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Blockchain and Stable Coins: opening the crypto markets?

| 20-05-2019 | Carlo de Meijer | treasuryXL

In my recent blog about IBM’s Blockchain World Wire I mentioned the use of Stable Coins as settlement instrument for global payment transactions. Not many are familiar with the term Stable Coins, because it is a relatively new type of cryptocurrency.

The Stable Coin market is however hotter than ever. In recent months, Stable Coins have seen remarkable growth in both size and variety. Today, with over 120 projects on the market, there is growing thinking that Stable Coins may trigger the mass adoption of cryptocurrency payments, thereby opening the crypto currency market. Facebook recently came with its WhatsApp Stable Coin. Even a traditional bank like JP Morgan has entered this market, with their own Stable Coin-like product named JPM Coin.

Why is there such a hype in talking about this phenomenon? And what are Stable Coins? How do they work and what should you know about it in terms of use cases, benefits and risks.

Why Stable Coins? 

But first of all: why Stable Coins? The cryptocurrency market such as for Bitcoin, Ether and others suffers from high volatility and unpredictable price fluctuations. They are struggling to maintain a decent valuation against the fiat. Last two years we have seen the market capitalization of the crypto reaching a high of almost 1 trillion USD before bouncing back to less than 200 billion USD. Most of the coins are down 80% from their all-time highs.

This volatile nature is one of greatest criticisms directed towards the crypto market. Because of this high volatility, Bitcoin and most cryptocurrencies are inconvenient for daily transactions. The demand for cryptocurrency is mainly fuelled by speculation and trading. Retail merchants on the other hand are sceptical of accepting the crypto as a medium for financial transactions. 

There is however a growing desire to bring stability to the cryptocurrency market. The  current market sentiment is turning more towards less price-volatile options. It is thus not surprising  that interest in Stable Coins is on the rise.

“Unlike cryptocurrencies such as Bitcoin, which are highly volatile, stable coins provide people with the pragmatic, helpful benefits of a cryptocurrency, without having to worry about distressing price changes since they are grounded in the real world.” Brigitte Luginbühl, CEO of SwissRealCoin

What are Stable Coins? 

A Stable Coin is a cryptocurrency with all its intrinsic functionality, but does not suffer from the vulnerabilities of market fluctuations and price volatilities. They fall into the category of payment tokens, whose main purposes are store of value, medium of exchange, or unit of account. Like other cryptocurrencies, Stable Coins aim to become global, fiat-free money that is programmatically issued and tracked with the use of blockchain technology.

A Stable Coin refers to a class of  cryptocurrencies that is pegged to a tangible, or stable, asset such as fiat money (which is specifically USD) or precious metal (which is generally gold). The idea of backing a cryptocurrency with a tangible asset is to reduce the price volatility associated with standard cryptocurrency. Since the Stable Coin is correlated to the gold or fiat, its valuation is fixed in relation to that underlying asset.

In theory, this makes Stable Coins ideal and usable as a store of value and a basic medium of exchange. They provide cryptocurrency traders and investors with an easy and simple way to keep value without losing to price swings. In doing so, digital coins may become far more practical for everyday use, and it may encourage global adoption.

Models of Stable Coins

To “get rid” of the volatility of the cryptocurrency market, different variations of Stable Coins have been introduced. Thereby a number of alternative types have emerged, backed by a multiplicity of assets, ranging from baskets of cryptocurrencies to physical assets. Most Stable Coins fall into one of the following models: fiat-collateralized, asset-based, crypto-collateralized, or algorithmic.

A. Fiat-collaterised

Fiat-collaterised Stable Coins are the most popular form of Stable Coins. They are fully backed i.e. on a 1:1 ratio by existing fiat currencies in real bank accounts such as the USD that is held in reserve by the Stable Coins’ issuers. The coins represent a claim on the underlying fiat currency.

How do they work?
Stable Coin working is quite simple. They are backed by a company or a central entity. This company or central entity manage the acceptance of new fiat and issues a corresponding amount of the fiat backed tokens. The issuing company holds assets in a bank account or vault (or works with a third party provider that does so on their behalf.  The company or the central entity is the custodian of the fiat reserves, and it backs all the tokens.

A degree of trust in the central entity is created by third-party audits – validating that fiat reserves are kept equal to the token supply. If the holder wishes to redeem cash with his tokens, the company or central entity will wire transfer the fiat money to the holder’s bank account and the equivalent coins will be destroyed or taken out of circulation.

Pros and cons
Stable Coins have a fiat backed structure and their operations and working are simple to understand. Since these are backed by a stable fiat currency, there is not much fluctuation in the prices.

But, these fiat-based Stable Coins are issued by centralized entities with their own governance protocols and, in the case of full custody integration, can be vulnerable  to fraud activities. This is very much against the concept of decentralized crypto. Additionally, not all fiat currencies are stable, as the fiat that underlies them, may not be stable itself.

Examples
Most known examples of fiat money-backed Stable Coins are dollar-based including Tether (USDT), TrueUSD (TUSD), USDCoin (USDC) and Gemini Dollar (GUSD).

 B. Asset-based

Asset-based Stable Coins are backed by some type of commodities. The most common commodity which is collateralized is gold. Gold backed Stable Coin represents a specific value of gold. The physical gold in itself is stored in a trusted third party’s vault.

How do they work?
Asset-based Stable Coins work similarly in cases where the coin is backed by fiat money (see above).

Pros and cons
As these Stable Coins are backed by real assets they provide stability. In a way, the commodity has been tokenized. This brings greater liquidity and price discovery. The coin holder has the advantage of recoursing to the underlying asset. They can redeem these assets at the conversion rate to take possession of the real assets.

Just as in fiat money backed Stable Coins, they are governed by centralised entities. So some of the very concepts of crypto and digital currencies are defeated in this type of stable coin. The holder is dependent on the vendors and custodians. This can result in a single point of failure at some time. This system is also dependent on the audit and assessment by the third party, underscoring the purpose of cryptocurrency.

Examples
Examples of commodity-backed Stable Coins are Digix gold (DGX) and Petro Coin. DGX is dependent on the market value of gold and is fully redeemable at any point in time.  The ownership/custodianship status is tracked on the Ethereum     Blockchain. Petro Coin is a Stable Coin backed by the oil reserves of Venezuela.

C. Crypto-collateralised

Crypto-collateralized Stable Coins are backed by a mix or basket of other digital currencies like Bitcoin or Ether.

