Treasury Today Country Profiles in association with Citi

Panini

One to Watch Highly Commended: Panini S.p.A

Scott Cooper, Panini and Yann Leray, BNP Paribas

This is a proof of concept using blockchain for cross-border payments. The transactions were conducted between Panini Group and Australian packaging firm Amcor. Each transaction was cleared in a few minutes and used different currencies to facilitate transactions between bank accounts located at branches in Germany, the Netherlands and the UK.

Photo of Scott Cooper, Panini and Yann Leray, BNP Paribas.

Fabrizio Masinelli

Group Treasurer

Panini is a company headquartered in Modena, Italy, named after the Panini brothers who founded it in 1961. The company produces books, comics, magazines, stickers, trading cards and other items through its collectables and publishing subsidiaries.

in partnership with

Blockchain proof of concept for cross-border payments

The challenge

The challenges of transacting cross border are not new. Different regulations, clearing systems and file formats have challenged many corporations for a number of years. What is more, cross-border payments in foreign currency are difficult to trace and the speed of execution is not as smooth as corporates would like.

However, industry players are working tirelessly to drive improvements in this space. One such solution that is showing a lot of promise is distributed ledger technology, as it has the potential to open doors to a potentially new era for completing such transactions in a completely different and very fast way.

The solution

Although the distributed ledger is a fairly nascent technology, there is already a lot of corporate interest. And some pioneering treasurers are beginning to actively investigate the technology alongside their banking partners.

Panini are one such company and at the end of 2016 it completed some of the first ‘live’ cross border distributed ledger transactions in partnership with BNP Paribas.

Diagram 1: How does it work?
Diagram 1: How does it work?

The transactions were conducted between Italian sports collectibles firm Panini Group and Australian packaging firm Amcor. Each transaction was cleared in a few minutes and used different currencies to facilitate transactions between bank accounts located at branches in Germany, the Netherlands and the UK.

“For me and Panini this Award is very important and unexpected; for our company to be recognised in this way against other big corporates is a huge honour and this pushes Panini to continue in the same way.”

Fabrizio Masinelli, Group Treasurer at Panini said that the company had been keen to be involved in the transaction following initial discussions with BNP Paribas earlier in the year. “We have been following the development of blockchain closely and see a real benefit in being at the cutting edge of a service that can provide fast and secure payments,” he says.

Best practice and innovation

The project, whilst still at proof of concept stage with minimal scope in terms of the number of countries used has clearly demonstrated that new technologies such as the distributed ledger is capable of delivering alternative and workable solutions to real corporate treasury challenges; in this example, cross border payments.

Diagram 2: Proof of concept
Diagram 2: Proof of concept

“The test worked perfectly and was fast and secure,” says Masinelli. “It was great to watch the transaction happen in minutes, rather than have to wait a day or more. We must not forget that blockchain remains in a test stage for the most part, but it is already proving that it works so I don’t expect it to be long before there is mass-adoption.”

Masinelli concludes, “Probably the most important factor in our involvement with this project has been the very short timing in which this PoC has been prepared and completed and the extreme efficiency of this new technology; far beyond our expectation. This really is the future.”

Key benefits

The benefits of using blockchain technology for cross border transactions will be as follows:

  • High speed for completing the payment end-to-end.

  • Ease of tracking cross border transactions.

  • Far easier payment reconciliation.

  • Increased optimisation on the liquidity of the company and being able to release really last-minute payments when required.

  • Full transparency of the transaction processes.

  • Future expectations – further cost savings on banking fees.

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