Recap #2: Round Table “The bridge between customer convenience and reconciliation” | Toekomst Betalingsverkeer

04-10-2021 | François de Witte | treasuryXL |

 

Here is my second recap where I will highlight the round table topic: Request to Pay: the bridge between customer convenience and reconciliation?

 

1. Introduction

On September 9, 2021, the event “Toekomst Betalingsverkeer”  has taken place in Amsterdam. Amongst others, following topics were covered:

  • The Fintech evolution of banking.
  • Platform strategies & developments big tech.
  • Customer experience strategies.
  • Open banking.
  • Instant payments.

I hosted two round table sessions, the other round table named “Payment Challenges in a Post-Covid World”, and you can read the recap here.

2. Setting the Scene

The Request to Pay (RTP) is a payment technique allowing a business or individual wishing to receive a payment, to send an electronic request for that payment to the debtor account.

The request will be received by the payer – most likely via an electronic interface such as a mobile banking app showing the requested amount and the due date. The payer will then have some choices:

  • Pay in full.
  • Pay part
  • Ask for an extension
  • Decline payment

If the payer chooses to make a payment, the payee will be notified whether the payment is in part of in full and when it has been confirmed.

The scheme is operational in the UK.

The European Payments Council has published the first version of the Single Euro Payments Area (SEPA) Request-To-Pay (SRTP) scheme rulebook, which is expected to go live during 2022.

3. Outline of the scheme

 

Source: IS REQUEST TO PAY THE SYSTEM FOR A WORLD OF NEW NORMS? Finextra July 2020

 

4. Request to Pay: Benefits and challenges

The major advantage of the scheme is the convenience: when consumers want something, they want it quickly—immediately, if possible— and they want to pay for it as simply as possible, preferably using contactless payment. And, if possible, without even leaving the couch to dig out their card or account details.

Another advantage for the payor is that keeps a full control of the payment process.

For the Merchant, there are also important advantages, such as:

  • The follow up of the payment process.
  • The certainty of the payment: once the payment has been done, it is final, which is not the case for direct debits, where the payor has a refund right.
  • The easy reconciliation at the Merchant’s side, as the payment message in the RTP is not altered.

The challenges are to find the right and secure network to send the invoices and to channel the payments – there are already providers positioning their offer, to get the consent of the payer to receive his invoice through the RTP and to come to a standardization of the different schemes. This will be a key driver of success.

The SRTP (SEPA Request to Pay) is a good step in this direction. Following on a 3-month public consultation, the EPC expects to publish on 30/11/2021 its next rulebook (entering into effect 6 months to 12 months later – to be confirmed).

 

Thank you for reading!

To see all my previous blogs, click here.

François de Witte

 

 

 

 

 

 

Refinitiv case study | How Mercuria manages risk across assets with a single platform

04-10-2021 | treasuryXL | Refinitiv |

Mercuria is a global energy and commodity group, operating in more than 50 countries with over 1,000 employees and offices worldwide. Read more about why Refinitiv Eikon was selected to fulfill the complex cross-asset requirements from pre-trade, trade, through to post-trade and credit screening.

Mercuria’s business lines cover a diverse range of commodities trading as well as large-scale infrastructure assets. For that reason, they searched for a cross-asset platform to manage credit, pre-trade, trade and post-trade  to quickly, efficiently and accurately access global market insights, trusted market data and ‘best-of-breed’ industry analytics to help price-up derivative products.

Refinitiv Eikon platform was selected to fulfil the complex cross asset requirements from pre-trade, trade, through to post-trade and credit screening.

 

 

#8 Working with a Currency Provider that uses Rigid Procedures

30-09-2021| treasuryXL | XE |

A common problem for companies looking to manage Currency Risk effectively and want to carry out transactions as cheaply as possible, is that the terms of their currency provider are not flexible enough. This can especially be a problem for companies for which a hedging strategy is suitable but who are put off by the need to pay upfront or a margin for their forward positions. Some currency providers may in such situations offer more flexible credit terms than others.

Zonder die flexibiliteit is een hedgingstrategie voor sommige bedrijven niet haalbaar, zelfs als het valutarisico van het bedrijf aanzienlijk verminderd zou kunnen worden door de implementatie van zo’n strategie. In andere gevallen kunnen bedrijven wel hedgingposities nemen, maar niet onder de voorwaarden die het best bij hun individuele omstandigheden passen. Denk ook aan andere vormen van flexibiliteit. Biedt uw valutaprovider bijvoorbeeld toegang tot verschillende soorten betaalservices? Dat kan van belang zijn als u snel betalingen wilt doen aan verschillende partijen in verschillende markten en tegelijk zo veel mogelijk tijd wilt hebben om de transactie te voltooien. Zoek een provider die zijn service kan afstemmen op uw specifieke eisen en wensen. Uiteindelijk gaat het erom uw bedrijf zo veel mogelijk speelruimte te geven. Of het nu gaat om de dagelijkse transacties of het beheren van het langetermijnrisico, de manier waarop u vreemde valuta benadert, moet worden bepaald door zakelijke eisen en niet door de beperkingen en rigiditeit van uw valutaprovider. Bespreek met verschillende providers wat zij u kunnen bieden.

Klik hier voor meer Info en Download WhitePaper



Why You Should Say Goodbye To Spreadsheets

| 29-09-2021 | treasuryXL | Nomentia |

A recent Cash management survey that we did showed that 43 percent of respondents continue to experience issues with their Cash flow forecasting. Unsurprisingly, more than half of the market still use spreadsheets to execute this business-critical function. The million-dollar question is, why?

