Abstract: A system and method for concurrent electronic remittance and funds transfer that allows for the simultaneous electronic transfer of funds to a service provider for payment of a liability and transmission of a standardized electronic remittance transmittal which includes details concerning the payment. When implemented in medical billing environments, the system and method is operative to transmit an electronic notice of payment for a specified amount to a service provider payee upon receipt of an electronic claim payment file from a health insurer payer. Once electronic payment is accepted by the payee, an Original Credit Transaction that immediately credits the payment into an existing bank account of the payee. At the same time, an 835 Electronic Remittance Advice which includes details about the payment is electronically transmitted to the payee, enabling the payment transaction to be automatically documented in the payee's practice management system that receives the 835.