How it works
Crypto backed Stable Coins require holders to stake a certain amount of cryptocurrencies into a smart contract which will then result in the creation of a fixed ration of Stable Coins.

In this type of coins, the volatility risk of a single cryptocurrency is reduced and distributed in a group of cryptocurrencies. The Stable Coins are over-collateralized to withstand the extreme price fluctuations.

Pros and cons
The benefit of this method is that it is decentralized and as a result adhere to the trustless, transparency and secure structure of the crypto world. Therefore they are not vulnerable to a central point of failure.

Crypto backed coins are considered transparent because transactions are recorded on the public blockchain with full transparency and accountability. They are efficient in the sense that conversion from one crypto to another is quick as it occurs on the blockchain.

On the other hand they are volatile and complex. Since the underlying asset is a cryptocurrency itself, it is inherently much more volatile as compared to other types of Stable Coins. Also, there are multiple complex elements which can trouble the minting process of these stable coins.

Examples
The most prominent example of crypto backed Stable Coins is Dai. DAI does not rely on any central entity and lives on the blockchain. Its  face value is pegged to the USD. It achieves stability by using an autonomous system of smart contracts.

 D. Algorithmic (or Seignorage) Stable Coins

The most complex and less popular model are algorithmic Stable Coins. These Coins are not backed by collateral at all. Instead, they use various mechanisms to expand or contract their circulating supply as necessary to maintain a stable value.

Algorithmic Stable Coins are based on smart contracts (and other mathematical -based algorithms) where people put up collateral in a cryptocurrency (like Ethereum). This to back the value of a Stable Coin pegged to a fiat currency. With this method, there is no need for know your customer (KYC) measures to be put in place because there is no need for a counterparty to maintain reserves or redeem money from.

How it works
These types of Stable Coins maintain stability using an algorithm. This means that the Stable Coins are not actually backed by real-world assets. Instead, trust in the system is reliant on the expectation that the coins will gain a certain amount of future value (similar to Bitcoin).

These models are generally created with two tokens: the first is a Stable Coin, and the second is related to a bond, thus promising income if the Stable Coin rises in price. By purchasing the bond with the Stable Coin, supply is decreased. As the total demand for the coin increases, a new supply of stable coins are created to reduce price back to stable levels. The main objective is to keep the coin’s price as close as possible to USD 1.

Pros and cons
The advantages of these type of Stable Coin are that they are decentralized, they have an absence of collaterals and lastly, they are kept at stable prices.

On the other hand, these are the most innovative of Stable Coins but also the most complex and thus difficult to create these successfully.

Examples
Basis (formerly known as Basecoin) is an example of this type of Stable Coins. Basis is pegged to the value of USD through algorithmic adjustments of the coin supply. Prices are monitored using the Oracle system.

Use cases for Stable Coins

Stable Coins promise many of the same benefits as other cryptocurrencies – like cheap transactions and rapid settlement – without the price volatility typically found in the crypto markets. Through that combination, Stable Coins could satisfy the demand for high-quality fiat currencies in parts of the world with limited access to the global financial system.

Various use cases have been proposed for Stable Coins, including mobile app payments, alternative currencies in emerging markets and global payment systems. Currently, the most common use of Stable Coins is for crypto traders to move between investment positions seamlessly and create leveraged positions, without added volatility.

Stable Coins also could be useful for crypto exchanges that want to offer fiat-based trading pairs while reducing their engagement with legacy financial institutions. Another interesting use case, is one of coupon and dividend payments in the up and coming digital securities space. This may enable to receive coupon payments in real time via a Stable Coin directly into a smartphone’s digital wallet.

Benefits of Stable Coins

Just like any other cryptocurrency, Stable Coins may offer both benefits and risks  connected to each alternative governance and price-stability models. The main goal that Stable Coins strive to create is an optimal currency in terms of  price stability, scalability, privacy, decentralization and redeem ability.

Unlike Bitcoin or other cryptocurrencies, Stable Coins are more immune to price fluctuations because they are pegged to tangible and more stable assets, like the US dollar (USD).

“An optimal cryptocurrency should have the following four traits: price stability, scalability, privacy, and decentralization.” “Short-term stability is important for transactions and long-term stability is important for holding.” Forbes

“Stable coins are one of the keys to bringing the benefits of cryptocurrencies to everyday people, both in terms of price stability and decentralization of capital.” Rafael Cosman, founder and CEO of TrustToken,

These benefits give it a better chance of mass adoption, compared to existing crypto currencies. This will be especially relevant for people living in countries with unstable monetary systems, where residents are often exposed to hyper inflation and uncertainty.

Stable Coins development could also be of help for the general population in economic and/or political uncertain countries. If the fiat money is converted into Stable Coins it will ensure that the value of money is preserved.

The adoption of Stable Coins may also  support capital market formation and can be used in new applications for decentralised finance on the blockchain. These include lending and derivatives markets because without borders and volatility, it becomes easier to lend money.

Traders and investors can change between cryptocurrencies, without being exposed to  asset volatility. Stable Coins enable traders to keep value stable against a fiat currency, usually the dollar, while they’re in-between trades.

Finally Stable Coins may help in reducing the risk of high price movements. They can be used in the cryptocurrency market as a hedge against bitcoin and other top cryptocurrencies.

 Main risks of using Stable Coins

There are however a number of bottlenecks that could limit the adoption of Stable Coins. First of all, there is the counter-party risk. By trusting a third-party keeping a cryptocurrency stable, the dollars or other fiat currencies could be fractionally reserved instead of fully backed. In this case, a bank run could cause the price of the coin to drop dramatically.

There is also the centralisation risk. Centralisation risks mean the same monetary issues that fiat-currencies face when a central authority has the power to print money without oversight. Accounts can be subject of misappropriation, being blocked, or accessed by unauthorised third parties.

In the case of algorithmic based Stable Coins there is the risk of algorithm manipulations. As most decentralised Stable Coins are embedded  within smart contracts, there is a risk the algorithm which keeps the currency stable fails. Algorithms could even be manipulated by a third-party.

Stable Coins and Regulation

Thus far, Stable Coins have largely been got attention from regulatory agencies. There hasn’t been much discussion in the crypto industry about how U.S. securities and commodities laws might apply to Stable Coins. But also in Europe Stable Coins has got less scrutiny from a regulatory point-of-view up till no. But that may change.

As Stable Coins are seeing greater industry adoption, the US SEC and CFTC will likely take a harder look at their compliance status. But the main question is: how will those Stable Coins be characterised?

