Citi TTS North America Head of Payments and Receivables Anupam Sinha told PYMNTS’ Karen Webster that 2023 has been a year where companies have focused on cost reductions.
Nonetheless, said Sinha, among the key words of advice Citi is offering its corporate clients is this: “You need to make sure that you are also working on your growth agenda.”
Growth is tied to more sales, and more sales come with a judicious, market-by-market approach to eCommerce for merchants, or — for other enterprises — a direct-to-consumer (D2C) approach that moves beyond B2B payments and can minimize costs tied to the traditional dealer/distribution model by as much as 30%.
The one thing that’s top of mind for companies is payments ubiquity, he said. Getting there means that investment in the future is necessary — and in some cases requires significant investment in infrastructure.
“But investment,” he added, means “looking at various payment options. Real-time payments and instant payments may grow significantly — and as we talk to our clients, we talk about how you might need to examine completely re-architecting your infrastructure,” including treasury systems.
Regardless of whether those corporate clients are companies that are strong in one market or geography and want to move into more countries, or are focused on commercial transactions, there’s a digital starting point that has become a part of the consumer and business experience that governs how eCommerce is evolving.
“Consumers’ preferences and tastes and buying and shopping habits have changed, and that’s what’s being registered with our corporate clients and CFOs,” Sinha said. “… And speed to market is what’s differentiating the winners from everybody else.”
In satisfying those shifting tastes, payments acceptance is critical — and so is providing optionality, he said. Citi often guides its enterprise clients to stick to the 75% rule, meaning that if a payment is embraced by roughly three-quarters of a country’s population, it must be offered at checkout.
In adding those payments options, he said, merchants and other firms want to maximize their payments success rates, where authorization is high in a bid to offset the costs of that payments acceptance — no matter if it comes through digital wallets or other innovations.
Sinha noted that partnering with providers such as Citi can offer a single point of connectivity to several payment options (through application programming interface, or APIs) that require minimal change at the enterprise level.
“That’s one single API for our clients to make payments, too, whether it’s payments to the sellers on their marketplaces or to their suppliers,” said Sinha.
The technological and digital shifts that are transforming eCommerce will also transform brick-and-mortar retail, said Sinha.
Having the right technology on hand can help create personalized, curated experiences in the aisles (often with the aid of digital assistance that is housed on personal mobile devices). The ultimate goal will be “to make sure that the kind of experience that I get online is the experience that I am used to in-store,” Sinha said.
Looking ahead, reducing costs, promoting new payment methods and offsetting risk will also require a mindset change from merchants and B2B enterprises. Where once a batch-based mentality was a mainstay, and reconciliations were done at the end of the day, now executives must adapt to real-time fulfillment and real-time payments moving through real-time information systems.
“That all takes a lot of investment, but if you’re not able to invest at the right time in the right technology and the right processes, then you are impacting your long-term growth,” Sinha said.
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