According to the European Spreadsheet Risks Interest Group, the reliability of a spreadsheet is essentially the accuracy of the data that it produces and is compromised by the errors found in approximately 94% of spreadsheets.

If accurate cash flow forecasting remains one of the key priorities for treasury and finance professionals alike and the market has easy access to affordable, cutting edge forecasting applications, why do we continue to rely on outdated, ineffective forecasting tools?

Common myths prevail that spreadsheets save money, are easy to use & flexible. In the spreadsheet’s defence, it’s a nifty tool, that ticks many of the aforementioned boxes and can work very well with cash forecasting solutions. But, for a growing business looking to mitigate risk and plan for the future, risks run high if you’re relying on a system that’s almost surely flawed, demands hours of manual input effort, prone to human error, exists largely undocumented and which no one really knows how it works.

“After the clever intern, who developed the nifty macros and formulas is no longer around……nobody knows how the application generates the numbers.”

Penny wise, pound foolish 

Spreadsheeting is, by and large, the manual process of gathering, inputting and administrating data. Typically, spreadsheets have been built up and added to over a period of years, becoming cumbersome to manage and share. In an eye-watering number of cases, the person originally responsible for constructing the spreadsheet has long since left the department. No one knows the algorithm behind the macros and no one assumes responsibility for its maintenance, let alone documenting changes and adaptations. The whispered precedent remains, “if it’s not broken, then leave it alone”……… Ouch!

Alternatives are perceived to be more expensive. Excel, for example, is cheap to acquire whilst Treasury Management Systems are expensive with lots of added features that SME’s in particular, don’t require.

Busting the myths

Cost is no longer a plausible reason to rely on spreadsheets for cash flow forecasting. Cloud-based solutions such as Nomentia Cash Forecasting, offer competitive pricing. Modular, on-demand, SaaS solutions have revolutionised application choice. Simply choose the modules you need, pay by the month and no IT involvement required. Free up more departmental time by reducing the number of resource hours required to maintain a spreadsheeting process and the cost-saving just got bigger.

Spreadsheet errors and inaccuracy are by far the most compelling reasons to consider a move to a specialist cash forecasting application. Finance and treasury cannot afford to make mistakes. Inaccurate cash flow forecasts can literally lay to ruin to a company’s business reputation and/or result in a financial loss or penalty. No scare tactics needed.

Mini Case-Study: Conviviality a ‘Spreadsheeting Horror Story’

(Source: The Guardian UK, 21 March 2018)

At first, the drinks retailer Conviviality said profits would be 20% lower than the £70m expected by the City, with £5.2m of the £14m hole that had opened up in its forecast, down to a spreadsheet error. The remainder was a reflection of weakening profit margins.

On 21 March 2018, the Guardian (UK) reported “Firm issues third profits warning; says it will meet investors to raise funds via a share placing’’. The company, in a stock exchange announcement, said it was holding meetings with investors to raise £125m via a share placing that would help it pay a £30m tax bill due at the end of the month, fund overdue payments to creditors and repay a £30m loan.

The company blamed the first shock profit warning on a spreadsheet arithmetic error made by a member of its finance team and weakening profit margins, and then admitted it had not budgeted for the £30m tax bill due this month.”

Conviviality has since gone into administration

Whether or not the use of spreadsheets was the sole cause of this bankruptcy is not clear, but it seems to have been a major contributor. Such cases are exceptional, but they do illustrate how relying on spreadsheets is not a sensible course of action for any finance & treasury team anywhere.

Many spreadsheets also contain, quite clever but complex, macros and apart from keeping these up to date, finance & treasury is responsible for ensuring their integrity. This is something that is not always feasible. Even when errors are spotted it is often very difficult to decode them, especially given the sheer size of the spreadsheets many finance and treasury folk utilise.

Embracing future-proof change

Readily available and affordable cash forecasting applications have, for those organisations who have embraced the benefits of technology, reduced risk exposure exponentially, facilitated real-time & accurate cash visibility, minimised human resource demand, and liberated finance leaders to take a more strategic role across the business. No-brainer.

Sometimes taking a leap of faith, moving away from the old and onto the new, can be a daunting decision. Historical hang-ups, ranging from less than favourable experiences with legacy systems, pre-conceived assumptions around cost implications, and work-flow disruption make it all too easy to decide to ‘leave well enough alone’. Before you take the decision to stick with the spreadsheet that’s done what it apparently ‘says on the tin’ for many years – let’s consider the following:

Back to the future

In a world where cyber security is of the utmost concern and data privacy, e.g., GDPR, is a regulatory requirement, can finance and treasury really afford to run their operations on spreadsheets? Spreadsheet security cannot and does not compare to the advantages of specialist systems that have been built with security in mind. Indeed, some spreadsheet applications lack even basic authentication security, can be easily copied and distributed outside the confines of the business without the knowledge or prior agreement of management.

Spreadsheets were built for convenience-only in a pre-internet world where cyber-attacks and data security were unknown and of no consideration. Spreadsheets were not built with security in mind.

Square peg in a round hole

Spreadsheets don’t grow with your treasury and finance needs. Organisations often try to adapt their spreadsheets to a growing business but soon realise that the complexity of doing so is almost impossible. Adding new accounts and deleting old accounts becomes challenging at the best of times, but managing this critical process in a spreadsheet, whilst trying to drive the business forward, is often a step too far, leading to errors and oversights.

