How can corporate treasury departments make money transfers anywhere in the world from any device in under three minutes? In the era of instant payments, making money transfers transparent, safe, and still user-friendly is a challenge for companies and bears considerable risks. So-called “real-time payments” require treasury experts to look closely for suitable payment processing solutions.

In addition to the B2B payment process challenges, regulatory institutions and government authorities also scrutinize all payment activities. On top of that, the manual execution of payments with highly fragmented workflows and semi-automated actions managed with individually customized systems holds plenty of potential for human error or deliberate manipulation. Companies that do not actively address these challenges demonstrate a low strategic focus on payment processing and see it as a cost rather than an opportunity to bring more efficiency and transparency to the process.

Currently, most companies are moving their operations online in response to COVID-19, and that is an opportunity for their treasury department to optimize payment processing via smart and secure solutions. These solutions should combine a variety of features under the same umbrella to centrally manage all payment transactions.

Most of the challenges associated with payment processing can be overcome with:

  • Full automation throughout the entire payment lifecycle
  • End-to-end monitoring capabilities
  • Compliance with security requirements, fraud prevention, and regulatory requirements (e.g., Anti-Money Laundering Directive, the Second Payment Services Directive (PSD2) etc.)
  • Access through multiple banking communication channels
  • Standardization and reduction of message formats

To manage their internal processes, firms often use enterprise resource planning (ERP), in-house software, or combine various dedicated solutions from multiple providers, all of which can derail implementing automatic payments.

A complete payment automation process starts with implementing an OCR solution to avoid manual entries. Disbursements should be initiated using automatic payment runs in the internal ERP, which should be received centrally as payment orders. At the central payment hub, the firm should have the capability to initialize the enrichment, validation, and routing of the payment messages to the external bank. Once the payment messages have reached the bank server, the central payment hub will be acknowledging the payment status until the execution is complete. By receiving the electronic bank statements, the firm can automatically perform the internal reconciliation and complete the process with minimal human interaction.

With the help of a centralized process, many of the above challenges can be solved. Also, access to real-time payment execution and full automation with the use of technologies such as the cloud, AI, RPA, and APIs to innovate payment execution and internal reconciliation and enable plug-and-play automation can increase collections and streamline disbursements.

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