller
• the seller adds its own information, including bank account data, and sends it to its bank
• the seller’s bank validates the seller’s data, adds settlement details and sends it to the buyer’s
bank
• the buyer’s bank validates the buyer’s data, including the employee’s authority to make the
payment, responds to the seller’s bank, and executes the payment in due course
Each party can capture and record whatever data it requires at each step.
IPT administers the Eleanor System:

Identrus • Membership program
Payments • IP Management: specs & rules
& Trade • Vendor/partner programs
Member Member
Agreement Agreement
Banks join the Eleanor System:

• via member agreement
• adhere to specs & rules
Buyer’s Bank • “sponsor” their business customers Seller’s Bank
Customer Customer
Agreement Agreement
Buyers and Sellers:
$
• participate via their bank

$
• adhere to customer terms & conditions

Buyer • trade with each other as usual Seller
• pay and finance via Eleanor services
Figure 7: Basic flow of the Eleanor Payment Obligation
This sequence is known variously as “counter-clockwise” or “pull” payment processing, or simply

“collections”. Cheques also follow a “counter-clockwise” workflow, and a major advantage is that
information required for tracking and reconciliation does not have to be carried through the banking
system. Eleanor also supports the opposite flow, known as “clockwise” or “push” payment
processing, but the largest benefits are expected to derive from counter-clockwise bank product
deployments as these more closely match traditional B2B paper-payment flows and provide greater
opportunity for automating reconciliation.

Using Eleanor, the order, delivery and payment process can be fully integrated:
• payments can be initiated seamlessly during the negotiation and ordering process instead of
being a separate activity;
• complete payment information – what is being ordered, paid for, when and how – is linked
into the electronic payment function itself;
• bank information and processes required to execute the payment are transparent to the trading
partners, either because they are added into the payment itself or because they are stored as
standing instructions within banks’ internal systems
Eleanor can be the vehicle for eliminating manual reconciliation activities, both payables and
receivables, and could even be used to eliminate invoices altogether. Eleanor also supports straight-
through-processing for the participating banks by, for example, allowing banks to add settlement
information to transactions during the initiation process. This has the dual advantage of driving cost
from banking processes and ensuring that there are no delays in crediting the seller on the value
transfer date.
Automation using Eleanor also improves timeliness. Current cross-border trading, for example, often
results in a seller relying on the buyer to “go offline” to its bank to arrange a letter of credit in the
seller’s favour. Even with today’s fastest proprietary eBanking solutions, the seller will typically wait
days for confirmation. Using Eleanor, a Conditional Certified Payment Obligation can be with the
seller in near to real time - a considerable advance and advantage.
Financial Services Benefits

The more interesting benefits in the example are those in the financial services category, which
amount to two thirds of annual realisable benefits to industry participants. Here Eleanor differentiates
itself from other options that might also achieve benefits of payment automation.
Example – An Eleanor Certified Payment Obligation in Action

Consider the diagram below. The seller has sent the buyer an invoice (electronically, of course) for
$1M for goods previously provided, payable in 7 days. To encourage the buyer to pay early, the seller
offers an “early payment” option – a 0.5% discount on face value ($5000) for payment today. The
buyer’s accounting department does its sums – a 0.5% discount provides a strong incentive (~25%
annualized), but cash is not at hand and the seller will only accept a bank-backed payment instead.
Fortunately the buyer’s credit standing with its own bank is good, and a Certified Payment Obligation
can be obtained for a 0.25% fee ($2500) based on prevailing interest rates, the 7 day term and the
buyer’s bank’s knowledge of the buyer’s cash flows, including future dated Eleanor payments in the
buyer’s favor. The buyer’s clerk goes to the seller’s website and creates a Certified Payment
Obligation for $995,000 in favor of the seller. Eleanor plug-ins allow remittance data to be directly
captured in the buyer’s payables system and the seller’s receivables system, meaning that subsequent
reconciliation is eliminated almost entirely. The seller then avails of a “value today” function
provided by its bank, whereby ownership of the Certified Payment Obligation is electronically
transferred from the seller to its bank in exchange for cash at a 0.20% discount to face value based on
the credit rating of the buyer’s bank. In effect, the seller has obtained cheap receivables financing
from its own bank, underwritten by the credit rating of the buyer’s bank.