Treasury and finance, by its very nature, consists of a number of different individuals performing a variety of activities, sometimes at the same time. This results in the sharing of valuable company information between several people and departments in any one day. Managing this process on spreadsheets can be difficult and nigh on impossible, even if some automation is achieved. Typically, only one person can update a spreadsheet at any one time so the workload that needs to be shared becomes inefficient and confusing. Maintaining full transparency around additions, edits, and alterations are off the table. Once an edit, or error, is made on the spreadsheet, it remains invisible and untraceable until something goes wrong. In addition, identifying the point of error-impact is often a time-consuming, futile, and frustrating exercise for some unfortunate departmental executive, even if they have the necessary investigative skills.

Doomed to repeat the same mistakes

Spreadsheets are not that good at quantifying or qualifying historical data, and treasury & finance needs this data regularly. That is not to say data cannot be stored in earlier spreadsheet versions, but due to the way they work, it is not a simple task to access, view, assess, and report this data as efficiently and effectively as modern cash management applications. Losing valuable historical data for comparison and variance purposes is a high-risk consideration. Accidentally saving over historic files, or indeed losing files altogether, is a terrifying experience we’ve probably all experienced at some stage in our careers. Notifying management of a spreadsheet faux pas is just as bone-chilling, remaining undisclosed and causing further inaccuracy to forecast outputs.

As alluded to in an earlier blog ‘Five expensive myths in Cash Forecasting’, there is a very real chance that the person who created the original spreadsheet has moved on and left the company. How many finance and treasury departments have found themselves in a position where a mega spreadsheet, long lauded as a ‘work of art,’ is no longer sufficiently supported and documented with non-existent instructions on how to maintain or update the worksheet.

Cassette recorders, big hair, leg warmers, the Rubik’s cube, Walkman, and mobile phones the size of small suitcases are all legacies from the 1980’s. Technology and hairstyles have moved on….. so should cash forecasting applications.

 

 

 

Binance and regulatory scrutiny: changing times for the crypto market

28-09-2021 | Carlo de Meijer | treasuryXL

Long-time regulators were not sure on if at all or how to handle the crypto ecosystem. But that has changed fundamentally with the crypto industry witnessing massive growth and interest from traditional institutions and major investors.


This year has been a year of increased regulatory focus of the booming crypto market. The potential for crypto exchanges to launder money has worried regulators all over the world, with US Treasury Secretary Janet Yellen and ECB President Christine Lagarde among those to voice concerns. As a result regulators and law enforcement agencies worldwide have begun to scrutinise suspect players and started to write regulations to bring those players within the blockchain arena to take control of them.

Recently the world’s largest crypto platform, Binance has come under regulatory fire. Regulators across the world are concerned over the potential for crypto to be used to launder money as well as the risks to consumers from volatile crypto trading. Most recently also DNB, the Dutch Central Bank, joined forces, saying Binance was not compliant with anti-terrorism financial law. It is unclear if this is a coordinated effort by regulators or something closer to a domino effect.

Regulatory scrutiny

Financial regulators across the world have now targeted major cryptocurrency exchange Binance. The platform has come under increased scrutiny from a growing number of regulators worldwide, including regulatory authorities from the UK, US, the Netherlands, Canada, Japan, Malaysia, Thailand, Germany, Cayman Islands, Lithuania, Hong Kong. And this group is growing.

The platform has faced warnings and business curbs from financial watchdogs who are concerned over the use of crypto in money laundering and the high risks of their products to consumers. Binance has also been accused of accepting ‘gigantic tips’ from creators of                  ‘questionable’ cryptocurrencies in exchange of receiving a privileged place on their platform.  Several countries have announced investigations in Binance and its products. While a number of countries have banned the platform from certain activities, quite a few countries have started banning it completely.

Banks are delisting Binance

Not just countries, but also a growing number of banks are cutting ties with the crypto exchange as well. Several banks or payment processors, primarily in Europe and the UK, have subsequently cut off the exchange, potentially freezing its customers’ accounts. Major banks began to ‘delist’ Binance in June and July of 2021, leading the exchange to suspend withdrawals and/or limit withdrawals dramatically on most accounts.

A number of banks, including Barclays, Nationwide, HSBC and Santander pulled Binance’s access or announced reviews of their approach to crypto at large. HSBC banned its UK customers from making any further payments to Binance, while Barclays suspended UK card payments to Binance, citing the FCA warning to customers. Also the European Union’s Single Euro Payments Area appears to have (temporarily) cut off Binance. SEPA payments to Binance were halted.

Regulators and Binance: some approaches

US
The largest of investigations is perhaps be through the US Commodity Futures Trading Commission  (CFTC), with the regulator seeking to determine whether cryptocurrency derivatives were bought and sold by US citizens on the Binance platform.  Binance is also reportedly under investigation by the US Justice Department and Internal Revenue Service (IRS). 

Cayman Islands
The Cayman Islands also challenged the lack of authorization of the exchange. Cayman Islands Monetary Authority (CIMA) said that all the entities associated with Binance are not registered, licensed, or regulated and thus not authorised to operate a crypto exchange “from or within the Cayman Islands“.

UK
Last week UK’s Financial Conduct Authority (FCA) stated that it is ‘not capable’ of effectively supervising the world’s largest crypto currency exchange, Binance. They also reiterated the risk its products could pose to customers. The FCA decided to ban the exchange from conducting all regulated activity in the UK for failing to report in line with its ant-money laundering (AML) regulation. The FCA also stated that Binance has refused to answer questions about its wider global business model, and ‘refused or was unable’ to provide (high-risk financial) products offered on Binance, such as their Binance Stock token.

