Treasury Today Country Profiles in association with Citi

The next generation of payments factories go beyond consolidation

As corporate payment factories mature, some companies are looking to further optimise their payments processes, and new-style payment factories are helping them do just that. Next-generation payment factories allow corporate treasury not just to gain central control over outgoing payments, but also to…

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  1. Is there any way of getting some sense of the costs involved in payment factory projects and where they arise? Seems to me there are big costs to put against the gains. Could someone who has done this sort of thing summarise key costs and benefits and how they got budget.
    Dave W's Gravatar

    Dave W 2011-02-25 15:39:48

  2. This is a big question and I would be happy to share our experiences if that might be of interest.  I'll email you here on the site with my contact details.  To summarise the saving in banking and operational costs were and are clear but achieving some of ths HR saving in the operational units was not always easy.  The cost are more complicated and understandably comprise one-off project and system costs and then the ongoing costs of the SSC/payment factory. 

    Peter CMC's Gravatar

    Peter CMC 2011-03-01 17:08:39

  3. The cost comes primarily from the acquisition, implementation and operation of the payment factory. This cost can be easily articulated as you can look at the overall project cost, both internal and external. Another part of the cost that is usually overlooked is the opportunity cost. What would the project team be doing if not implementing a payment factory? Where would their time be spent on what other iniative? The savings typically come in operational effeciencies, reduced bank fees and of course the reallocation of resources, or FTEs to either other projects or the overall reduction of resources as a lot of manual work is eliminated. What should not be overlooked is the reduction of operational and regulatory risk from implementing such a solution. Better controls allow for a more robust environment that is easier to implement policies and best practices.
    wesbernard's Gravatar

    wesbernard 2011-03-25 03:33:16

  4. Some of the benefits are tangible and measurable and others are less tangible and measurable. Typical benefits mentioned by corporates having implemented a payment factory are:

    1. better compliance with internal controls policies
    2. mitigation of operational risk / fraud
    3. better visibility on cash positions and cash flows
    4. cost reductions by elimination of various eBanking tools, proprietary banking channels, and reduction of banking fees through economies of scale
    5. standardisation of workflows across entities, banks, payment types and centralisation of data facilitating business intelligence
    6. increased independence from banking partners
    7. increased flexibility in case of new payment regulation(e.g. SEPA) as processes are standardised across entities.
    8. facilitator of M&A activity as new entities can be plugged in a standard process
    You can find ROI studies on the SWIFT website: Some of these are payment factory projects that have been implemented in conjunction with a SWIFT project.

    lbelpaire's Gravatar

    lbelpaire 2011-03-30 17:06:20

  5. If you have a good innovative bank (ThePayBank) they willl provide you for free the payment factory as a cloud service.
    Investor's Gravatar

    Investor 2011-04-25 13:31:13