Cash & Liquidity ManagementPaymentsThe 10 biggest corporate payments trends affecting treasurers in 2020

The 10 biggest corporate payments trends affecting treasurers in 2020

Roger Comins, Director, Product Management, GTreasury discusses trends in corporate payments that will affect corporate treasurers in 2020.

The corporate payments landscape has reached a transformative moment – one full of change, new challenges, and unmistakable opportunities for those corporate treasurers prepared to capitalize on several important industry trends. As the new decade begins, established payments processes are straining under increasing payment volumes and fast-paced organizational expansions. As a result, businesses are more incentivized than ever to pursue investments in reducing payment friction, introducing real-time payments, and implementing error-proof, straight-through processes.

Here are ten trends that should guide how corporate treasurers navigate their organizations through 2020 and beyond:

The 10 Biggest Corporate Payments Trends Affecting Treasurers in 2020

1) Frictionless payment solutions are becoming crucial in the face of global and organizational business growth.

The rate at which corporations are expanding to become international organizations is accelerating. This is simultaneously increasing the pressure on payment systems to offer efficient and seamless operations while interfacing with a tremendous breadth of global portals, formats, accounts, and clearing systems. A rather comprehensive study by Strategic Treasurer surveying corporate treasurers discovered that 37 percent of corporations now operate across at least 11 countries, 34 percent utilize six or more banks, and 39 percent generate payments in six or more currencies. At the same time, corporations frequently expand by acquiring firms with their own unfamiliar IT systems. But integrating these infrastructures with existing payment systems often means addressing challenging technical conflicts, and managing payment data stores distributed across disperse IT systems straddling multiple international locations.

Given these growing pains, corporations will increasingly adopt modern payment solutions designed to alleviate cross-border, cross-system, and other frictions.

2) The payment volume managed by corporate treasurers is set to surpass all previous records.

According to the same Strategic Treasurer survey, 45 percent of corporations are now generating at least 10,000 global payments every month. The survey also finds that more than half of corporate treasurers are responsible for managing 100 or more corporate bank accounts. With payment volumes hitting new levels, corporate treasurers managing complex payment systems naturally face increased occurrences of formatting errors and other tricky issues that cause payment delays (and, of course, the associated increases in fees and expenses). As a response, organizations are now more eager than ever to introduce straight-through processes and other error-reducing payment solutions.

3) Real-time banking has truly arrived.

Demand for real-time banking among corporate treasurers – offering instant availability of funds, instant payment confirmation, settlement finality, and more rapid communications all within a B2C-style user experience – will hit an inflection point as the need for streamlined payments intensifies. This year, expect corporate treasurers to accelerate their adoption of real-time banking, and of similar strategies that make the work of overseeing payments that much faster and less cumbersome.

4) Payment practices must adapt to meet new regulatory compliance requirements.

Newly introduced regulations will provide corporate treasurers with opportunities to improve their payment processes and practices, meeting compliance needs while introducing beneficial new features. These regulations – such as the National Automated Clearing House Association (NACHA) in the U.S., and the Second Payment Services Directive in Europe – require corporate treasurers to understand and proactively fulfill their organizations’ obligations under the law. Expect savvy corporate treasurers to ensure that changes implemented in the name of compliance also serve to improve everyday payments capabilities, from tighter security to improved fraud prevention to greater on-demand access to data.

5) Concerns over security breaches and fraud are rising.

Considering the intensifying volume of payments that corporate treasurers are responsible for processing and the expanded attack surface they represent, it’s natural that 60 percent of treasurers surveyed by Strategic Treasurer reported being more concerned about payments security now than in previous years. Attackers now practice highly-effective spearphishing, account takeovers, and other tactics that rightfully keep corporate treasurers up at night and drive them to pursue newer security strategies.

6) Corporate payments will be meaningfully streamlined by open banking and API-based services.

Increasing numbers of corporate treasurers will take advantage of new bank offerings delivering payment optimization. Based on open banking and APIs, these new bank offerings will provide features including real-time on-demand connectivity to support quick and easy payment processing, and deep self-service options that treasurers will find highly advantageous.

7) Mobile access to payment approvals and more capabilities will grant corporate treasurers newfound efficiencies.

The year will see the arrival (and rapid adoption) of tools granting corporate treasurers the abilities to initiate and track global cross-border payments 24/7 from their mobile devices. Treasurers will leverage these capabilities to their fullest in order to introduce new, highly-impactful efficiencies.

8) Accelerated growth of real-time payments settlement networks will offer opportunities.

Real-time payments settlement networks – assembled out of allied banks and fintech providers – will grow at an increasing pace this year; the transaction amounts that these networks support will steadily grow in lockstep. Expect corporate treasurers to utilize these more streamlined networks to bring greater efficiency to their payment processing.

9) The universal tracking capabilities of SWIFT gpi will enable cross-border payments that are entirely transparent.

Corporate treasurers will leverage SWIFT gpi for its recently-introduced universal tracking abilities when it comes to cross-border payments. This will allow treasurers to observe payments with full transparency throughout each and every payment processing stage, resulting in expedited payment completion.

10) Corporations will increasingly leverage treasury management systems.

The challenges of managing disparate systems and maintaining payment processes in the face of rapid corporate growth will lead more treasury teams to embrace treasury management systems (TMS). A TMS serves as a hub for all payment activities, capable of guaranteeing the success of straight-through processing by automating formatting translations between back-office systems and banks and clearing houses. A TMS can also aggregate payment processes and data to streamline bank logins by the treasury team, while offering increased payments status visibility, and simplified reporting. As internal teams are increasingly strained by rising payments volumes, the advantages offered by a TMS will become all the more welcome throughout 2020.

By Roger Comins, Director, Product Management, GTreasury

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