by Hans Van Den Bosch, Global Sector Head Consumer Brands, Retail and Healthcare, Global Liquidity and Cash Management and Gregory Edwards, Global Head, Transactional FX, HSBC
CBRH treasuries have already made considerable progress in streamlining their payment processes through initiatives such as payment factories. Now many are turning their attention to an altogether tougher challenge in the form of collections, and more specifically global e-commerce collections. Hans Van Den Bosch, Global Sector Head Consumer Brands, Retail and Healthcare, Global Liquidity and Cash Management and Gregory Edwards, Global Head, Transactional FX at HSBC examine some of the possible challenges and solutions when dealing with diverse payment and clearing systems and multiple currencies.
One of the obvious differences between payments and collections is that in most cases commercial leverage enables treasury to be more prescriptive when it comes to choosing and implementing new processes. By contrast, irrespective of whether CBRH treasuries are dealing with B2C or B2B relationships, collection methods tend to depend more on the customer’s preferences.
This is challenging enough when dealing in just a few countries, but in the context of e-commerce, the difficulties multiply. This is especially important now, because in addition to established specialist e-commerce retailers, two other categories of entity are increasing their online activity. Bricks and mortar retailers have appreciated that they need an e-commerce presence, while consumer brand companies have started to open their own direct to consumer online sales channels alongside sales via multi-line retailer relationships. A further complication is that the challenges associated with B2C and B2B transactions are not identical across the CBRH sector. For instance, electronification of collections in the B2B healthcare sector is impeded by the established preference of many customers for paying by cheque.