1. Seller sends invoice to Buyer.
Identrus 2. Buyer sends future-dated Certified Payment
Payments Obligation to seller
& Trade 3. Seller forwards to its bank (adding bank account)
4. Seller’s bank forwards to buyer’s bank (adding
settlement data)
5. Seller transfers ownership for “value today”
6. Seller’s Bank credits Seller with face value
minus discount.
4. transmission
7. Buyer’s bank settles on value date.
Buyer’s Seller’s
7. $995,000
Bank Bank
on value date Note that various steps have been omitted, eg
3. 5.request Buyer’s Bank approving the certification.
value
today
6. credit $993,010
(face value - discount)
1. Invoice $1M
2. Certified Pob
Buyer $995,000 Seller
Figure 8: Example – an Eleanor Certified Payment Obligation (simplified)
All parties have benefited from the process outlined above: the buyer obtained a net discount of
$2500 ($5000 minus its bank’s fee of $2500); the seller obtained $993,010 cash today ($995,000 face
value minus the seller’s bank’s fee of $1,990); the buyer’s and seller’s banks obtained fees for their
services and financing. Note that the example works whether the buyer and seller are in the same
country or different countries – Eleanor is designed to be global.
Some variations on the above example:

• The seller might have wanted a bank-backed payment even without the “value today” option,
purely to mitigate credit risk. In that case, the seller might merely hold the Certified Payment
Obligation to maturity and obtain cash after 7 days.
• The buyer might have a triple-A short term debt rating, in which case the seller might accept
its Payment Obligation without a bank certification and still be able to obtain value today via
its bank.
• The buyer had already received the goods from the seller, so conditions were not relevant for
this payment. But suppose the invoice was an advanced shipping notice instead. The buyer
might then have wanted to place conditions on the payment like “only if the goods arrive in
my city warehouse before Christmas (as evidenced by XYZ courier company) and they
comply with ISO1234 (as verified by ABC Quality Inspectors Inc)”. A Conditional Certified
Payment Obligation could then be used.
• The original trade might have been in USD but the seller really wants GBP. The seller’s bank
could provide an FX service as an adjunct to the electronic transfer of ownership process,
similar to the “value today” function.
Returning to the estimated benefits depicted in figure 6, and starting from the bottom:
• Eleanor facilitates seller financing through the transferability of Payment Obligations. Banks
can offer their customers a “discount facility” whereby future dated Obligations can be
transferred at a discount to face value.
• Buyer credit can be achieved in a variety ways using Eleanor, the most obvious being a line
of credit for Payment Obligations. Banks can provide buyer credit services at lower cost by

tracking transactions online and maintaining a database of transaction history.
• Transaction insurance, to protect sellers against payment failure, can be achieved using
Eleanor Certifications. Likewise, Eleanor’s Conditions provide insurance from the buyer’s
perspective.
• Eleanor supports multiple currencies and cross-border transaction processing and its design
and workflows provide ample opportunity for banks to provide FX services.
Transferable Obligations
The worked example above illustrates that transferability of Eleanor Payment Obligations can lead to
a range of financial benefits for corporate users and their banks. However, the value of transferability
need not stop there. Eleanor creates a situation in which the seller’s bank can on-sell Payment
Obligations to other bank participants of the Eleanor system, effectively creating a secondary market
for trade-based financial instruments. Eleanor’s design and rules support this concept, and, given
sufficient depth in the market over time, the trading of Eleanor Payment Obligations could become a
profitable activity in its own right, allowing Eleanor banks to securitise their receivables and manage
portfolios of trade-based instruments.
Profitability of Eleanor Services

