At a payments panel group session held at the conference, Pedro Madeira, assistant treasurer at Heathrow Airport, said that while his firm was comfortable with its legacy payment systems, such as Bacs and the Clearing House Automated Payment System (CHAPS), it is looking to SWIFT in helping it become more bank agnostic.
“It would also give us the power to negotiate better during request for proposal (RFP) selection processes and enable us to change bank more easily,” added Madeira.
Stewart Rodd, deputy treasurer, operations, at Omnicom Finance is another who wants to be bank agnostic. “We are also looking at new payment technology to help us with liquidity management as well, because we need to get cash to the centre more quickly,” he said. “We operate an in-house bank (IHB) and a fairly centralised treasury, so payments are important to us.
“Nirvana would be a porting authorisation code [PAC] code so that you could port your bank details,” added Rodd, as you can with your mobile number. A PAC for bank accounts would certainly help treasurers, but realistically ‘Nirvana’ is still some way off.
What is presently available in certain countries, such as Singapore and the UK with its Faster Payment Service (FPS), are immediate payment infrastructures. These can potentially offer quicker payment turnaround times, support payment innovation and assist treasury efficiency.
In the UK, for instance, the FPS has led to the pay-m shared mobile payments platform that 12 banks have to date signed up to, offering consumer and corporate users ‘on the move’ payment options. Barclays pre-empted pay-m by a couple of years and launched its own pingit mobile payment application, while other banks waited to move en masse, but has also now diversified into a buyit app. It offers a number of new business-to-business (B2B) and other new corporate targeted payment options as it seeks to stay ahead of its competitors.
“I’ve spoken to Barclays about taking pingit payments but it didn’t actually happen in the end, as it wasn’t the right time for us,” said Omnicom’s Rodd. “I’m glad we had the discussion, however, because it is part of a modern treasurer’s value-adding duty to bring forward new ideas and strategic options to the business.”
A single virtual bank account for thousands of operational units, PAC-like codes, more interoperability and electronic bank account management (eBAM) are all attractive to James Kelly, head of treasury at business services group Rentokil Initial. However he recognises also them as unlikely to ever happen anytime soon, so refers to concentrate on getting more data-rich payments for now.
“I want to be able to check who is on the other end of a payment, obtain standardised reference data and so on,” said Kelly.
Rentokil Initial has 27,000 employees worldwide and operates in 65 countries. The multinational corporation (MNC) operates a less centralised treasury than Omnicom Finance, so Kelly has to spend some of his time getting people to report to him.
“Primarily we’re a B2B firm, so that is our payment focus,” he said, before alluding to the recent single euro payments area (SEPA) direct debit (SDD) mandate management challenge when he said he was: “keen to see a way of dealing with DD migrations that doesn’t cause a drop-off rate.”
The interaction between organisational change and technology would be the key to achieving such an aim, as tech alone cannot solve all problems. Technology can help, but it must be assessed, implemented correctly and aligned with existing or overhauled treasury processes in order to deliver true benefits.
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