DNB
De Nederlandsche Bank (DNB), the Dutch Central Bank, announced that Binance is providing crypto services in the Netherlands without the required legal registration. As a result the platform was not in compliance with the Dutch anti-money laundering and anti-terrorist financing Act. And thus Binance is illegally offering services for the exchange between virtual and fiduciary currencies as well as illegally offering custodian wallets. This may increase the risk of customers becoming involved in money laundering or terrorist financing.

Japan
Considered to be among the most crypto-forward countries, Japan’s Financial Services Agency (FSA) also warned Binance. It mentioned that the crypto exchange is not registered to accept business from Japanese residents, within the country, ordering to suspend operations.

Hong Kong
Hong Kong’s Securities and Futures Commission (SFC) notified that Binance’s offering of investing in Stock Tokens is not a regulated activity. Binance has not taken any license to offer the services to HK residents.

Malaysia
In June Binance was subject to enforcement actions by the Securities Commission Malaysia for alleged illegal operations. It was ordered specifically to disable Binance.com and mobile applications in the country from June 26 onwards. It was also told to stop media and marketing targeting Malaysian consumers and to restrict access to Binance Telegram group.

Thailand
Thailand’s Securities and Exchange Commission (SEC) notified that it has filed a criminal complaint against Binance. It stated that an investigation has been launched against the exchange for operating its business without a license.

What is Binance?

Binance is the world’s largest cryptocurrency exchange platform by trading volume according to data from CryptoCompare. Notwithstanding the various measures taken it still boasts a daily trading volume of more than $25 billion, which is significantly more than its nearest competitor Coinbase ($3,5 billion). Binance also leads crypto derivatives trading, in large part by allowing people to trade crypto derivatives using high levels of leverage, or borrowed money.
Crypto exchange Binance was established in 2017 by Chinese-Canadian entrepreneur Changpeng Zhao. Binance offers trading in over 500 cryptocurrencies and virtual tokens. Thanks to its own cryptocurrency BNB the Binance platform has a large group of loyal customers. They get a discount when trading/using BNBs.The crypto exchange offers a wide range of services to users across the globe, from cryptocurrency spot and derivatives trading to loans and non-fungible tokens. It also offers services around trading, listing, fundraising and de-listing or withdrawal of cryptocurrencies. Binance’s corporate structure is ‘opaque’ (non-transparent), though its holding company is registered in the Cayman Islands, according to British court documents and Malaysia’s watchdog. This might have contributed to today’s massive regulatory scrutiny.

Measures taken/announced

Binance is undergoing big changes to appease regulators, who are unhappy with some of the exchange’s products and their compliance with local rules. Therefore they have made regulatory compliance its top priority. In the wake of the regulatory pressure from various countries

Binance announced that they will be taking drastic steps to better meet financial regulations, improve user protection and manage risks, including strengthening their compliance and legal teams, banning or scaling back products, demand stricter background checks, change the business model and improve relations with regulators.

Focus on regulatory compliance

Binance is focusing on regulatory compliance as ‘the exchange pivots from a technology start-up into a financial services company’ CEO Zhao explained.

For that they unveiled a series of measures it is going to take to become what it says is a fully compliant and licensed institution in all countries it operates in, as fully licensed competitors continue to appear.

“Compliance is a journey – especially in new sectors like crypto. The industry still has a lot of uncertainty. We also recognize that with the growth comes more complexity and more responsibility”. CEO Zhao

Strengthening compliance and legal teams

Binance is strengthening their compliance and legal teams, by hiring more staff who have relevant regulatory compliance experience as well as very senior people ‘that can bring teams in’.  Binance highlighted that the exchange has increased its international compliance team and advisory board by 500% since 2020.  Binance declared that they are planning to double the size of their compliance team within this year.

Recent appointments

Binance recently announced it was hiring a number of former regulators to its compliance and executive teams. They recently announced the appointment of Richard Teng – former chief executive officer (CEO) of Financial Services Regulatory Authority at Abu Dhabi Global Market (ADGM) – as its new CEO, Singapore.

This announcement comes barely a week after the hire of former US treasury criminal investor, Greg Monahan, as its global money laundering reporting officer (GMLRO) – a move that seeks to clear up Binance’s ongoing money laundering issues. Binance also appointed Samuel Lim, who has over 10 years of experience in compliance in investment banking, as chief compliance officer and Jonathan Farnell, with over 20 years of experience in the UK financial and payments sector, as director of compliance.

Banning or scaling back products

Binance is shifting its commercial focus to other product offerings that will better serve its users for the long term. Binance has scaled back some of its range of crypto products that regulators may oversee. To make sure that all their products are fully compliant, Binance has been limiting their futures, derivatives products in most of Europe,  with users in Germany, Italy and the Netherlands among those first affected. It has also restricted the trading of derivatives in some parts of Asia as well such as by Hong Kong users. Binance also would stop offering crypto margin trading involving the Australian dollar, euro and sterling.  

“We need to make sure that all of our products are fully compliant … This is why we’ve been limiting our futures, derivatives products in most of Europe and some parts of Asia as well.” CEO Zhao

In July, Binance also stopped offering/selling digital tokens linked to shares like Apple Inc. and Tesla Inc. after regulators raised concerns about the products for appearing to violate local securities regulations. Hong Kong’s markets regulator became the latest regulatory body to warn investors about Binance’s stock tokens. These crypto products will be unavailable for purchase on Binance effective immediately. Customers who own the tokens may sell them over the next 90 days, and Binance will cease to support the products on Oct. 14, the exchange said.

