This article was first published in The Asset in August 2019.
The value of real-time technology is not only that it can upgrade treasury functions, but that- it also empowers treasurers to reimagine their treasury’s fundamental mechanisms through a digital toolkit. As instant payments schemes and other enablers continue to roll out across the world, this has a knock-on effect on the full value chain of globally connected corporates. As a result, treasury departments are now looking to move from batch and daily processes to real-time or near-real-time systems – and from purely operational treasury to a more strategic treasury focus.
There are many paths that could be taken by Asian treasurers to unlock the benefits of real-time treasury, but perhaps the most fundamental of these will be to embrace real-time payments, open banking, application programming interfaces (APIs), and adopt forward-thinking frameworks, such as virtual accounts and real-time in-house bank accounting and reporting.
Understanding the Asian payment landscape evolution
Asia contains the top three countries for unbanked populations globally, with a significant proportion relying on cash and cheques, as opposed to electronic fund transfers, cards and other payment methods. Over the past decade, however, mobile e-wallets have grown in popularity, serving to reduce payment friction for consumers across Asia. Alipay and WeChat Pay, for example, have become highly prominent e-wallet providers in China, offering instant settlement for users within their own ecosystem.
Yet, while many wallet providers have been offering instant settlements for some time now, their services typically serve only the peer-to-peer (P2P) and business-to-consumer (B2C) segments, and do not allow users to transfer funds to different wallet providers. What’s more, corporates are often reluctant to transact or place their balances in e-wallets, due to their risk management policies.
Instant payments, as one of the fundamental services underpinning real-time treasury, represent a natural contender to drive the next revolution in Asia’s payment landscape, driving financial inclusion and digitalising large volumes of payments – that is, providing these schemes can compete with the simplicity and immediacy of existing payment methods.
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