Standard Chartered’s new solution, launched in partnership with Tencent Financial Technology Group, leverages WeChat’s online payment gateway to enable corporates to reach over 800m consumers in China.
By 2019, the global e-commerce market is expected to be valued at US$2.4trn. The size of the market means that it is an area that corporates of all shapes and sizes need to be in.
Enabling the business to thrive in an e-commerce environment, however, poses some challenges for the corporate treasury department, most notably the need to accept payments from a host of different payment service providers. In a time when treasurers are striving to simplify their operations, e-commerce can open up a Pandora’s box of complexity.
It is this that Standard Chartered is trying to alleviate through its recently launched online collection solution, in partnership with Tencent Financial Technology Group, that utilises WeChat Pay’s payment gateway.
How it works
Gautam Jain, Global Head, Digitisation and Client Access, Transaction Banking at Standard Chartered told Treasury Today that the solution works through the corporate placing a QR code related to a particular product on their web page, printed material or an email. The consumer then scans this code using the WeChat app and is instantly taken to a page where they can review the order details for the product on an auto-filled payment page, provided by Standard Chartered. From here the consumer confirms payment using the WeChat payment gateway. Funds are then credited into the client’s designated account once received by Standard Chartered.
“The solution cuts down the number of technical integrations, legal contracts and bank accounts for treasurers to maintain,” explains Jain. “It leverages WeChat’s payment gateway to collect proceeds and once the transaction is complete, the data is sent via the bank’s secured channel to the existing e-banking platform.”
In order to provide further simplicity, Jain notes that the solution consolidates receivable flows in the same way that it does from wire transfers, SWIFT, cheques and mobile wallets in other markets. “As it removes the need to maintain different bank accounts for different collection channels, it also frees up working capital and cash flow,” he says.
In the fast-paced e-commerce space, corporates often call for solutions that are nimble and that can be adopted quickly.
This is something that Jain notes Standard Chartered has placed particular emphasis on. “In order to activate the service, we made sure that the client is only required to have an account with Standard Chartered China and to complete the relevant client due diligence documentation to onboard Straight2Bank, our e-banking platform. A service application form to introduce the channel for collection through WeChat will also need to be completed” he says.
Therefore, for those corporates already onboarded to Straight2Bank can immediately start receiving intraday reports and end of day statements via existing web portals or an ERP.
Solutions for the future
In Jain’s view, solutions such as these will only become more in-demand as e-commence continues to take hold and as corporates look to their banking partners to help them handle the complexity.
“Treasurers are dealing with various payment service providers to accommodate consumers paying by cards, wallets, bank accounts and now social media,” he says. “The challenge is understanding the landscape and reconciling the different sources of data and fund flow to make the back end processes as seamless as the front end.”
He concludes by saying: “In an ideal world, instead of having to perform multiple technical integrations and onboard new external partners, this should all be taken care of by the bank which has existing connectivity to a corporate’s information system and manages their treasury”.