Treasury Today Country Profiles in association with Citi

A handy way to more efficient collections

It can often be difficult to see how innovations in mobile payments are relevant to corporates. It might be convenient to tap your phone on an NFC reader to buy a coffee at your nearest chain store, but how is that relevant to a treasurer?

Actually, the fast-paced development in mobile payments on the retail side does have a benefit for corporates, with developers looking at how they can extend products to the widest customer base possible. This has recently been the case with the Barclays Pingit app for smartphones.

The retail launch of the Pingit app to Barclays’ consumer base took place on 16th February this year. The app was designed and released as a peer-to-peer payment mechanism, allowing customers to send payments to each other. This month the app has been updated, to allow the same customers, using the same application, to pay the bank’s corporate client base. By moving from a peer-to-peer, largely cash and cheque replacement payment type, into a consumer to corporate position, the bank hopes to make the corporate collections process easier and faster.

“Where corporates have expensive internal processes handling cash and cheques, this should provide them with considerably better referencing information and a faster send of funds so that those corporates have a better collections mechanism,” says Mike Walters, Head of UK Corporate Payments Product Management at Barclays.

There are a couple of ways that corporates can use Pingit to connect to their customers and receive payments. One way is for the corporate to provide their customers with a corporate ID, which is usually the name of the organisation. So rather than the consumer paying in using their mobile phone number, they are able to just type in the name of the organisation into the app – ‘Help For Heroes’ and ‘The AA’ are two examples of those that are live today.

The other option for corporates is to include their own Quick Response (QR) code in the invoices they send out. There is a QR code reader built within the app that will read that QR code and populate the amount and the referencing information that the corporate wants to see. This information will then play back onto their bank statement, providing a quick way to make the settlement with referencing information.

The original consumer version of Pingit allows for a maximum of £300 per day to be sent from a consumer. Obviously this limit is not great for a corporate that is trying to collect a large utility bill, for example. Taking this into account, the updated consumer to corporate version of the app allows a consumer to pay a corporate up to £10,000 per day. Corporates themselves can receive any amount per day from their consumer base.

Any payments that are sent from consumers to corporates via Pingit appear in real time on the statement information of the corporate. Information includes the name of the person who has sent the payment and the referencing number – either from the QR code from the corporate or the one that the consumer has keyed in. Corporates will immediately know, either through their online banking channel or through the statement feeds provided by the bank, that the value is there in cleared funds in their account.

“The beauty of the QR code from the corporate perspective is that they are absolutely in control of what the reference data is, especially for their reconciliation processes,” says Richard Martin, Managing Director, Payments and Cash Management Product at Barclays.

The addition of the consumer to corporate payment functionality has not affected the underlying security that exists in the app, which is still accessed by a five-digit pin number. Additionally, the app uses positive confirmation on the consumer side. Every time a consumer tries to initiate a payment, the app plays back to them the identity of whom they are trying to pay, which they then need to confirm. “This positive confirmation is a significant step forward from cheque, cash or online payments,” says Walters.

Barclays have gone from the peer-to-peer app to the consumer to corporate app in a number of weeks from concept through to launch, so there is a significant flow of development that the bank will be doing going forward. This will be around helping corporates to receive payments more efficiently and enabling corporates to make payments to consumers using the same infrastructure.

“There are a number of other areas that we will be developing around the information feeds, but to start off with we wanted something that was quick and easy and fits into the existing processes on the corporate side,” explains Walters. With developments such as this, it is clear that mobile payments can provide a way to create greater efficiencies for corporates going forward.