Treasury Today Country Profiles in association with Citi

in association with

BNP Paribas

Case Study: 
Marek Chruściel, Play

Marek Chruściel, Head of Treasury, Play

Poland-based telecommunications operator Play is a true 21st century success story. The telecoms group has seen its subscriber base grow from 4.6 million in 2010 to 12.3 million in 2014, whilst its share of the Polish mobile market grew from zero in 2007 to 10.9% in 2010. By the end of 2014, Play’s market share had grown further to 21.3%, making it one of the country’s top four telecommunications providers.

Marek Chruściel

Head of Treasury

Within an extremely dynamic business environment, and whilst undergoing rapid expansion of its subscriber base, telecoms operator Play has focused on collections efficiency. The company’s treasury function opted for innovation by implementing a collections factory and relying on virtual accounts to collect from one centralised hub. Head of the Treasury Department at Play, Marek Chrusciel, says that “Play can testify to the efficacy of collections factories,” and here he shares his experience of implementing such a structure, as well as virtual accounts.

During the month of March 2015 alone, the company handled no less than 3.6 million individual incoming payments. Of this total, only seven required manual entry when the rest was automatically reconciled and posted into the company’s billing system. Ninety one percent of all incoming payments were completed via regular bank transfer, 5% through pay-by-link provided with electronic invoice or via the company’s Play24 web page (dedicated to customer service) and 3% from direct debit payments. “The remaining 1% of payments came from various types of cash payment, or an evolving method using QR-codes scanned with smartphones,” says Chrusciel.

Whilst the implementation of a collections factory brought about a number of benefits, there were also some costs/risks to consider.

Benefits

  • Automatic daily download of payment details into Play’s billing system.

  • Various payment methods are consolidated into one payment data file.

  • Fast and accurate identification of incoming payments.

  • Timely and accurate information updates on payment delays.

  • Automated booking.

  • Manual errors eliminated.

  • Cost savings.

  • A flexible, scalable solution.

Costs

  • Additional bank cost per single incoming payment.

  • Various departments need to be engaged in the implementation and service processes.

  • Risks to the continuity of the process, such as a daily file left undelivered or a major data error.

Allocating all customer payments

Virtual bank account numbers are an inherent element of collection factories and, for Play, they are generated out of the company’s billing system. “They are relatively long by European standards, consisting of an eight-digit bank identification number, a four-digit identification number to map Play’s virtual accounts to its master account, and a ten-digit customer ID number assigned by Play to each of its customers.”

The company runs three billing cycles each month and payments are received 365 days a year – running to over 350,000 on peak days. Payment data files are delivered on a daily basis by the bank via secure file transfer protocol (SFTP) or web service every afternoon and they are processed overnight with payments assigned in Play’s billing system. Payments are automatically allocated, with the very occasional manual input for any individual payment that requires it. Finally, Chrusciel has the following recommendations for corporates planning to set up a similar collections factory:

  1. Create a well thought-out individual payment allocation model and have all reporting requirements agreed prior to implementation.

  2. As far as possible, keep any manual processes to an absolute minimum.

  3. It is worth considering a backup solution for the communication channel.

  4. Careful oversight is required over both change to management and documentation.

Chart 1: Mass collect
Chart 1: Mass collect

Source: Play

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