The lines between models of commerce — online and offline — once distinct, are blurring. Along the way, business models themselves are continually being reinvented, becoming ever more flexible and adaptive to consumer demands.
Brick-and-mortar companies have become eCommerce players. Consumer packaged goods (CPG) companies are embracing direct-to-consumer (D2C) models.
Marketplaces aspire to become super apps. B2B transactions, traditionally mired in paper, have moved to digital conduits.
Banks and FinTechs offer similar services and products, and in many cases team up to provide innovation delivered across smartphones.
In the middle of it all stands the corporate treasurer. That individual is asked with steering daily cash-in and cash-out activities of the enterprise that, quite simply, must evolve or die.
Different business models mean differing payments flows, which translates into waves of new challenges in corporate finance.
The treasurer must navigate increasingly global vendor relationships, new markets, foreign currencies and the ever-present demands of risk management. They must also make sure accounts are in the “right” location, in the name of the correct entity.
Amy Eckhoff, head of APAC liquidity and account solutions specialists, and Tim van Bijsterveldt, executive director of liquidity and account solutions specialist, both at J.P. Morgan Chase, told Karen Webster that embedded treasury functions can unlock value from liquidity and settlement optimization designed to power frictionless payments — and pave the way for new frontiers in third-party money movement.
The new frontiers can engender a spirit of collaboration between the treasurer and executives plotting the strategic direction of the enterprise itself.
Those new frontiers, said the duo, are necessary, because money movement is no longer just about minimizing the number of accounts that are in the treasurer’s purview, or adroitly managing a basket of currencies. More than ever, companies in the B2B and B2C spaces are handling transactions for third parties across far-flung markets and time zones.
And the treasurer can no longer be seen as just playing catch-up to the demands of eCommerce.
“The treasurer’s skillset brings value to the table across departments,” said van Bijsterveldt.
Giving Rise to New Frontiers
Today’s realities are about far more than just setting up accounts and monitoring fund flows.
As Eckhoff explained it, with platforms, an enterprise may wind up paying cash to multiple other businesses and may need to offer a slew of alternative payment methods, even while making sure they are in compliance with each market’s rules and regulations regarding payments, licensing and data protection.
“These are things the treasurer may not have had to think about … until now,” said van Bijsterveldt.
Treasurers wind up becoming strategic partners to the parties transacting on the platform. At a high level, said Eckhoff, platform-based selling, complete with an attendant wealth of data that accompanies each and every transaction, has given treasurers the benefit of better visibility into cash positions.
Better control of cash positions means that positive ripple effects can be felt across other departments, including supply chain planning and even product development.
Payments data, said Eckhoff and van Bijsterveldt, are integral for companies as they move to tailor new products to new audience, and as they gain entrance into new markets.
“For a traditional corporate entity, moving into payments is compelling,” they said. “That movement allows businesses to more readily monetize their existing infrastructure, their platforms and their community.”
But complexity reigns with the platform model, noted van Bijsterveldt. Platforms act as a broker, of sorts, between distributors, merchants, buyers, suppliers and individual end customers.
“Whatever you’re selling on the platform means that the funds may not necessarily belong to you [the platform operator],” he said.
That means that treasurers have to start segregating funds into different accounts and might even have to contend with micropayments.
There are also contractual considerations, said van Bijsterveldt, that can vary between the platform and its sellers, and who holds cash on behalf of whom (and when).
An optimal treasury model, said van Bijsterveldt, can consolidate and streamline these activities for the treasury executive, chiefly through advanced analytics and software. Eckhoff noted that a “gap” exists between the treasury (currency and risk management) and commercial sales activity, and the gap can be bridged with real-time information. That real-time information, said Eckhoff and van Bijsterveldt, is furnished through the use of applications programming interfaces (APIs) and back-office automation.
These functions are critically important, he maintained, and need to be “layered” into the market in which a company is operating. And with a nod to the value-add that data provides, he said enterprises can build out — market by market — digital wallets, loyalty programs and rewards that keep transactions flowing across those platforms.
“The treasurer can become a critical growth engine for eCommerce,” said van Bijsterveldt.
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