Given how dollar-backed Stable Coins are redeemed, the SEC might characterize them as “demand notes,” which are traditionally defined as two-party negotiable instruments obligating a debtor to pay the noteholder at any time upon request. Demand notes are presumed to be securities.

For its part, the CFTC might take the position that Stable Coins are “swaps” under Commodity Exchange Act Section. Under that definition, the CFTC might characterize Stable Coins as options for the purchase of, or based on the value of, fiat currencies.

If Stable Coins are classified as regulated securities or swaps, there could be serious consequences for a large segment of the crypto industry. For example, Stable Coin issuers might have to register their offerings and comply with all the ensuing regulatory requirements. Similarly, a company or fund that conducts or facilitates Stable Coin transactions might have to register as a broker-dealer.

The SEC and CFTC aren’t the only regulators that may take an interest in Stable Coins. Only time will tell how other regulators worldwide will approach the regulation of Stable Coins, particularly if they’re used to avoid trade sanctions or other transaction reporting obligations.

 Asia ripe for Stable Coins

Stable Coins are looking to become a more attractive crypto solution, particularly in the Asia  Region. And that for various reasons.

According to a recent report by Remitscope, more than 50 percent of remittance flows worldwide could be attributed to countries from the Asia Region. Current traditional money transfers however are far from instantaneous or frictionless and often result in the end customer paying unnecessary transaction costs.

With interest growing, a Stable Coin with a well-developed user experience built into the remittance solution would greatly appeal to these markets. In Asia’s emerging markets, the technology’s application in the remittance sector is especially promising. Stable Coins via blockchain technology can improve the speed and stability of these transfers—particularly in countries where financial infrastructure is still in development.

Asian countries are well placed to adopt Stable Coins. It is encouraging that cryptocurrency ATM usage has grown and more cryptocurrency ATMs means improved access to Stable Coins, which will only help the ecosystem mature and evolve for the better.

It is also very likely that we will see more non-USD Stable Coins being tailor-made for Asia. The emergence of more non-USD Stable Coins will signal that the market is maturing further and ready for the benefits of Stable Coins globally.

The regulatory environment, without overt regulatory guidance in jurisdictions,  in the Asia Region is particularly favourable to encourage such innovation.

 What is needed to drive adoption?

To drive Stable Coin adoption, further development is needed in both cryptocurrency exchanges and various cryptocurrency services.

First, making it easy to digitally deposit and withdraw fiat currencies into and out of exchanges remains a huge hurdle to widespread adoption of cryptocurrency as the process is slow and transactions can take a long time or, if they are fast, involve expensive fees.

There is also still a need to solve issues surrounding settlement and velocity in fiat deposits and withdrawals into exchanges. Top exchanges generally take weeks to process transactions and this often leads to increased customer service tickets.

Another issue is the margins on cash to cryptocurrency exchanges. These are very high, sitting at 7-10 percent globally. Not only is it expensive to transact and exchange cryptocurrencies on exchanges, but it is also less convenient when needing to withdraw cash. That is why there is a premium on cryptocurrency ATMs.

Cross-border payments and converting cryptocurrency to cash should be made more convenient for users across the world. Stable Coins could reduce friction when sending money between counterparties as its often quicker, cheaper, and far more convenient.

To improve the user experience, money transfer companies should be encouraged to start integrating cash to crypto features in their respective locations. Overall, consumers will benefit the most from this increase in competition with more options in providers and more locations to conduct their exchanges locally.

In the long term, with more Stable Coins from various other currencies being made available, exchanges could become more liquid, enabling greater efficiency in the crypto ecosystem. Risks for companies dealing with cryptocurrency to fiat gateways will also be reduced as they no longer need to worry about banking relationships and can instead just focus on maintaining a cryptocurrency wallet.

Forward Looking

Stable Coins may have a great potential. The total addressable market for Stable Coins is essentially all of the money in the world, or approximately $90 trillion. Stable Coins are a crucial element in the world of cryptocurrencies, as they can bring stability. They may pave the way for wider acceptance and real potential for global adoption..

The technology is however still relatively young and will continually evolve, but it is clear that demand is there. Before full adoption is reached, Stable Coin developers will need to address the various concerns still in the market. The key is to create the optimal cryptocurrency including features such as price stability, decentralization, scalability, and privacy.

“Stable coins will ultimately give people enough confidence to start using cryptocurrencies for daily transactions.” “Stable coins are trying to strike the balance of not being dependent on a central bank, while also securing price stability”. Brigitte Luginbühl, CEO of SwissRealCoin

Ultimately, decentralised Stable Coins may pave the way for a new and modern  financial infrastructure  that will remove inefficiencies, reduce risk stemming from centralised parties and change the way we transact.

For Stable Coins to be accepted as a viable alternative to fiat currencies, however, they must first intersect and integrate into our current financial infrastructure.

 

 

Carlo de Meijer

Economist and researcher

 

Corda Settler, Ripple and SWIFT: mariage à trois?

| 07-05-2019 | Carlo de Meijer | treasuryXL

My last blog was about the IBM World Wire, a blockchain based platform for global payments. Another competitor in the blockchain payments world I have written about regularly is Ripple. Both are thereby targeting centralised payments messages network SWIFT.

IBM and Ripple however are not the only players in the blockchain payments world. Late last year R3 launched its new Corda Settler platform using Ripple’s XRP. But here it comes. In January SWIFT announced a partnership with R3 were they are collaborating to test Corda Settler, specifically to “integrate gpi with Corda Settler.” However, as Corda Settler depends on the XRP token, the partnership puts SWIFT and Ripple, the two rivals in an indirect connection. Will that result in a love triangle or even a “marriage a trois”? And could that work?

But first: What is Corda Settler?

In December last year, R3 announced the launch of Corda Settler. Corda Settler is designed in such a way to give companies a new fast, secure and reliable way to move crypto and traditional assets on a distributed ledger. The Corda Settler app is an open-source decentralized application (DApp), that runs on the Corda blockchain. It is aimed to facilitate global (crypto) payments across enterprise blockchain networks with Ripple’s XRP as its base currency. Corda Settler thereby focuses on the settlement of payments transactions between crypto and traditional assets within enterprise blockchains.

Corda Settler uses XRP

Both Corda and Ripple are open-source blockchain platforms with a focus on serving enterprise businesses. Therefore, it makes sense that Corda selected XRP, the globally recognized cryptocurrency, as the first and only supported cryptocurrency for settlement on the platform.

