Global payment technologies open up opportunities for treasurers
A panel discussion at AFP 2019 discussed how changes in the global payments environment is greatly changing how treasurers need to view the payments landscape.
A panel discussion at AFP 2019 discussed how changes in the global payments environment is greatly changing how treasurers need to view the payments landscape.
Global payment integration and best practice was addressed in detail during a panel discussion on the opening day of AFP 2019 in Boston.
Focusing on how payment options, innovations and regulatory changes are impacting global payment integration, Colleen Anderson Ramsay, senior treasury manager at Amazon; Steven Bernstein, US and global ACH business development manager at J.P. Morgan Chase, and Rene Pelegero, Group CEO for Retail Payments Global Consulting, shared the floor for what proved to be a lively session.
The panel discussed how technology is becoming increasingly important to the treasury function, with Anderson Ramsay suggesting that financial services, including treasury, is at its watershed moment. She said that it was clear that we’re on the tipping point of auto reconciliation and that financial services is now regularly handling intricate banking frameworks.
She went on to suggest that thanks to the technological advancements made in recent times, banks are doing a lot more with cutting edge technology, such as artificial intelligence (AI), machine learning (ML) and robotics process automation (RPA) – with more possible.
“Different payment mechanisms must be examined in order to remain ahead of new financial players,” she said. “We have seen a shift in the cash management world from plugging, slugging and doing to automating. Treasury is always talking about real-time, while accounting is lagging behind, proving that there is a need for sophisticated treasury technology.”
Debate moved on to inevitably cover Libra and Blockchain, although Bernstein cautioned that we musn’t get ahead of ourselves, detailing why card payments must be considered when talking about the full range of payment types. “The optimal way of thinking about integration is whether to offer cards based on AI, risk of party and the cost of payment,” he said. “There must be one underlying philosophy.”
Anderson Ramsay responded by saying: “It’s about understanding what your customer wants and building out processes that your customer wants to engage with. If card payments are not available online, you will lose the up and coming customer – that are at college age – and are starting to test forms of e-payments.”
Moving on, the debate then covered some of the other hot topics of the conference, including data mining.
Anderson Ramsay suggested that extracting data from card transactions is necessary if organizations are to truly understand the optimal point where the legal entity must be placed in order to push the payment through. This, in turn, she says, benefits both the customer and the bank. This can, the panel decided, be helped by real-time data and real-time payments – and has multiple benefits. This can include reducing fraud and decreasing cash balances held, as well as cutting costs.
“Treasury is not just about managing cash,” Anderson Ramsay told delegates. “It’s about becoming part of the conversation on cards, understanding the cost of them and whether it may be cheaper to process e-products than cards.”
“Twenty years ago, if a company didn’t know treasury existed, that mean you were doing a great job,” Anderson Ramsay joked, saying that today treasurers have a real opportunities to be experts in these emerging technologies. “I want my accountants to be experts in new accounting standards, not real-time payments.”
When asked when treasurers will start to see the impact of emerging payment technology, both Anderson Ramsay and Pelegero said that international business has already been impacted.
Pelegero said: “Amazon and Netflix are able to change consumer behaviour and in turn, payment behaviour. Then there’s Japan, for example. They have been doing real-time payments for decades, but they still use cash a lot, using cards to withdraw cash and go to a convenience store to pay bills. There are mechanisms: they are not better or worse, just different, and treasury needs to be aware of this.”
Overall, it was clear that the pace of change within international payments is accelerating – and becoming more complex by the day – this does, the panel agreed, provide plenty of opportunities for treasurers.
Look out for more interviews and analysis from AFP 2019 over the coming days and weeks.