Reduce withdrawal limits

Orders from regulatory authorities in different nations have caused Binance to reduce its non-KYC withdrawal limits. In an official announcement, Binance notified customers that the withdrawal limit for users with basic verification will drop to 0.6 Bitcoin in mid-August. This is in an effort to prevent money laundering and curb broader criminal activities happening through the platform.

Stricter background checks

Pressure from regulators globally also forces Binance to demand stricter background checks on customers to bolster efforts against money laundering, with immediate effect. This should further enhance user protection and combat financial crime. Until now, document-based ID checks at Binance were only required for users seeking higher limits on trading.

Steps taken by crypto exchanges to make identity and background checks remain varied, with some demanding full documentation and others allowing users to sign up for accounts with as little as an email address. Many large platforms also require users to submit ID documents, while others only require personal information for limited access to trades.

From now on, Binance users will have to complete a verification process to access its products and services. Users will now have to upload an ID card, driver’s license or passport to prove their identity. Those who have not done so will only be able to withdraw funds, cancel orders and close positions. The move represents a major shift by Binance.

Changed business model

Binance also plans to make a series of fundamental changes in its corporate structure to ‘get back into the good books’ of the regulators in the various regions to handling increased scrutiny from regulators. The company is going to have to totally overhaul its business model by institutionalising and centralising its digital asset operations. The crypto exchange has until now had decentralized operations, meaning it doesn’t have headquarters of any sort. Instead, they will now add headquarters around the world and work towards being licensed everywhere and become compliant as much as it can in every region where it plans to operate. Each of these headquarters would have regional CEOs as well leading to a centralized authority controlling all these subsidiaries. While this goes against what cryptocurrencies stand for, it is necessary for Binance to stay relevant in many countries.

Improve relations with regulators

Binance CEO Zhao also wanted to improve relations with regulators. Zhao’s focus on regulation is seen as a sign of the changing times in the crypto world. The CEO asserted that new laws are necessary for the crypto ecosystem to support its further development.

The firm is willing to work and communicate with regulators to bring compliance into the crypto ecosystem. For that Binance will expand the team dedicated to working with authorities to ensure services are compliant with local regulations. Binance is also willing to meet regularly with regulators to proactively update them on what the firm is doing. To start, Binance would share some user data with local regulators.

“We aim to work more collaboratively with policy-makers to improve global standards and discourage bad actors,” Binance CEO Changpeng Zhao

Is this enough?

Notwithstanding the various measures announced or taken by Binance there is still a lot of sceptics around Binance real intentions. In the crypto world it is still like the Wild West with many ‘ cowboys’ operating that are averse to rules. Some argue ‘the exchange is playing smart by trying to be compliant, having multiple entities, making influential hires, and more’. Others say ‘It is a nice marketing statement, but from the regulators’ perspective, this is not enough”. For them ‘it is a questionable approach to reportedly evading rather than complying with jurisdictional regulations’.

Still, some lawyers are skeptical over whether Binance move to tighten checks would convince regulators. Regulators would need to know which of Binance’s local entities run the know-your-customer process to audit and check if it complies with local laws. “Since they are doing it on a voluntary basis, regulators do not know whether they have the authority to supervise the identity check, and no one can look whether they are doing it properly.”

It is questionable if Binance is able to face the regulatory actions from so many countries and financial watchdogs at the same time. While Binance says it is intent on cleaning up its compliance image, it will take more than a few give-ins to the regulators to resolve the numerous bans and restrictions that it currently faces.

What may we further expect?

It is tough to say whether it is a coordinated attack on Binance with all the regulatory bodies are coming together against the exchange. Considering it is the biggest crypto exchange in the world and due to its sheer size, it may be expected that many more crypto platforms will come under intensified regulatory scrutiny.

Is this the beginning of a worldwide approach to regulate the whole crypto market? As one of the oldest and largest crypto platforms Binance symbolizes for the whole crypto ecosystem. What is sure,  what happens to Binance may signal how regulators will approach crypto, with enforcement actions against the exchange hinting at what other platforms should expect.

In my mind, this is not a step-change in regulation of the ‘crypto world’. It is part of a growing trend of worldwide and collaborated regulatory intervention in crypto markets. As a consequence regulations are quickly becoming the most important aspect of any company in the cryptocurrency industry. As governments around the world continue to work towards developing regulatory frameworks for crypto, companies are constantly needing to adapt to continue operating.

 

Carlo de Meijer

Economist and researcher

 

 

 

 

Source

Use gamification techniques in the checkout process

27-09-2021 | treasuryXL | EcomStream | Ramon Helwegen |

Gamification aims to increase engagement and create more loyalty through positive user experiences. Loyalty drives returning customers. It’s a loyalty risk if your checkout process is hard to complete.

The least exciting part of the online customer journey must be the checkout process, for sure. However, in a relatively simple way you can gain a lot here, limit abandoned shopping carts and drive loyalty of your visitor.

Imagine: Your customer has already chosen the product and has already agreed on the price. Isn’t it important to secure that conversion as quickly and as simply as possible?

What is the problem of a boring checkout process with all kinds of input fields? It is just not fun to do. Combine the pleasant with the useful. A gamified process is simply more pleasant to complete. With subtle adjustments, you can already achieve a lot and fortunately you do not have to reinvent the wheel yourself.