“The deployment of the Corda Settler and its support for XRP as the first settlement mechanism is an important step in showing how the powerful ecosystems cultivated by two of the world’s most influential crypto and blockchain communities can work together.” “While the Settler will be open to all forms of crypto and traditional assets, this demonstration with XRP is the next logical step in showing how widespread acceptance and use of digital assets to transfer value and make payments can be achieved.” Richard Gendal Brown, CTO at R3

While Ripple’s XRP is the first cryptocurrency supported by the Corda Settler, in the future it is very likely that R3 will make settlement in other cryptocurrencies possible.

“The Corda Settler is agnostic to which payment method is used. Whether it’s JP Morgan coin, or Wells Fargo coin, or BAML coin, or HSBC coin, it doesn’t matter to us. We have no horse in that race.” “We don’t have any financial incentives one way or another. We’re just trying to get as many people onto our platform as possible.”David Rutter, CEO of R3

How does Corda Settler work?

The platform is still in its first stages of development. Corda Settler supports payments of all sorts to be settled through “any parallel rail supporting cryptocurrencies or other crypto assets”. Also any traditional rail capable of providing cryptographic proof of settlement can settle payments obligations. In the next phase of development, the Settler will also support domestic deferred net settlement and real-time gross settlement payments.

In its current phase, when a payment obligation arises on the Corda blockchain during the course of business, any of the parties involved now have the option to request settlement using XRP. The other party can be notified that settlement in XRP has been requested and that they must instruct a payment to the required address before the specified deadline presented to them.

After they make the payment, an oracle service will ensure the validity of the payment and settle the obligation. Uniquely, the Corda Settler will verify that the beneficiary’s account was credited with the expected payment, automatically updating the Corda ledger.

What does Corda Settler mean for the parties involved?

It is clear that in the transaction initiated by Corda Settler, the receiving party doesn’t need to use Corda to receive the payment. At the same time, it is not mandatory for the sending party to use XRP or any other cryptocurrency.

This means that using the Corda Settler; one can send XRP or dollar and the receiver can accept the payment in an entirely different currency. “Settlement Oracle” will broadcast the actual settlement notification. It can be operated through different entities like exchanges, banks, and others.

It will thus allow banks and other financial institutions to build their blockchain networks with minimum overheads. They don’t need to integrate the R3 technology fully. All they need is to let their clients receive deposits via Corda-enabled services.

SWIFT partnership with Corda

End January SWIFT has announced its partnership with R3’s Corda Settler to launch a proof-of-concept (PoC). The trial would see the interaction of SWIFT’s payments standard framework GPI (Global Payments Innovation) with R3’s trade finance platform.

“Following the recent launch of our Corda Settler, allowing for the payment of obligations raised on the Corda platform, it was a logical extension to plug into SWIFT gpi. SWIFT gpi has rapidly become the new standard to settle payments right across the world. All the blockchain applications running on Corda will thus benefit from the fast, secure and transparent settlement provided through the SWIFT gpi banks.” David E. Rutter, CEO of R3

Global Payments Innovation (GPI)

This trial will integrate SWIFT’s GPI Link cross border payments gateway with R3’s Corda Settler platform to enable the continuous monitoring and control of payment flows, settle GPI payments through their bank, and receive credit information.

SWIFT’s GPI is a messaging system based on existing messaging standards and bank payment processing systems. It has rapidly become the new standard to settle payments right across the world. The integration will also support application programming interfaces (APIs), as well as SWIFT and ISO standards to ensure global integration and interoperability.

It aims to provide quick and cost-effective transfers between SWIFT members. Through GPI “SWIFT hopes to assist banks enhance their relevance within the fast-evolving international payments ecosystem – by delivering immediate value to SWIFT’s members’ customers”.

Goal of the SWIFT-Corda Settler PoC

The objective of the PoC-trial is to try out interlinking of trade and e-commerce platforms with GPI – SWIFT’s new standard for cross-border payments and is an extension of other SWIFT trials with blockchaintechnology. These platforms need global, fast, secure and transparent settlement, preferably using fiat currencies.

“With the gpi Link, banks will be able to provide rapid, transparent settlement services to e-commerce and trading platforms, opening up whole new ecosystems to the speed, security, ubiquity and transparency of gpi and enabling them to grow and prosper in the new digital economy. Given the adoption of the Corda platform by trade ecosystems, it was a natural choice to run this proof of concept with R3.” Luc Meurant, SWIFT’s Chief Marketing Officer

“SWIFT GPI will integrate directly to Corda Settler, the application that allows participants on the Corda blockchain to initiate and settle payment obligations via both traditional and blockchain-based rails. This will enable obligations created or represented on Corda to be settled via the large and growing SWIFT GPI network”.R3 co-founder Todd McDonald

While SWIFT is keen to experiment with the possibilities opened up by blockchain-based trades, they are much less enthusiastic about using cryptocurrencies such as XRP.

Objective

The SWIFT and R3 Corda Settler trial will enable corporates to authorise payments from their banks via a GPI link to their bank through the Corda Settler platform. GPI payments will be settled by the corporates’ banks, and the resulting credit confirmations will be reported back to the respective trade platforms via GPI Link on completion.

By enabling trade platform ecosystems using Corda to integrate ‘GPI Link’ into their trade environments, SWIFT hopes to extend its reach beyond member banks to include to a wider range of corporates and markets.

The first stage of the PoC will work with R3’s Corda blockchain platform, Corda. SWIFT says it will not limit ‘GPI Link’ to R3’s DLT-based trade environment. SWIFT has plans, if the Corda PoC is successful, to extend the trial to other DLT, non-DLT and e-commerce trade platforms. The results of the PoC will be demonstrated – as a prototype – at Sibos in London in September 2019.

Corda Settler: Fiat currencies versus XRP

Swift said it is not (yet) using XRP on Corda Settler!. And that for a number of reasons.

“All trade platforms require tight linkages with trusted, fast and secure cross-border payments mechanisms such as GPI. While DLT-enabled trade is taking off, there is still little appetite for settlement in cryptocurrencies and a pressing need for fast and safe settlement in fiat currencies”. Luc Meurant, SWIFT’s chief marketing officer

According to SWIFT CEO Leibbrandt banks simply are not prepared to use a cryptocurrency as a clearing unit due to its price volatility. It appears that most banks prefer to use Corda’s technology for rapid and transparent settlement services in fiat currency rather than cryptocurrencies. Most enterprises prefer to settle via traditional payment mechanisms, albeit wishing for greater visibility into what is happening to payments and receipts. This leads to the need for trade platforms to have fast and safe settlement in fiat currencies.

