Cash & Liquidity Management

Unlocking the Treasury-Merchant Services value proposition

Published: Apr 2023

Treasurers are assuming greater responsibility for increasingly complex payment processes as their companies expand into new ways of selling directly to consumers. The ability to forecast cash flows and manage currency and payment risk depends on data analytics, seamless reconciliation and sophisticated safeguards. Merchant solutions can provide real-time consumer data, optimised currency exchange and advanced security processes, helping companies make the most of their working capital and treasurers achieve their goals.

Juan Garrido

Head of Merchant Services Product, Global Banking

Kevin Baker,

Head of Merchant Services, EMEA, Merchant Services, Bank of America

From confectionary manufacturers to carmakers, global companies are beginning to explore selling directly to consumers. As that happens, treasurers find themselves involved in responsibilities that span beyond traditional areas of oversight such as payroll, supplier payments and receivables to monitor flows generated by thousands of individual consumers. “Now you’ve got new flows, refunds and reconciliations to think about,” says Kevin Baker, Head of Merchant Services, EMEA with Merchant Services at Bank of America. “What’s more, the treasury department is expected to be the ‘payments and transactions center of excellence,’ offering expertise and best practices companywide.”

As corporate treasurers oversee ever more complex payment systems, many are discovering a key connection with the teams that manage the company’s merchant strategy and operations. “Historically, marketing or IT teams may have looked after merchant services,” continues Baker. “Yet, as companies become more digital and explore channels through which to sell, it becomes increasingly important for treasurers to work with other internal teams focused on consumer payments as these teams can provide key insights and comprehensive data relating to customer purchasing patterns, foreign currency exchange, fraud protection and other services,” he says.

Ways merchant solutions can help

Timely data for forecasting and modeling

By recognising merchant services as a key component of a digital receivable strategy, treasurers can tap needed transparency. “For example, money from sales made today may not appear in a company’s accounts for a day or two,” says Baker. “But your merchant services dashboard is already telling you how much you sold, and you can build that into your forecasting model.”

“Merchant solutions can also help treasurers stay current on evolving economic trends and consumer behaviour,” says Juan Garrido, Head of Merchant Services Product in Global Banking at Bank of America. For example, as pandemic re-openings lead more consumers back to physical stores, data can help companies predict and prepare for shifts in card-not-present (ie remote) versus card-present (in-store) transactions.

Real-time reporting and automatic reconciliation

Treasurers have spent years seeking efficiencies in enterprise resources planning (ERP) systems across their entire operations, from financing and procurement to invoicing and production. Manually translating data from one system to another is a big headache. “For reporting purposes, tailored merchant solutions can provide treasurers with specific, customisable data on chargebacks, transaction volumes and other key performance indicators,” Garrido says. “Merchant services solutions streamline that process and ensure that the reporting tools easily connect wherever possible with the customer’s ERP system, making information easier to upload and understand, with less manual work.”

The same holds true when it comes to reconciling payments. For example, when a consumer in Chicago or Sydney buys something and agrees to pay in separate payments, bottlenecks occur when the e-invoices sent to customers can’t be easily identified and matched against payments.

Limiting fraud exposure

With both business and reputation risk as central concerns, treasurers have a vital interest in knowing that their company is doing everything it can to protect customer identity and detect identity fraud, affecting some 42 million US adults in 2021, at a cost of US$52bn.

For example, 3D Secure technology authenticates purchases by asking the consumer to verify their identity. “We also advise that treasurers have implemented the latest encryption and tokenisation technologies,” Garrido says.

Foreign exchange optimisation

With cross-border e-commerce transactions expected to reach US$1.2trn in 2022, companies must balance convenience for their customers, who expect to pay for goods or services in their home currency, against the company’s need to mitigate the impact of multiple and fluctuating currency values.

Comprehensive service and support

In a world of uncertainties, where financial regulations and security procedures often vary from country to country, having your merchant services and banking services under the umbrella of a single global financial institution offers efficiencies for your working capital and an added degree of security.

As the treasury department takes on more oversight of payments and transactions, contact a Bank of America relationship manager to learn more about how merchant services specialists can help.

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