With a gamified checkout you set a goal, offer control, reward good behavior and deliver speed. By adding a gamified twist to the checkout process, you improve the necessary focus from your customer and limit the chance that he or she will be distracted and never finish the transaction again.

The checkout process is task-oriented and a number of things can be improved during this process. In the visual below you can see a number of thoughts and considerations that take place during the checkout process in the hearts and minds of your customers. By gamifying certain tasks you quite easily make checking out more pleasant. This also makes the overall customer experience just better as you remove friction.

A shopper who leaves the site even after the checkout has started? Make sure to avoid such a costly event.

A gamified checkout works. Just try it.

 

About EcomStream

EcomStream is an independent consultancy and is specialized in optimization of online, omnichannel and marketplace payment solutions, and optimization of checkout flows.

The goal is to achieve much lower costs for you while creating a much better customer experience for your customers.

Thanks to its lean organisational model, EcomStream will help you to reduce the cost of ownership of your payment solution and to improve your ROI, fast.

 

Interested to know more about what gamification can mean for your business? I am ready to help!

 

 

 

Ramon Helwegen

 

 

 

 

About EcomStream

EcomStream is an independent consultancy and is specialized in optimization of online, omnichannel and marketplace payment solutions, and optimization of checkout flows.

The goal is to achieve much lower costs for you while creating a much better customer experience for your customers.

Thanks to its lean organisational model, EcomStream will help you to reduce the cost of ownership of your payment solution and to improve your ROI, fast.

Press release: 20th Annual Liquidity Management | marcus evans

23-09-2021| treasuryXL | marcus evans |

For the last two years the banking sector has been in a challenging position as the liquidity management was and still is under the heavy influence of the pandemic

Aiming to help our long-standing partnership with our delegate audience in the banking sector, marcus evans, the leading provider of strategic conferences, continues its most renowned event in the banking industry and brings the 20th Annual Liquidity Management conference, which will take place on the 8th-9th of November 2021.

Join us in a two-day event where VP, C-Level and Senior Management Executives from leading Policy Makers and Banking Institutions such as the UK Finance, Credit Suisse, Standard Chartered, UBS, Deutsche Bank AG, Commonwealth Bank, Nord/LB amongst others , will present best strategies and effective practices through highly interactive speaking sessions, on key industry topics based on liquidity management

The conference format followed by marcus evans ensures that content is always clear of product placement and vendor showcasing to fully satisfy the delegates’ thirst for knowledge and meet their strategically oriented expectations.

Special Discounts are available for readers/subscribers of Treasury XL.

Click here to register for the event

 

For more info, please contact Ayis Panayis, Media & PR Executive at marcus evans at [email protected] or call on +357 22849327.

 

 

Your guide to UTR codes (with a UTR number example, how to get a UTR, and what to do if you lose it)

23-09-2021| treasuryXL | XE |

Whether you want to find a UTR and use it, or you’re lost in a maze thinking of what you should do if you lose the number, we’ve got your back with a UTR number example and more!

A Unique Taxpayer Reference (UTR) number is a code that identifies you or your business in the United Kingdom for tax purposes. Her Majesty’s Revenue and Customs (HMRC), a UK government department, is responsible for collecting taxes in the country and uses your UTR number whenever it deals with your tax.

You may need a UTR for submitting a tax return to HMRC, depending on whether you meet their eligibility criteria.

Feeling foggy already? Whether you want to find a UTR and use it, or you’re lost in a maze thinking of what to do if you lose the number, we’ve got your back, so take it easy!

We’ve also thrown a UTR number example into the bargain to help you understand all of this better. Let’s get the (UTR) show going, shall we?

What’s a UTR number example?

All UTRs have 10 digits, which sometimes end with the letter ‘K’. A simple UTR number example is 12345 67890, with a gap between 2 pairs of 5 digits each.

Do I need a UTR number?

If you have forms of income or expenses that require you to file a Self Assessment tax return, you’ll need a UTR number. This applies in case you:

  • Are or were self-employed as a sole trader and you earned over £1,000 GBP (without claiming tax relief) in the last tax year (April 6 to April 5), or

  • Are a partner in a business partnership (even a nominated partner will do), or

  • Have untaxed income (like commissions, income from renting out a property, or foreign income), or

  • Want to claim an Income Tax relief, or

  • Are a subcontractor who’s either self-employed, a partner in a trust or partnership, or the owner of a limited company in the UK (in all these cases, you’ll have to register for the Construction Industry Scheme or CIS).

In the case your sole income is from your wages or pension, you won’t need to send a return.

However, keep in mind that if you submit your tax return to HMRC 3 months (or more than 3 months) later than the deadline, you may face a minimum penalty of £100 GBP, along with interest on late payments of your tax bill.

How do I find out my UTR number?

First things first, register for a tax Self Assessment, if you have to send an income tax return. You can either register online, or fill up an application form on the HMRC website, print it out, and post it to HMRC.

Once your registration process is complete, or you’ve formed a private limited company in the UK, HMRC will send you an SA250 “Welcome to self-assessment” letter.

You’ll find your UTR number on the top right of the letter, along with a 12-digit activation code (for non-personal tax accounts). This activation code is necessary for signing in to your online self-assessment account with HMRC for the first time.

In case you don’t receive the activation code, though, or you lose it within 28 days of enrolling for the online service, you can sign in to your online HMRC account and simply ask for a new code.

If you’d already registered for the self-assessment and sent a return online before, your UTR should be on your previous tax returns, payment reminders, return filing notices, and other official documents from HMRC like P45 and P60.