“I think that the big part of Ripple’s value proposition is the cryptocurrency XRP. There we do find the banks are hesitant to convert things into a cryptocurrency right now because of the volatility in the currencies.” Leibbrandt, SWIFT CEO

Another reason why SWIFT is hesitant (not willing) to use crypto currencies is because the legal status of XRP and other cryptocurrencies remains unclear due to the current uncertain regulatory environment. Risk averse financial institutions are unlikely to adopt cryptocurrencies until regulations become clearer.

Ripple’s CEO Garlinghouse however argues back that “with SWIFT payments taking days and XRP payments clearing within seconds, SWIFT transfers are actually subject to much greater volatility due to fluctuating foreign currency rates”. At present, the banks take on that volatility risk by guaranteeing the amount sent will match the amount received. Because of XRP’s speed, which executes transactions in a matter of seconds, Ripple says it ‘eclipses’ volatility risk. With near-instant XRP-backed transfers, that volatility risk is actually completed eliminated.

“I hear people talk about volatility and I feel like they’re propagating this misinformation. Mathematically, there’s less volatility risk in an XRP transaction than there is in a fiat transaction.” Garlinghouse, Ripple CEO

Garlinghouse countered SWIFT’s legal arguments saying that every XRP transaction is vetted for Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance. Finally, Garlinghouse added that XRP payments greatly reduce systemic risks to banks in smaller economies, which have to use large amounts of money to prefund international transfers.

Mariage à trois?

With the launch of a universal settler app for payments on the Corda blockchain platform, using XRP as its first crypto payment trail, this may bring the Corda and XRP ecosystems into closer alignment.

Now SWIFT has partnered with blockchain consortium R3, we are in the strange position wherein SWIFT will be possibly be trailing Ripple XRP-powered payments. Through its experimental integration with R3, SWIFT may be indirectly integrating with XRP, though Leibbrandt has no desire to work with XRP directly.

It is still to be seen whether SWIFT will move beyond the proof of concept stage. But that might change. The future of SWIFT and Ripple’s relationship will not lay in the hands of present CEO Leibbrandt, as he will be stepping down as SWIFT CEO in June. His successor may be more receptive for the new world.

It is still speculative  that the proof of concept — or a future trial — could see SWIFT being more interested in cryptocurrency settlement. On the other hand Ripple will do its utmost by leveraging its relationship with R3 to convince (SWIFT-related) banks to take the dive into cryptocurrency via the Corda Settler platform.

For now, the complex links between SWIFT, Ripple, and R3 are sure to trigger continued debate about the future of global finance.

Read the full article here

 

 

Carlo de Meijer

Economist and researcher

 

Congres toekomst van het betalingsverkeer

| 25-3-2019 | Euroforum | treasuryXL |

Het jaarcongres Toekomst van het Betalingsverkeer is al 20 jaar dé ontmoetingsplaats voor alle Payment Professionals in Nederland. Om deze mijlpaal te vieren wordt het programma dit jaar nog uitgebreider dan voorheen.

Op verschillende podia vertellen (inter) nationale Keynote Speakers de meest interessante verhalen. Daarnaast bestaat het programma uit diverse co-creatie sessies en round tables waar de meest prangende vraagstukken van dit moment worden besproken. Bij dit proces is uiteraard de Adviesraad weer nauw betrokken.

What’s Going on in Payments?

Wat kunt u op 18 april verwachten?

> Circa 300 Payment experts van strategisch niveau aanwezig om u netwerk te vergroten.
> Meer dan 10 C-Level speeches delen hun visie op: Digitale Transformatie van Banken, Succesvol samenwerken met Fintechs, de NextGen Klant, Nieuwe business modellen door PSD2,
Impact van Blockchain en Artificial Intelligence.
> Meer dan 15 Round Table Sessions over EID, PSD2 Update, Instant Payments, Cybersecurity, Crypto Currencies, Data driven business modellen.
> Gepresenteerd door de payments experts in Nederland vanuit Betaalinstellingen, de nieuwkomers, banken, PSP’s, frontrunning consultancys.
> Interactieve werkvormen zoals dit jaar ‘Battle of the Finance’ en ruim de gelegenheid om te netwerken.

Voor meer informatie over het volledige programma, de sprekers en de locatie kunt u de website van het event bezoeken.

The purpose of payment transfers

| 13-11-2018 | François de Witte | TreasuryXL |

1. Purpose of payments

The payment is the act of paying money to someone or of being paid. Payment transactions (payables, disbursements) can traditionally be split along the way the way the money is transmitted. The most important transmission means are:

  • The physical cash
  • The bank transfer and its variances
  • The card payments.

We have also observed in the last years new payment forms coming up, such as the telecom payments, the mobile payments, e-wallets and the cryptocurrency payments,

Bank transfers (and its variances) can traditionally be split in:

  • Domestic transfers: payments within a country, with the currency of the country
  • Cross-border transfers: payments outside the country or using a foreign currency

In this first article on payments, we will focus on the domestic bank transfers, including the current types payments, their advantages and the attention points, and some other concepts.

2. Domestic Transfers

2.1. Bank or Credit Transfer:

If A needs to pay money to B, then he will send a payment order to his bank (ordering bank), who will in turn debits the account of company A and sends the payment order to bank of the beneficiary (B’s Bank) through the clearing, asking to B’s bank to credit the beneficiary’s account.

The following drawing illustrates the flows:

2.2 Clearing:

Clearing is the system, by which an organization (the clearing house) acts as an intermediary in a transaction, to process reconcile orders between paying and receiving parties. Clearing houses provides smoother and more efficient payment markets as parties can make transfers to the clearing house rather than to each individual party with to whom they pay or from which they receive payments.

Within payments we have the difference between the gross and the net settlement:

  • Net settlement (also known under the name ACH – Automated Clearing House): This is the traditional Approach, whereby the amounts to be paid and received are netted. After agreed upon clearing cycles, the clearing house will pay a net amount to each of the participants, offsetting incoming and outgoing payments. The advantage of this clearing is that it is processed in batch payments and is less expensive. The drawback is that the finality of the payment is only at end of “clearing period”, and that it creates intra-day exposures.
    Examples: UK cheque clearing, BACS, ACH in USA, EBA Step 2 and STET for SEPA payments
  • Gross settlement (also known under the name RTGS – Real Time Gross Settlement): Each payment settles singly and bilaterally across accounts at the settlement bank, usually the central bank. The advantage of this method is that it is more rapid and eliminates settlement risk. However, it is more expensive than the ACH clearing, and hence will be used more for high value and treasury payments.
    Examples: Fedwire in the USA, CHATS in Hong Kong, TARGET in Europe, CHAPS in the UK, DEBES in Denmark, RIX in Sweden and SIX in Switzerland

 Illustration of the RTGS system:

 

2.3 Standing order (also called “recurrent payment”):

This a preauthorised payment under which an account holder instructs his bank to pay on a regular basis a fixed amount from his account to a defined beneficiary. Standing orders are used typically for recurring, fixed-amount expenses (e.g. rental payments, loan or mortgage instalments). They are cancellable at the accountholder’s request.