Eleanor provides the means to realize value trapped in today’s B2B payment processes. Banks can
use Eleanor to internet-enable their current business transaction services, assisting their customers’
migration to eCommerce and improving profit margins in the process.
Example. Let’s say a bank offers business cheques today for $0.50 and makes a profit of $0.04 on
each cheque. In conducting market research and working through its business case for Eleanor
participation, the bank might conclude that it can offer electronic Payment Obligations at an internal
cost of $0.30 at projected adoption rates. It could then price its Eleanor Payment Obligations at $0.35,
increasing today’s profit margin to $0.05 but still providing a $0.15 incentive per cheque for its
customers to migrate to electronic payments. Although bank revenues are lower overall, margins
have increased and profitability is enhanced. Furthermore, the bank’s customer has a cheaper product
that facilitates other benefits. Suppose that one of the bank’s customers incurs average costs of $2 per
cheque for payables reconciliation activities, but the customer determines through internal assessment
that by using Eleanor Payment Obligations the average item reconciliation cost will be reduced to $1.
The customer therefore stands to directly benefit by a total of $0.15+$1.00 per transaction through
adopting Eleanor payments, and will also have access to other Eleanor features such as conditions and
certifications.
Eleanor can reduce the cost of providing credit in the eCommerce world depending on the extent and
sophistication of a bank’s implementation. Consider the case of a bank that offers its business
customer a line of credit or overdraft facility for its cheques. Due to the uncertainty of cash flows and
difficulty in predicting the use of cheques, bank overdraft limits are often set higher than they could
be and are rarely used in full. A risk-weighted capital allocation associated with an overdraft limit
could therefore be reduced if future cash flows were better known. Eleanor provides an opportunity
for a bank to obtain more complete and accurate information about future financial events by tracking
Payment Obligations as they arise, as opposed to finding out about a cheque when it comes through
the clearing system, which in turn can translate to more accurate capital allocations or lower overdraft
limits. As with the cheque migration example, a bank could structure its fees so that customers have
an incentive to adopt the new electronic service while also enhancing bank profitability.
Referring to the 3-layered-model, banks can offer Eleanor services branded as they see fit and
according to their own price list. Typical Eleanor services and fees that banks might offer include:
• establishment: to register a business as an Eleanor subscriber, install and activate software,
train end-users, and so on

• subscription fees: annual Eleanor support fees to cover customer support, service upgrades,
and so on
• payment processing: initiation fee for buyer’s bank, collection fee for seller’s bank
• certification: transaction fees and credit/interest charges
• condition processing: establishment and discharge fees
• obligation transfer: transaction fees and credit/interest charges
Key benefits for banks would derive from:

• replacing paper payment products and reducing operating costs through automation
• protecting or enhancing existing relationships and revenue streams
• extending credit services seamlessly and cost-effectively into the B2B eCommerce world
Bank customers benefit from:

• reduced operational costs through automation and straight-through-processing
• access to new risk management and financing tools that fit seamlessly into their eCommerce
programs
• more financing options and better knowledge of cash flows that can result in lower working
capital costs
The Eleanor System

The most important Eleanor benefits – global interoperability and legal enforceability - are best
achieved through participation in The Eleanor System.
Consider again the example above where the seller accepted a $1M Certified Payment Obligation
from the buyer. Technical interoperability between the buyer’s and seller’s eCommerce systems is
important for achieving benefits of automation and financing, but the transaction itself is only
commercially viable if the seller has the unequivocal and enforceable assurance that the buyer’s bank
will honour the transaction in due course. Likewise, the seller’s bank would only treat the Certified
Payment Obligation as transferable with the credit rating of the buyer’s bank if underwritten by
legally enforceable agreements. These assurances can be achieved through participation in The
Eleanor System which binds all parties, directly or indirectly, to one set of Operating Rules.
At the macro-level, one might ask in relation to the quantitative analysis in diagram 6 “Why doesn’t
one bank introduce a killer ePayments application and grab all the transaction banking business
itself?” The answer goes right back to the introduction. A bank can only achieve this outcome if it
has 100% market share of the transaction banking relationships in the given industry segment.
Otherwise it faces the challenge of trying to provide payment and financial services to its customer’s
customers. Given that the members of any industry segment are likely to have various and
unpredictable transaction banking relationships, and that these relationships tend to be “sticky” (costly
to change), the benefits can best be unlocked by leveraging existing bank relationships into a scenario
where business interoperability is assured, regardless of banking relationships. Hence the creation of
The Eleanor System.

