The treasurer’s role is to maximize cash in and cash out of an enterprise. From the treasurer’s point of view, everything affects liquidity. Everything can affect cash flow.
Juan Garrido, head of merchant services product, global banking at Bank of America, told Karen Webster that within the retail sector, treasurers are developing an appreciation for merchant services, of how payments acceptance is changing, of how, ultimately, payments can help firms expand their business.
Along the way, he said, treasurers can have some input into the retailers’ product development and design.
Treasurers, he said, “are seeking to understand exactly how purchases are being made, how consumers are changing — and they need to understand exactly when the settlements are taking place.”
With a range of different payment options (and networks!) in the mix, with omnichannel transactions growing by leaps and bounds, money can flow into those firms at different times, and the advent of options such as buy now, pay later can add a layer of complexity, said Garrido.
Treasurers are moving firmly away from the age-old job description of simply monitoring the corporate balance sheet. Treasurers are, in fact, morphing into key decision makers as their companies broaden their reach, embrace always-on commerce, and pursue new markets.
Nuances matter, he said, when optimizing liquidity, and combining treasury and merchant acquiring/services requires understanding if retailers go through wholesale channels, for example, or go direct to consumer.
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With knowledge of merchant services, merchant acquiring and the minutiae of those services, treasurers can have an ongoing dialogue with the CFO and other corporate executives about everything from product development to pricing to bundled offers that extend loyalty and rewards to consumers.
“These executives want to make sure that when they are thinking and talking about a strategy that they are not doing so in a silo,” Garrido remarked to Webster, “and they are looking for ways to create synergies across the enterprise.”
Input From the Banks
These treasurers need a bit of help though, Garrido said, in understanding more about the merchant-level concerns. The opportunity is ripe for financial institutions (Bank of America among them) to educate and collaborate with those treasurers, bringing a one-stop shop of treasury and merchant acquiring services to them (including card issuance).
As a result, they can help treasurers anticipate and be proactive about the changes that lie ahead for commerce.
“That’s the reason why you have companies that are bringing in the various teams and we at Bank of America are having conversations with clients about merchant services and treasury,” he said. Those conversations are happening earlier and earlier in the product development cycle. Not surprisingly, the treasury team has the most direct impact and influence on payments (and payments optionality).
Getting Ready for Web3
The bank’s role is, in Garrido’s telling, to leverage the FI’s own expertise in merchant acquiring and to bring that knowledge to the retailer’s treasury counterparts and merchant team. Integrating data flows, collection, reporting and analysis, with direct integration into ERP systems can help simplify commerce’s complexities.
The merchant services group can also gain insight about real-time payments, about crypto, virtual cards and new fund flows that are likely to change consumer-facing commerce in the years ahead.
“These retailers,” he said, “are starting to think about multicurrency conversions, about new ways to use digital wallets, about loyalty and rewards that can be bundled together,” he said.
Looking ahead, he cautioned that treasurers need to start thinking — if they haven’t yet started — about Web3 and the looming impact of the metaverse. They’re going to be well-served by taking advantage of the full suite of FI offerings, with a single point of contact. As they observe the trends taking shape, Garrido said, they can decide where to invest time and money — and when — in a quest to maximize returns on investment.
As he told Webster: “I like to think we’re in the golden age of payments, because there is so much innovation that is taking place.”
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