Critical Steps for Treasury Teams
Despite the familiar hurdles associated with moving money across borders, there are many ways for treasurers to make international payments cheaper, quicker and less painful. Here, three experts from Barclays share their insights into creating a frictionless payments landscape – ranging from the benefits of ISO 20022 and payment APIs to the automation of transactional FX workflows.
Moving cash from one country to another is often more difficult in practice than it appears on paper. In fact, many a treasurer has been known to joke that, were it not for border controls, it would often be quicker to jump on a plane with a suitcase full of cash and take it to the intended destination, than to send it through traditional channels.
While payment rails and technologies have vastly improved in recent years, there are still significant infrastructure and workflow challenges. These contribute to the friction that is, sadly, all too common in cross-border payments today. Karsten Becker, Head of Europe Product Management for Payments and Cash Management, Barclays, elaborates: “There is no single global regulator for cross-border payments and countries have their own unique rules and regulations for data. Understanding those different requirements requires a high level of expertise, and this in itself is a challenge for banks, PSPs [payment service providers], and, of course, time-stretched corporate treasurers.”
Delays in international money movements are also often caused by – necessary – fraud checks and sanctions screening, with a significant percentage of cross-border payments subject to an enquiry or investigation, according to Becker. What’s more, with complex data fields to manage, payers sometimes submit incorrect details, leading to further friction as payments are rejected or misdirected. “Combined with time zone differences, varied cut-off times depending on the payment scheme in question, and other local differences such as holidays, fragmentation means cross-border payments can be challenging to automate,” he explains.