Smoothing the way for real-time frictionless payments

By Roger Comins, senior product manager, GTreasury

14 November 2019

Corporate treasurers are experiencing more payments volume than ever before, with billions of transactions executed daily across a variety of channels, currencies, and countries. Enhanced formats are emerging at lightspeed, and organizational structures are shifting with buyouts/expansions and the adoption of multi-system environments.

The ultimate end-goal of corporate payments efficiency is real-time payments with straight-through processes and fewer errors along the way. Ideally, corporate payments would be executed in a similar way to many B2C transactions, providing a frictionless experience.

Take Uber for example, the rideshare app has become ubiquitous, at least in part, due to the ease of paying for a ride without ever having to get out cash or a credit card. Uber passengers expect everything to be completed for them beforehand: no muss, no fuss. Uber’s back end processes allow a payment method to be pre-loaded, and for the ride fare to be pre-agreed before the driver and rider ever meet. In essence, taking an Uber is a frictionless experience.

The next step in B2B payments must be to replicate Uber’s type of streamlined customer experience across the payments landscape. However, today’s treasury professionals are hampered in the quest for a frictionless experience by several factors that cause significant stress on their operations.


What’s causing the pain in treasury?

When it comes to payments, treasurers face three main pain points:

1. Global growth

As more and more corporations expand their global footprint, cross-border payments have become an everyday occurrence. In 2018, a Strategic Treasurer survey of treasurers from across industries, organization sizes, and locations found that 37 percent of firms operated in more than 11 countries; 39 percent generated payments in more than six currencies; and 34 percent used six or more banks. The need for payment systems to interact seamlessly with disparate portals, accounts, clearing systems, formats, and currencies demands vigilance and expertise the treasury department may not have. 

Making matters worse, corporate acquisitions – whether combining domestic or international companies – often include unique payment integrations with back-office systems that aren’t compatible with the new IT infrastructure as a whole. While it is possible to continue payment transactions on disparate systems, keeping track of where payment data is stored can be overwhelming. Resolving the conflicting processes to integrate data from each system into a central hub to facilitate accurate corporate reporting takes manhours that are generally not readily available.

2. Payment acceleration

The sheer volume of payments for large corporations has increased exponentially. The Strategic Treasurer survey also found that 54 percent of corporates maintain more than 100 bank accounts, and 86 percent originate payments from more than three banks. More to the point, 45 percent of corporates generate more than 10,000 payments globally every month.

Corporate treasury professionals are tasked with navigating the complexities of a range of channels, formats, portals, clearing systems, etc. However, with so many variables, straight-through processing is often compromised due to formatting errors that cause payment delays and costly fees. When payments are halted, treasury is tasked with resolving the issues that caused the payment to fail, which increases strain on the already overburdened workforce.

3. Fraud and security concerns

Strategic Treasurer also found that 60 percent of the respondents reported having higher payments security concerns now compared to prior years. It’s no wonder, considering the sheer volume of payments transferred each day.  The more exposure points an organization has, the greater the risk of a security breach, be it an account takeover, a spear-phishing attack, or other fraud.

Security cracks may exist within a company; others appear through a bank or third-party contact; and still more may show up while data and funds are in transit. It’s up to treasury to ensure each vulnerable position in the payments process is fully protected.

New compliance regulations such as Europe’s second Payment Services Directive (PSD2), and regulatory bodies such as the National Automated Clearing House Association (Nacha) in the US, seek to standardize processes with the goal of minimizing the potential for fraud and security breaches. Some of the compliance changes are spurring some exciting innovation such as greater on-demand data access. Yet with the new compliance requirements comes more work for treasury to ensure all payment operations are meeting the directives.

When you add in incompatible messaging, spotty connectivity, time-sucking back-office systems, manual processes and understaffed treasury teams, it’s easy to see why payments processes cause organisational pain.


 Exciting innovation is helping to ease the pain

The good news is that the payments sphere is not all doom and gloom. In truth, the pain treasury is feeling around payments is driving new processes and systems. Treasury will be seeing more channel options, faster payments with greater visibility end-to-end, and mobile access and smart systems driving huge improvements in the customer experience on the corporate side. 

  • Open banking and the use of APIs will make payment settlement and services easier and faster. With real-time and on-demand connectivity, treasury professionals can call for data and services from the banking platform more easily. More and more banks will be offering self-service options through APIs that allow access to needed data right when it is required.


  • Settlement networks for real-time payments are growing quickly. As more banks and fintechs join, and the amounts that can be sent over the networks continue to grow, treasury professionals will be able to streamline payment processes to fewer networks to realise greater efficiency.


  • SWIFT gpi has implemented universal tracking to improve end-to-end visibility of cross-border payments, allowing treasury professionals to see where payments are every step of the way. SWIFT is reporting that improvements in processing time are already being realised due to the increased visibility.


  • New mobile capabilities on the horizon will allow treasury professionals to approve payments on the go or view their status at any time, which can be incredibly useful when initiating and tracking cross-border payments in the global 24/7 economy.


Streamlining payment operations is essential 

The more the corporate footprint grows globally, the more difficult it will be to maintain efficient, accurate day-to-day payments processes through disparate systems within the organization. Using internal resources to continually adapt the enterprise resource planning or other back-office system to interface with a growing number of banks and clearing houses will become untenable. The good news is there is an answer.

Leveraging the software, expertise, and economies of scale of a payment hub in a treasury management system (TMS) relieves many payments challenges. In particular, the TMS can automatically translate the back-office system’s formatting to the formatting required by banks and clearing houses to ensure straight-through processing. It can also aggregate payment processes and data to reduce the number of banks the treasury team must log into to initiate payments, provide greater visibility into payments status, and simplify reporting. The benefits of a TMS may also be applicable to other areas of the organization giving treasury departments the ability to act as a shared service centre for the entire corporation’s payment processing needs.

When initiating a search for a TMS, it is advisable to include the finance and IT/business tech teams to ensure a wholistic corporate perspective and possibly solve more than one department’s pain points. Developing a more comprehensive request for proposal for vendors also helps to answer the questions of all affected teams upfront to save time on selection and implementation. For treasury teams already using a TMS, a thorough review of the full capabilities of the system with finance/IT/business tech teams may reveal additional capabilities and benefits that can be realized from the same system. 


Roger Comins is the director of product management at GTreasury. He can be reached at

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