Treasurers Will Have ‘Cloud Moment’ as Real-Time Payments Gain Traction

As Modern Treasury Co-Founder and Chief Product Officer Matt Marcus sees it, over the next few years, the payments sector will see seismic shifts as transactions make the leap to near-instant settlement and widespread usage.

Speaking with PYMNTS, Marcus said he’s grown used to rapid change, especially in the four years since Modern Treasury was founded.

“From when we started the company through today, we’ve seen the development of APIs [application programming interfaces] and real-time payments, even where ACH and legacy technologies were still the name of the game for payments in most companies — no matter if they were small or large enterprises,” he said.

Moving Beyond Spreadsheets

Increasingly, finance requires the real-time movement of data, which can be a huge back-end problem for companies, noted Marcus. Those back-end processes are inefficient, dominated by spreadsheets. As a result, many finance groups spend a significant amount of time juggling manual tasks, often at the expense of taking on more strategic roles in their firms.

“It’s hard to get all the data in place, especially with all the metadata that you need to understand what’s actually happening within a company,” Marcus said.

Traditional payment methods such as ACH are hamstrung by limits on the data that can accompany payments or show up on statements, whereas real-time payments are well stocked with metadata.

Financial services is having its “cloud moment,” Marcus said, where the collection, analysis and transmission of that metadata will be made easier with the emergence of real-time payment networks and FedNow.

“The groundwork has been laid,” he said.

And with that groundwork in place, providers such as Modern Treasury are in place to help accelerate the adoption of real-time payments, helping client enterprises move beyond the limitations of batch-based processes. Modern Treasury’s platform and API-driven approach, he said, can help companies grapple with the challenges of sending and receiving requests for payments or how to deal with exceptions and disputes, while ensuring that risk management and fraud prevention measures are in place.

“We can build all of this into our software so that as companies become broadly ready to adopt these new technologies, they can bring them into their businesses,” he said.

Along the way, the benefits of modernization will become apparent — chiefly through an improved customer experience (including employees, as real-time payroll transactions become more widely prevalent).

The emergence of FedNow and the interoperability of real-time payment schemes will change the ways that treasurers interact with B2B trading partners as they scale into new markets. With reduced lag between the time they need to collect and disburse funds, there is less volatility and exposure to rapidly changing foreign exchange (FX) rates, he said.

“People will have a clearer view of where their money is and the timing of when money comes into and flows out of different banks, in different regions,” Marcus told PYMNTS.