The challenge

On the back of Traveloka’s rapid business expansion, its working capital management and cash management needs have also increased. However, due to Traveloka’s extensive daily airline and hotel booking volume, they faced several challenges:

1. As an online travel agent (OTA), the ability to confirm a booking across airline and hotels is dependent on the ability of the OTA to confirm payment through a pre-agreed channel and payment type. This requires Traveloka to have various payment types accepted by thousands of different suppliers – wire transfers, virtual card payments, pre-funded accounts, among others.

2. Payments to suppliers are required in real-time upon booking to receive confirmation for the consumer. This requires Traveloka to have a real-time 24/7 payments capability.

3. Prompt payments through a secured channel are required to accommodate thousands of different suppliers to ensure suppliers receive the required payments in order to confirm bookings.

The solution

Diverse payment options, payment visibility, payments optimisation and funding efficiency are at the heart of the project. Many of the pain points identified demanded the adoption of a fully API integrated cash management structure. To accomplish this goal, Traveloka worked in close partnership with Citi Commercial Bank in ASEAN to set-up a fully integrated cash management structure with a virtual card account payment option to meet its objectives:

• A fully API integrated multi-currency (SGD, THB, VND, IDR, MYR, PHP and USD) virtual card account as a payment option to facilitate real-time payments to suppliers 24/7 globally.

• A host-to-host (H2H) integrated cash management structure to facilitate local/cross-border payment and intraday and end-of-day account balance for reconciliation.

• Automated virtual card credit line balance information, coupled with automated and just-in-time funding capability to ensure sufficient credit line for card payment on every occasion.

• Fully automated local and cross-border wire transfer feature for all non-card accepting suppliers.

This payment and cash management structure has greatly enhanced the group’s global cash management capability, reduced manual effort by 76% and improved the cross-border fund allocation efficiency by 80%. It is a structure that enables Traveloka to process payments for hundreds of suppliers worldwide on a daily basis without any manual intervention from employees as the structure is now fully automated.

This award is a symbol of our long-term strategic partner relationship with Citibank, designing and implementing Citibanks’ tailormade services/solutions. Finally, this award is a result of all the treasury team members’ proactive and tireless contributions to our capacity enhancement.

Masaru Yano, VP, Group Treasurer

Best practice and innovation

Traveloka’s integration with Citi via host-to-host integration (H2H)/application programming interface (API) provides the company with visibility of real-time, intraday, and end-of-day aggregated balances of all Citi accounts globally. The structured visualisation of accounts improves overall control of financial data and funds across the different accounts.

Daily and intra-day notifications on card account limits across the different currencies are directly provided to ensure sufficient funds are available to facilitate payments. The Traveloka treasury team monitors these levels of credit limits and executes funding based on the positions to ensure minimal disruptions – this is particularly important during peak periods, weekends and public holidays across geographies.

Key benefits

• Cost savings.

• Headcount savings.

• Process efficiencies.

• Return on investment (ROI).

• Increased automation.

• Risk mitigated.

• Improved visibility.

• Errors reduced.

• Number of banking partners/bank accounts reduced.

• Manual intervention reduced.

• Increased system connectivity.

• Future-proof solution.

• Exceptional implementation (budget/time).

• Quality accreditation achieved.

• Improved key performance indicator (KPI) metrics.

“Leveraging the features of Citi’s virtual card and cash management capabilities, we can now digitally manage cash management across different platforms (booking, treasury management and ERP) and make payments in real-time 24/7, 365 days a year. With this structured set-up, today, we are equipped to process thousands of transactions daily.”

Masaru Yano, VP, Group Treasurer