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Expert briefing: The evolution of payment tracking

Payments are the lifeblood of any company. But for years, corporate treasurers have faced a big challenge when sending or receiving money across borders - the lack of visibility into the status, timing or costs of those payments. In this sponsored editorial, Marc Delbaere, global head of corporates and trade at SWIFT, explains how payment tracking is ushering in a new era of clarity.

 Historically, making an international payment required corporate treasurers to take a leap of faith.

They could only hope that once they hit send the payment would arrive as planned. They had no indication how long it would take. What fees would be deducted. Or even if it reached the recipient.They were in the dark in the other direction, too. When a customer sent a payment, treasurers had no idea it was on the way. And if it amounted to less than invoiced because of fees in the payments chain, they had to investigate the discrepancy and reconcile the difference.

This lack of visibility created uncertainty and unpredictability that complicated forecasting and cash flow management – essential functions for large corporate groups. It also stood in contrast to experiences in treasurers’ personal lives. When ordering online, payments are immediate and delivery dates and costs are clear. A tracking capability provides real-time status. Undoubtedly, many wondered why they had more visibility into a low risk £10 transaction than a critically important multi-million pound payment.

Tracking via banks

Corporate treasurers shared their concerns with the wider financial services community. SWIFT listened and introduced gpi [global payments innovation]. Among many benefits, the service enables banks to offer their corporate clients improved visibility on payments.

SWIFT built on this capability by introducing a payments tracker in May 2017, providing an unprecedented level of visibility by enabling banks to trace cross-border payments in real time. This functionality marked a huge step forward, but corporate treasurers still had to go to each of their banking partners and request updates on each payment – worthwhile, but time-consuming work.

 What about the multi-banked corporates?

A treasurer from a large corporate told us: “An increasing number of banks are offering gpi tracking through their individual portals. That works well for companies only working with one bank, but not so much for a multinational business dealing with multiple banks.”

Again, we listened to the concerns of corporate treasurers, and earlier this year we launched SWIFT gpi for corporates. Designed and built in conjunction with banks and corporates, the capability lets multi-banked corporates initiate and track payments across multiple banks directly from their treasury and payment systems.

It affords corporates a single centralised and standardised view across all their banking partners, enabling them to track all their outbound payments in real-time, facilitating more accurate reconciliation, and preventing costly and time-consuming investigations.

The same corporate treasurer with the concern about logging into several different banking portals to track payments, said that gpi for corporates’ centralised view solved this problem.

Inbound development

We are now beginning the next iteration of the service: inbound payment tracking.

Building on the unique capabilities of SWIFT gpi, visibility of incoming payments leveraging the existing gpi tracker will help corporates with the management of working capital as well as payment reconciliation operations.

We recently kicked off a trial with leading corporates such as Alibaba and General Electric, and a group of global banks including Bank of America, BNP Paribas, Citi, DBS, Deutsche Bank, HSBC, Intesa Sanpaolo, National Australia Bank, Societe Generale, Standard Chartered and Unicredit.

While this is the next stage in the evolution of payment tracking, it won’t be the last. A range of other developments are in process to further reduce friction, create even more efficiencies and, ultimately, deliver a seamless experience for corporate treasurers.

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