Banks provide “end-to-end” cash visibility

The complexities of corporate cash management – ​​particularly across borders and currencies – mean that a wide range of treasury and CFO functions benefit from high-tech outsourced processing.

This of course includes payment functionality, where processing payments “inside” the bank’s set of offerings becomes a key attraction for banks themselves, keen to maintain business relationships (and in other cases consumers) “sticky”.

For businesses, the attraction is there to streamline B2B payments, or offer preferential payments in a given market (to name just one example). For businesses that are in direct contact with consumers, having more control over the payment experience means they can adapt quickly to changing payment preferences.

The debate surrounding outsourcing and digital-first initiatives hinges on buying versus building, as banks bring more management solutions in-house – and if recent events are any indication, there are enough room for both strategies to help achieve this goal, creating end-to-end solutions within a bank’s own platform.

To that end, this week, PNC Bank said it reached an agreement to buy Tempus Technologies for an undisclosed sum. The Company is a payment gateway provider that provides payment processing solutions to businesses. Offerings include payment apps and payment portals.

In the announcement detailing the deal, PNC said the acquisition would expand the company’s cash management payment platform, including allowing enterprise customers to manage payables and receivables through a single channel, covering all payment rails.

Tempus Technologies’ solutions will be integrated with PNC’s existing payment platforms, such as RTP Network, ACH, Wire Transfer and Zelle, the company said.

And in another piece of anecdotal evidence that payment processing is in the crosshairs of financial institutions (FIs) large and small, earlier this year, Texas-based Vantage Bank Texas, said it deployed CGI All Payments as part of the community bank’s digital transformation. According to the announcement, APS replaces Vantage Bank’s legacy FedWire and ACH processing solutions, and positions the bank for real-time payments for its customers.

The general trend is towards “payments as a service” and as highlighted in an interview with PYMNTS, Deepak Gupta, Global Head of PaaS at Volante Technologies, this is a strategy that can help all stakeholders (banks and their customers) build resilience.

“I see that over 80% of our prospects have a strong preference for payments as a service,” he told PYMNTS of FIs, adding that “within two or three years, 99%, if not 100% of all customers will go the ‘cloud path’ and adopt payments as a service.”

As detailed in this space, Commerce Bank has expanded its partnership with HighRadius, a provider of cash management and cash order management solutions, to include HighRadius’ full suite of integrated receivables and cash management tools. The announcement came after a 2019 expansion in which the bank added HighRadius virtual card processing and electronic bill presentment and payment technologies.

Separately late last year, BNY Mellon announced a partnership with GTreasury. GTreasury will be directly integrated into BNY Mellon’s LiquidityDirect money market fund investment platform.

Earlier last year, Citi said it expanded the reach of its CitiDirect BE digital onboarding platform. Tapodyuti Bose, global head of digital channels and data at Citi TTS, told Karen Webster that amid the pandemic, the bank’s corporate clients have turned to digital channels to engage with their end users. Although they may have centralized at least some treasury operations, Bose said, many large companies still work from fragmented ERP systems collected from multiple small business acquisitions.

JP Morgan EMEA Head of Wholesale Payments Shahrokh Moinian said in a separate interview that technological innovation helps unlock more opportunities for corporate treasurers to step into this new strategic role in the business. Treasurers not only need real-time transaction capabilities, they also need the ability to transact “anywhere, anytime, on any network in the world.”

Moinian underscored the importance for FIs to embrace FinTech collaboration as more industry newcomers begin to target corporate clients. He noted that for JP Morgan, these FinTechs offer “more of a collaborative relationship than a competitive relationship.”

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