2.4 Direct debit: Direct Debit:

This is another type of preauthorised payment under which an account holder authorizes his bank to accept debit instructions on his account towards a defined account of a defined creditor. A direct debit is based upon a mandate which is held either by the bank of the debtor or by the creditor. Circumstances in which the funds are drawn as well as dates and amounts are agreed upon between the payee and payer.

This type of payments is typically used for recurrent payments with fluctuating amounts, such as utilities, phone, insurance, credit cards, etc. The payer can cancel the authorization for a direct debit at any time. In addition, several legislations foresee refund periods, enabling the account holder to ask a refund of the amount debited from his account (in the EU for authorized direct debits 8 weeks and for unauthorized direct debits 13 months).

2.5 Urgent versus non urgent-payments:

Most payments are processed as “non-urgent”, enabling the instructing bank to process the payment in batches through the ACH clearing and to take some float. However, for time critical payments, the instructing party can as to his bank to treat the payment order as “urgent”. Urgent payments are usually cleared through the RTGS clearing. If the ordering party respects the cut-off time of his bank (see down below), for domestic payments, the beneficiary is credited the same day with no float. Banks usually charge a higher payment commission for urgent payments.

2.6 Instant credit transfers:

Are a variance of the urgent bank transfer, whereby the money is made available within seconds on the account of the recipient, 24 hours a day, 365 days a year. In some countries, this is already possible.

Example: SEPA Credit Transfer Instant, Faster Payments Service in the UK, The RTP system which will be launched early 2019 in the US.

3. Some other concepts:

Settlement date is the date on which funds become unavailable for the paying party,  or available to the beneficiary party.

Value dating: applying a certain value date on a transaction:

  • Forward value dating (of Future dating): is the value dating at a moment which occurs after the date that the bank is notified of the transaction
  • Back value dating: is value dating which is retroactive, i.e. prior to the moment of the effective transaction.

Float: the “Bank Float” is the time that elapses between the moment that the funds are unavailable funds for the payer and the moment that the funds available to the beneficiary.

Cut-off time for payments: the point in time before which electronic payments, such as a RTGS or ACH payment, must be submitted to a processing bank for entry into the interbank clearing system. If the payment order is submitted thereafter, it will be executed the next day. The cut-off time is a function of the cut-off time of the clearing system and of the processing time of the ordering bank. In Europe, most banks foresee cut-off times around 15 p.m. for processing ACH or RTGS orders.

4. Some statistics and concluding remarks:

Each year, Cap Gemini and BNP Paribas publish a survey with interesting statistics about payment methods in the world. In their 2018 survey they point out that whilst credit transfers and direct debits remains important in Europe (46 % of the non-cash payment volumes), we see that card payments are becoming more and more important (50 % of the non-cash payment volumes in 2016).

Source: Cap Gemini and BNP World Payments Report 2018

In my next contribution I will go more in detail in the card payments and on cross border payments.

 

François de Witte

Founder & Senior Consultant at FDW Consult

Managing Director and CFO at SafeTrade Holding S.A.

Best read articles of all time: Do treasurers really need instant payments? some implications.

| 03-08-2018 | Patrick Kunz | treasuryXL

 

 

Per 13 January 2018 we have a new payments service directive (nr. 2) live in the European union, PSD2 for short. One part of PSD2 is the possibility for banks to offer instant payments between banks in the EU. Within max 10 seconds money flows from one bank to the other, also on weekends and on holidays. In this paper I want to discuss the implications for treasurers of instant payments.

Cash flow forecasting

Forecasting is an important part of the daily/weekly routine of a treasurer. He/she needs to predict the future to know his cash/risk/financing position. On the ultra-short term spectrum of this forecast a treasurer might use intraday bank statement (MT942) to take into account the incoming funds during the day. These are often updated hourly. With instant payments a treasurer can have a look at their bank account and the balance that is showing is the real-time balance with all incoming transactions being settled. As said before a treasurer might already have intraday statements but there is (1) a time lag in those and (2) there might be transactions not processed yet. Bottom line this difference amounts to several hours lag. Depending on the size of the company and the amount and size of transactions there is some impact but not very sizeable. Furthermore, those treasurers that do not use intraday balances for their forecasting have no impact of instant payments. However, how about the due payments on non-working days? In the future these are normal payments dates. Previously due payments on weekends are either set on Friday or Monday depending on the terms of the contract. These could now be forecasted on the exact day. But that depends, payments are often done during business hours, so it is possible that nothing changes. Depending on the size of the transactions there is importance to check this with your suppliers and clients. This also depends on bank processing of yourself and your client/supplier.

Bank processing

Instant means instant in time but also in days. In the past we were dependent on the opening hours of the banks and later of the ECB. That could mean that if we send money just after close on Friday and there was a public holiday on Monday we would only see the money coming in on Tuesday. The money was “lost in translation” in between. This is not very modern in an age where we send an email from Tokyo to South Africa in minutes but not money. We could literally fly there with cash and be faster. After all banks have implemented PSD2 money flows 24/7. So also in the weekend and on holidays. This has an impact on the processing of your bank statement. You now receive bank statement for Saturday and Sunday. Most accounting/treasury departments do not work on the weekends so there is a chance that these statements are not processed. This means you must process 3 statements on Monday. Some companies have automatic processing of bank statements, so the weekend statements might be processed but not (automatically) consolidated leading to more open positions on Monday. Ok big deal, there is more work to do on Monday due to more bank statements. But there is more: not necessarily for treasury departments. Think about customer services (helpdesk) departments. If a client with an overdue payment calls it would be great if the helpdesk employee is able to verify statements of the customers if the says he has paid or will pay immediately. This however only works if processing is automatic or if the helpdesk employee can access/search the incoming payments on the bank account (which might not have processed in accounting). Not all companies will have this yet. Overdue calculations might be faulty in some ERP systems as only working days are considered. If a payment is due on Sunday, you can pay on this Sunday and not necessarily on the Friday before.

