The challenge

The mobility industry is undergoing a paradigm shift as the next generation of consumers search for flexibility through subscriptions and pay-per-use models that enable them to access vehicles when they need to and without owning them. For original equipment manufacturers (OEMs) and their captive financing companies, one of the biggest challenges and opportunities in the industry is addressing evolving consumer needs supported by different payment methods and payment options in different countries. From a treasury perspective this means overhauling collections, funding, reconciliation, accounting, financing inventory and the supply chain.

The introduction of autonomous vehicles also lends itself to subscription models so that rising consumption levels may not necessarily translate into higher levels of vehicle ownership. As consumers adopt pay-per-use or subscription plans, companies will have to collect micro payments and offer multiple different payment methods and channels to customers, not only impacting on cash flow projections, but also associated accounting and reconciliation.

The solution

Toyota’s treasury team has addressed this paradigm shift by putting in place an innovative centralised in-house platform. Instead of using a third-party solution, Toyota compiled a technology stack that includes several technology partners along with an internally built solution comprising its own billing and payment transactions and data management platform. The captive finance wing of Toyota, Toyota Financial Services (TFS), has created a platform for business processes-as-a-service supported with risk management and customer service operations.

The platform acts as a payment orchestrator, directing payments from a diverse set of customers for Toyota and all its partner companies. It is able to provide merchant acquiring services to dealers which enables a single consistent solution for its customers, eliminating one-off processes implemented by each dealer. It also supports new revenue recognition models and capabilities across the globe and provides a central repository of customer information, allowing different businesses in Toyota to manage flows from consumer and commercial vehicle purchases, lease payments or subscription fees centrally, all while offering a consistent and seamless experience to its consumer. It also provides data segmented solutions where required by the business or use case.

The API driven solution supports expansion and connectivity across the globe. Founded on the principles of enhancing performance and efficiencies, optimising processes, leveraging data and providing consistent seamless experience to its users, the idea reached fruition through the internal alignment and partnership between various internal stakeholders.

The platform enables payments modernisation via a suite of billing and payments products, incorporating payments, data and analytics, customer experience and support. The solution also focuses on growth opportunities for the mobility services ecosystem and additional markets in the future. It not only acts as a central platform for global payment/gateway, subscription and revenue management, and reconciliation; but also, as a self-service portal providing data and dashboards for analysis and decision making, fraud and risk management, and business continuity. The platform is innovative as it eliminates the need to have multiple fragmented partnerships with a multitude of financial institutions in different markets by different Toyota businesses/dealerships.

“The Harnessing the Power of Technology award recognises and validates a lot of hard work by our platform technology team and partners in developing our innovative in-house flexible billing, payments and data management solution, fully integrated end-to-end across the enterprise, enhancing the customer and dealer servicing experience today, while laying the foundation for tomorrow, to be able to support the business in the ever-evolving mobility ecosystem. We are truly honoured to receive this recognition and appreciate Treasury Today’s Adam Smith corporate treasury awards programme and the opportunity it offers to our industry peers to showcase their achievements on a global stage.”

Lakshan Fernando, Treasury Enterprise Cash Management

Best practice and innovation

The platform is expected to roll out in other countries within the next few years. It is unique in its ability to provide a consistent consumer experience no matter where the customer interacts with the company. It also enables Toyota to meet the evolving needs of the marketplace as new business models begin to dominate. Subscription payment models are expected to grow rapidly in the coming years. Toyota now has a bespoke technology platform that is fully integrated with banking e-commerce platforms, which can manage customer transactions and provide the information and insights needed in payment flows from an accounting and reconciliation perspective.

Cars are expected to further become extensions of smartphones, facilitating purchases with just the press of a button or a voice command. This will be possible because the foundation for this consumer payment interaction has been put in place. And, as technology and consumer preferences change in the future, the platform will position the business to change along with the marketplace needs. The most noteworthy aspect of the platform is the visionary thinking behind it and the bold leadership demonstrated by the collaboration of treasury/business and technology teams in bringing it to fruition.

Key benefits

• Cost savings.

• Headcount savings.

• Process efficiencies.

• Increased automation.

• Improved visibility.

• Number of banking partners/bank accounts reduced.

• Manual intervention reduced.

• Increased system connectivity.

• Future-proof solution.