Look out for a 10-digit number under “Tax Reference”, just like the UTR number example we’ve included at the beginning of this article.

How long does it take to get a UTR number? 

HMRC automatically issues a UTR number as soon as you register for Self Assessment or you set up a private limited company.

You’ll get a letter from HMRC with the UTR number within 7-10 working days for UK addresses, but it can take up to 21 working days, too, if you’re based abroad.

How can I get my UTR number online?

After registering for tax self-assessment and creating your online account with HMRC, you can find your UTR number online.

Log in to your HMRC account for viewing your tax returns and UTR. Plus, it has become easier now to check your UTR number online via the official HMRC app.

Is my UTR number on my payslip?

If you’ve got a payslip or PAYE coding notice that HMRC sent you, you should be able to find your UTR number there.

By the way, don’t worry if the payslip is 10 or 20 years old, as the UTR number won’t change, ever.

How much tax do I pay with a UTR number?

Let’s assume that you’re a subcontractor working on a couple of construction projects in the UK. Before your contractor can pay you for the first time, he or she must check whether you’re registered for self-employment as well as for CIS.

If the contractors find your UTR on HMRC’s list of CIS-registered subcontractors, they’ll deduct tax at a flat rate of 20% from your payments and pass it on to HMRC.

But if you haven’t given your UTR yet to your employers, or they can’t find your UTR number on the list of CIS subcontractors, they must deduct 30% tax from your pay instead. So, whether you’re living in the UK or abroad, registering for CIS is a smart idea.

You can even apply for gross payment status at the time of the CIS registration process, if you want contractors to pay you in full, without any tax deductions.

Can I have 2 UTR numbers?

No, you’ll get only 1 UTR number, whether it’s a personal UTR or one for a limited company in the United Kingdom. Even if you own multiple companies, each of those will get 1 company UTR number in the UK.

Is UTR the same as National Insurance (NI) number?

Nope. An NI number is a reference number for the country’s social security system.

You have to apply for an NI number when you’ve just turned 16 and you’re working in the UK, applying for a student loan, or you want to claim tax and other state benefits.

In fact, HMRC asks for your National Insurance number and other personal details when you register for self-assessment to get a UTR.

Can I file a tax return without a UTR number?

Long story short, no. You’re definitely going to need your UTR when you submit a self-assessment tax return for the first time.

What if I’ve lost my UTR number?

If you’ve lost or forgotten your UTR number, you can easily recover it from an HMRC document.

But when you can’t get hold of any such documents either, you can ask for your UTR by calling the Self Assessment helpline on a UTR customer service number given below:

  • 0300 200 3310 (if you’re in the UK)

  • 0300 200 3319 (if you’re in the UK)

  • +44 161 931 9070 (if you’re abroad)

It’s also possible to request Corporation Tax UTR from HMRC, in case you’ve got a private limited company in the UK.

For that, you’ll have to provide HMRC with your registered company name and your company registration number (CRN). HMRC will then send the UTR to the business address you had registered with Companies House.

How to contact HMRC for UTR-related and other queries

Apart from the phone numbers we’ve listed above, you can also get in touch with HMRC via:

  • Online videos and webinars. These are available for queries regarding the self-assessment.

  • Twitter. Start your tweet with the tag @HMRCcustomers for general support (please don’t mention your UTR number or any personal info, as it’s a social platform).

  • Webchat. A “speak to the adviser” link will appear whenever an adviser is available, so click on that link immediately. If you don’t, you’ll have to wait till another adviser gets available.

  • Post. Write to HMRC at this address: Self Assessment, HM Revenue and Customs, BX9 1AS, United Kingdom. You don’t need to include a city name, PO box, or street name here.

What about Unique Transaction Reference numbers?

Unique Taxpayer Reference numbers aren’t the only UTR numbers out there. You may also see the acronym refer to Unique Transaction Reference numbers. While the two numbers share an abbreviation, they are two very different things with very different uses. Unique Transaction Reference numbers are unique codes meant to help banks identify and recognize financial transactions in India. Keep an eye on this space—we’ll discuss these numbers in greater detail in a future blog post!

If you’re paying UK tax while you’re based overseas, you’ll need to make international payments to HMRC. And when you’ve got the Xe money transfer app and website at your service, you can heave a sigh of relief.

International money transfers with Xe are fast, safe, and as easy as ABC.

 

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

 

Recap: Round Table “Payment Challenges in a Post-Covid World” | Toekomst Betalingsverkeer

22-09-2021 | François de Witte | treasuryXL |

On September 9, 2021, the event “Toekomst Betalingsverkeer“ took place in Amsterdam.

Amongst others, the following topics were covered:

  • The Fintech evolution of banking.
  • Platform strategies & developments big tech.
  • Customer experience strategies.
  • Open banking.
  • Instant payments.

I hosted two round table sessions on “Payment Challenges in a Post-Covid” World and we made a deep dive on the following 3 topics:

  • Instant Payments – the new “normal”?
  • Request to Pay: the bridge between customer convenience and reconciliation?
  • Digital currencies for a digital future?

In the present article, I will take a deep dive on the topic “Instant Payments: The New Normal”.

Setting the Scene

Since the creation of the SEPA Instant Credit Transfer (SCT Inst CT) Scheme in November 2017, we have observed a huge increase in the number of instant payments in Europe, as outlined in the statistics of the EPC down below:

We have also observed the same tendency in other countries outside the UE, like e.g., the UK. The Netherlands are clearly forefront runners in Europe.