Conclusion

Instant payments are only a fraction of PSD2 which is often not very interesting for most treasurers. They get some information faster but that does not really help them too much. There is however more to it. Since payments can now arrive and be made in the weekends the cash flow forecasting should now contain 7 days in a week instead of 5. Payment can be spread out more but also receipts will be. Bank processing is more work; 7 daily statements per bank account per week instead of 5. Extra processing or extra automation needed. The extra information might be needed by other departments too even though the treasury/accounting department is not working.

Overall the implications could be bigger then you might think and are different for every company and depending on their existing (bank) processing.
Most bank are planning to introduce weekend reporting by H2 2018 while instant payments are due beginning 2019. For business transactions this might even take until H2 2019.

Some time left but a good time to already think about your current processes in comparison to the new reality under psd2. Treasury is moving to a 24/7 information economy. It’s about time.Time will tell if there will be fintech’s stepping in helping with above issues with direct connections to the bank, which is another important part of PSD2 but not within the scope of this article.

If you need help with automating your bank statement processing or with your cash flow forecasting, then look at this author and other Flex Treasurers on this website for answers.

Patrick Kunz

Treasury, Finance & Risk Consultant/ Owner Pecunia Treasury & Finance BV

 

 

Do treasurers really need instant payments? some implications.

| 30-01-2018 | Patrick Kunz |

 

Per 13 January 2018 we have a new payments service directive (nr. 2) live in the European union, PSD2 for short. One part of PSD2 is the possibility for banks to offer instant payments between banks in the EU. Within max 10 seconds money flows from one bank to the other, also on weekends and on holidays. In this paper I want to discuss the implications for treasurers of instant payments.

Cash flow forecasting

Forecasting is an important part of the daily/weekly routine of a treasurer. He/she needs to predict the future to know his cash/risk/financing position. On the ultra-short term spectrum of this forecast a treasurer might use intraday bank statement (MT942) to take into account the incoming funds during the day. These are often updated hourly. With instant payments a treasurer can have a look at their bank account and the balance that is showing is the real-time balance with all incoming transactions being settled. As said before a treasurer might already have intraday statements but there is (1) a time lag in those and (2) there might be transactions not processed yet. Bottom line this difference amounts to several hours lag. Depending on the size of the company and the amount and size of transactions there is some impact but not very sizeable. Furthermore, those treasurers that do not use intraday balances for their forecasting have no impact of instant payments. However, how about the due payments on non-working days? In the future these are normal payments dates. Previously due payments on weekends are either set on Friday or Monday depending on the terms of the contract. These could now be forecasted on the exact day. But that depends, payments are often done during business hours, so it is possible that nothing changes. Depending on the size of the transactions there is importance to check this with your suppliers and clients. This also depends on bank processing of yourself and your client/supplier.

Bank processing

Instant means instant in time but also in days. In the past we were dependent on the opening hours of the banks and later of the ECB. That could mean that if we send money just after close on Friday and there was a public holiday on Monday we would only see the money coming in on Tuesday. The money was “lost in translation” in between. This is not very modern in an age where we send an email from Tokyo to South Africa in minutes but not money. We could literally fly there with cash and be faster. After all banks have implemented PSD2 money flows 24/7. So also in the weekend and on holidays.
This has an impact on the processing of your bank statement. You now receive bank statement for Saturday and Sunday. Most accounting/treasury departments do not work on the weekends so there is a chance that these statements are not processed. This means you must process 3 statements on Monday. Some companies have automatic processing of bank statements, so the weekend statements might be processed but not (automatically) consolidated leading to more open positions on Monday.
Ok big deal, there is more work to do on Monday due to more bank statements. But there is more: not necessarily for treasury departments. Think about customer services (helpdesk) departments. If a client with an overdue payment calls it would be great if the helpdesk employee is able to verify statements of the customers if the says he has paid or will pay immediately. This however only works if processing is automatic or if the helpdesk employee can access/search the incoming payments on the bank account (which might not have processed in accounting). Not all companies will have this yet.
Overdue calculations might be faulty in some ERP systems as only working days are considered. If a payment is due on Sunday, you can pay on this Sunday and not necessarily on the Friday before.

Conclusion

Instant payments are only a fraction of PSD2 which is often not very interesting for most treasurers. They get some information faster but that does not really help them too much. There is however more to it. Since payments can now arrive and be made in the weekends the cash flow forecasting should now contain 7 days in a week instead of 5. Payment can be spread out more but also receipts will be. Bank processing is more work; 7 daily statements per bank account per week instead of 5. Extra processing or extra automation needed. The extra information might be needed by other departments too even though the treasury/accounting department is not working.
Overall the implications could be bigger then you might think and are different for every company and depending on their existing (bank) processing.
Most bank are planning to introduce weekend reporting by H2 2018 while instant payments are due beginning 2019. For business transactions this might even take until H2 2019.
Some time left but a good time to already think about your current processes in comparison to the new reality under psd2. Treasury is moving to a 24/7 information economy. It’s about time.
Time will tell if there will be fintech’s stepping in helping with above issues with direct connections to the bank, which is another important part of PSD2 but not within the scope of this article.

If you need help with automating your bank statement processing or with your cash flow forecasting, then look at this author and other Flex Treasurers on this website for answers.

Patrick Kunz 

Treasury, Finance & Risk Consultant/ Owner Pecunia Treasury & Finance BV

 

Blockchain and payments: further on the Gartner Hype cycle?

| 24-01-2018 | Carlo de Meijer |

Payments is increasingly seen as an area that is ripe for disruption, having the potential to enhance payment processing. To overcome the current structural weaknesses in the payments area including low speed, high expenses, financial institutions are increasingly adopting the idea of blockchain or distributed ledger technology (DLT). This in order to offer (near) instant cross-border payments at lower costs, higher security and more reliability. Up till recently most of these trials have been non-interoperable stand-alone solutions. But that may change!

Last month Blockchain bank consortium R3CEV and 22 of its partners announced that they were collaborating on the development of a cross border payments platform built using distributed ledger technology. This may be the first time a shared infrastructure has been developed that addresses the full payment workforce.

The question is: where are we now in the Gartner cycle, and will this R3 initiative be the breakthrough for a more massive adoption of this technology in the payments area?

Central banks: still see hurdles

Also central banks are actively investigating and in some cases even experimenting with blockchain including those of the United States, Canada, China, U.K., France, Germany, the Netherlands, Singapore, South Africa, and Sweden. Central banks’ interest in blockchain represents further recognition of the technology’s potential to transform many aspects of financial systems worldwide, including international payments. They are generally positive about the technology’s potential for applications such as international payment solutions.