Contacts
For more information:

• Financial institutions should contact their Identrus sales representative or John Bullard, Managing
Director Identrus Participant Relations, MWB Business Exchange, 78 Cannon Street, London
EC46NQ, +44-207-618-8406, john.bullard@identrus.com
• Corporations should contact their transaction banking relationship manager and ask about Eleanor
participation.
• Vendors should contact Peter Blakey, Eleanor Product Manager, MWB Business Exchange, 78
Cannon Street, London EC46NQ, +44-247-661-2240, peter.blakey@identrus.com

Appendix A – Summary Eleanor Benefits
Eleanor Benefits for Corporate Users Eleanor Benefits for Financial Institutions
Operational efficiencies: Offer distinctive B2B ePayments products that:
• Automation of business processes and straight- • Meet customers’ eCommerce needs
through-processing • Are globally interoperable and enforceable
• Elimination of manual processes involved in • Strengthen customer relationships
payment reconciliation • Create new product opportunities
Pro-active risk management Internet-enable cash management products:
• Conditional payments protect buyers • Restructure margins based on customer
• Payment certifications protect sellers automation / straight-through-processing
Better management of working capital through: • Reduce back-office costs
• Improved timing and knowledge of cash flows • Reduce financing costs through improved
• Access to innovative e-financing tools knowledge of customer transactions
Appendix B – Eleanor Distinguishing Features
Feature Description
Broad functionality Simple and conditional payments, certifications, transferable
obligations – designed to suit diverse B2B circumstances.
Global Suitable for domestic and cross-border transactions.
Transferable obligations Creates corporate and bank financing opportunities.
Counter-clockwise flow Direct communication between buyer and seller match

traditional flows, eg cheque payments, and facilitate
automation and financing opportunities.
Distributed Architecture Allows differentiation with flexibility and control. Promotes

systemic robustness and scalability.
A system Hierarchical structure that ensures legal enforceability,

technical and business interoperability through Specifications
and Operating Rules.
System participation leverages bank-customer relationships,
preserving and extending the role that banks play in B2B
commerce today.
“Eleanor was designed by banks for banks and their customers.”

Eleanor White Paper

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P R O J E C T E LEANOR

* THE PROVIDERS OF THE WORLD’S FIRST GLOBAL TRUST SYSTEM

DOES THE WORLD NEED ANOTHER PAYMENT MECHANISM?.........................................4

ELEANOR DELIVERS VALUE TO BUSINESSES AND FINANCIAL INSTITUTIONS........10

APPENDIX A – SUMMARY ELEANOR BENEFITS....................................................................18

APPENDIX B – ELEANOR DISTINGUISHING FEATURES .....................................................18

Pro-active risk management: Internet-enable cash management products:

This paper addresses the questions:

It is intended to be read by decision makers, users and implementers of Eleanor, including:

Eleanor specifications fall into three categories:

• Functional – a description of payment types and their attributes

Buyer’s Bank Seller’s Bank

Buyer Remittance Seller

Payment Type Description Analogy Revocable2 Transferable3

4. Seller’s Bank validates Seller information,

5. Buyer’s Bank validates Buyer information

1. Agree on terms of Purchase & Sale, and

Figure 2: Eleanor Conditional Payment Obligation (simplified)

Important principles of Eleanor from a technical perspective include:

Proven Open Standards

XML is important for several reasons:

A distributed architecture enhances systemic robustness and scalability. Each participant’s

The Operating Rules assume a hierarchical structure of Eleanor participants, whereby:

IPT administers the Eleanor System:

Banks join the Eleanor System:

• participate via their bank

• adhere to customer terms & conditions

Figure 4: The Eleanor System – interoperable and enforceable

Eleanor Delivers Value to Businesses and Financial Institutions

Scope and Size of Opportunity

= Other related activity Supplier/buyer management

Supplier Supplier Collaborative Completed

Receive Prepare Prepare Advanced

Figure 5: Multiple points of information exchange lead to inefficiencies relating to

0 Automation Savings Financial Services

Figure 6: Value is trapped by today’s inefficient B2B payment processes