Reasons for Using Instant Payments

In the diagram down below, you will see an outline of the major use cases for instant payments:

We observe also that increasingly instant payments are challenging the card payments, and this happens for several reasons such as:

  • Party paying the costs: whilst for the credit card and wallet payments, the costs are collected at the merchant side, for instant payments, they are charged at the payer side.
  • Costs: the costs of instant payments are usually way lower than the traditional card or wallet payments, in particular for high-value transactions.
  • Amount of the transaction: traditionally card payments have a limit of up to EUR 5 K, whilst for SCT Inst CT, the limit is put at EUR 100 K.
  • Irrevocability: whilst in the card schemes, clients have the possibility to revoke payments, whilst instant payments are irrevocable.

However, there are still some hurdles to overcome, such as:

  • Card payments are well embedded in the ecosystem and provide real ease of use. This presents good challenges for Fintechs to find smart solutions in this area.
  • Card payments also make contactless payments possible
  • The possibility to process batch payments, although more and more banks are able to do this.
  • Pricing: in some counties, instant payments remain expensive.

European Payment Initiative

EPI is an initiative launched by 31 European banks/credit institutions and two third-party acquirers to create a unified, innovative pan-European payment solution leveraging Instant Payments SEPA Instant Credit Transfer (SCT Inst) and cards. EPI will offer both a card and a digital wallet to consumers and merchants across Europe.

This innovative solution aims to become a new standard in payments for European consumers and merchants, both for retail payments and for payments between individuals “peer-to-peer”.

The aim is to reach out to the whole of Europe. In the first half of 2022, EPI plans to launch the first EPI offerings, based on both the EPI card and the EPI digital wallet. The first set of services will be available at the same time the brand is launched at a European level. These services will be expanded in phases from 2022 until 2024. EPI plans to complete a full deployment of services in 2025 (source: https://www.aciworldwide.com/what-is-the-european-payments-initiative).

EPI does not mean the end of the domestic card schemes. It means the migration of the domestic card volumes into EPI. Maintaining these domestic card schemes doesn’t make sense. It is a transfer of domestic transactions into EPI, which ultimately could result in de-commissioning domestic card schemes. But this is a choice of each national banking community and not of EPI.

The benefits are quite clear:

  • Immediate payment guarantees and high security
  • Capped debit interchange—lower fees
  • A standardized solution accepted across Europe—easier travel and enrolment procedures
  • Parallel development with Central Bank Digital Currencies and an identity scheme—enhanced user experience
  • A consolidation of use cases—increased convenience
  • The compatibility of existing card services with changes to other European payments schemes, such as SCT Inst CT.

The major challenge for EPI and its stakeholders will be convincing consumers (and, by extension, merchants) to get onboard. To acquire and retain a critical mass of users, EPI must have strong user incentives. It needs a compelling business case to convince issuers to migrate from domestic or international brands and acquirers to enable acceptance, the more that right now, all these national card schemes are amortized. This also requires a migration process, breaking user habits.

Conclusion

We see an increasing importance of Instant Payment in Europe, and the EPI initiative will further foster this evolution. However, the EPI might take some time. Good cooperation and interoperability with the domestic schemes will be important to get the required critical mass.

 

François de Witte

 

 

 

 

 

 

Your Last Call | International Treasury Management Virtual Week | September 27 – October 1

22-09-2021 | Eurofinance | treasuryXL |

It’s free, It’s Virtual…

International Treasury Management is the annual meeting place for 1000s of the World’s most senior treasurers to learn and share experiences in valuable peer to peer discussions. With a reputation for ground-breaking sessions and world-class speakers, our 30th anniversary event will explore the boundaries of the profession, take a glimpse into the future of business, treasury and working life as well as offer the practical case studies on the treasurer’s top agenda items.

Only one treasury event can deliver the comprehensive mix of big picture global insight and granular treasury knowledge you need to make the right choices for the future.


Back to the future, again

Over the past 30 years since EuroFinance’s inaugural conference on International Cash and Treasury Management, much has changed. Treasurers have firmly become business partners, technology experts, risk managers and opportunity spotters. They often lead fundamental change within the company as markets, business models and technology shifts.

What next? This event will delve into how treasury operations can gear up for the future, having learned the lessons from the past. Where, who, what and how will the corporate be in the coming years and what is treasury’s role?

Keynote sessions will offer big-picture insight alongside themed streams including:

  • Payments revisited
  • Risks and Rewards
  • Digital strategies
  • Practical solutions to day-to-day Treasury challenges
  • The power of partnership

What makes International Treasury Management the must-attend event of the year?

  • networking on a global scale – a significant rise in attendees in 2020 boosted the value networking with banks, providers and potential clients… all in one place
  • strategic insights and best practices – get solutions to the challenges you face from treasury and economic experts during keynotes, practical case studies, fireside chats, analytical panels and more
  • future trends – delve into the latest innovations and new technology driving change in treasury, and their practical applications
  • live Q&A with world-class treasurers – enjoy borderless networking and live Q&As with high-profile speakers directly after each session
  • cost and time-efficiency – tune in form anywhere in the world, at the click of a button with no long distance travel or accommodation costs
  • continued learning – catch up on any missed sessions and re-watch your highlights, on demand for up 2 months after the event
  • unite your international teams – as a free event, it offers an opportunity for your whole treasury team to attend. Perfect for encouraging learning and development at all levels

September 27th – October 1st | Virtual

Register Now for Free!