On the other hand central banks also note technical obstacles such as scalability and other concerns such as privacy, security and legal issues. They generally emphasize that the technology is still at an early stage and may be years away from widespread use for such applications.

In a recent published research paper, the Deutsche Bundesbank offers up some encouragement for DLT acceptance. They are highlighting the technology’s ability to eliminate reconciliation processes, boost transparency and protect against cyber-attacks. The Bundesbank however dampened the blockchain enthusiasm, dismissing distributed ledger technology’s prospects in retail payments, at least in the Eurozone, which already boasts fast transfers and systems that require a minimum of reconciliation and can process millions of transactions with ease every day.

The authors concede that “it is still unclear whether DLT also has the edge over today’s technology in terms of security, efficiency, costs and speed”.

Read the full article of our expert Carlo de Meijer on Finextra

 

Carlo de Meijer

Economist and researcher

 

PSD2 – has it hit the ground running?

| 18-01-2018 | treasuryXL |

On the 13th January 2018, PSD2 came into force. In previous articles we have discussed the meaning of this legislation. To recap – it is a directive to regulate the payment market and payment service providers, whilst also opening the market to non-banks. This should lead to a uniformity in products, technical standards and infrastructure. PSD2 will allow customers of banks to voluntarily use third party providers to process and initiate their financial transactions.

In the UK the process has gone even further – Open Banking has been enacted. Fintech companies are now in the position of taking over the ownership of the customer relationship that banks now have – assuming this is what the customer wants. The traditional relationship between a bank and a customer is now under threat. Banks, which have traditionally applied a one shop for all your financial transactions approach, will possibly have to change and look more like an App store from which customers can choose the services that they want.

To effectively compete in this new market will mean focus on data mining and achieving an economy of scale. It is not inconceivable that tech giants such as Google, Facebook or Amazon could start offering financial services on the back of their sizeable databases. Whereas banks have invested heavily over the years in their payment processes, new technology means that the costs are far lower for a new entrant.

But will PSD2 truly open the European market for financial services? Research indicates that we very seldom interact beyond our own national borders. The cost of banking, credit cards, mortgages, car insurance etc. differ greatly within the EU. A survey that was commissioned by the European Commission concluded that 80% of Europeans would not consider purchasing a financial product from another EU member state. Any dreams of one Europe are rudely interrupted by such research and public opinion. This is not to say that public opinion could not change – rather that the current market is not very elastic.

So PSD2 is up and running – how about the banks? PwC published a report in December 2017 after conducting interviews with senior executives in European banks. Just 9% reported they were ready, despite 66% saying it would affect their operations. Furthermore, a report was published today by the Dutch Data Protection Regulator stating that the legislation does not take privacy requirements enough into account. This despite the legislation being passed more than 2 years ago.

Eventually banks that are early to design their products specifically for this legislation and bring them to market could establish a clear lead on their opposition. Also, if the public reluctance to transact cross-border was to diminish, it is possible that – in the future – we could be purchasing our mortgages in Finland, our credit cards in the UK and our car insurance in Hungary!!

If you want more information please feel free to contact us via email [email protected]

Bitcoin – regulation and acceptance

| 06-12-2017 | Lionel Pavey |

 

As the price of Bitcoin reaches ever higher – more than $11,000 at the moment – Governments are starting to look at what regulation needs to be put into place. Bitcoin has gained a reputation as the currency of choice for tax evaders and drug traders due to its anonymity. It is a market with little or no regulation and, obviously, Governments are looking at lost revenue. Yesterday the UK Treasury stated the current anti-money regulations needs to be updated to encompass all virtual currencies.

It has been reported that criminals and terrorists have used virtual currencies to purchase illegal commodities via dark webs – ensuring complete anonymity. The proposal from the UK Treasury would mean that traders would be registered. At present, there are almost 100 ATM machines for Bitcoin transactions in the UK – with more than 70 in London. Cash can be entered into the machines and converted into Bitcoins. One transaction involved a customer paying in GBP 14,000 in cash.

For Governments, regulation would mean that the Treasury would be able to identify the owner of the money and investigate the source of the funds. Tax evasion would therefore be reduced. Naturally there are genuine investors who want to buy Bitcoin, but this can already be done via an electronic exchange.

To increase acceptance as a genuine alternative currency there needs to be a growth in financial products related to virtual currencies. Yesterday, the CBOE (Chicago Board Options Exchange) announced that it will start trading Bitcoin futures this coming Monday. Initial margins for trading will be 30 per cent and price limits will be put in place.

However, there are still many hurdles before complete acceptance can occur. It is still not a recognized currency – the retail outlets that accept payment in Bitcoin is still very small. In America, only 3 of the top 500 online retailers accept Bitcoin. Whilst the price of Bitcoin has surged in 2017, this very large price increase is having a negative effect on acceptance by retailers. As the currency has increased in value so much, there appears to be a reluctance among owners of Bitcoin to use Bitcoin to transact. It has become easier to speculate on its value than to trade for goods. This is a serious problem for a virtual currency to gain worldwide acceptance.

Another area of concern regards the transaction time. Confirmation of a transaction can take up to 20 minutes – if you ordered a coffee, then it would be cold before you could drink it!

Virtual currencies are certainly something that should be considered for the future, but until they are backed and trusted by the Government and residents of a country, they will only have a small niche marketplace.

 

 

Lionel Pavey

Cash Management and Treasury Specialist

 

 

TIS & FX Treasury Webinar: Corporate Payments Optimization

| 06-10-2017 | TIS | 2FX Treasury | Sponsored content |

TIS and 2FX Treasury organize a webinar that we would like to bring to your attention. On October 19th between 04:00 and 04:45 PM TIS and 2FX Treasury will host: Corporate Payments Optimization: How to reduce complexity in your business. An interesting session for treasury professionals. 

Complexity is not your friend. Whether in your finance, treasury, shared services or IT departments, improved processes help to reduce risk.
How do the most efficient and effective businesses in today’s world manage a multi-region, multi-bank, and multi-ERP environment? How have leading finance, treasury, and IT professionals gained visibility across their corporate payments landscape?

Join the optimization discussion in this webinar where we discuss business cases based on:
  • Current challenges
  • Standardization and automation of corporate payments through pre-built bank connectors and formats
  • Reduced operational and financial risk due to increased transparency and straight through processing (STP)
  • Enhanced security and compliance