A corporate survey indicates a high level of interest in lowering the cost associated with connecting to multiple payment networks and solving the liquidity management problems that all these connections create. The survey indicates that 35% of corporates interviewed ranked the lack of access to real-time or intraday information as their number 1 issue while also indicating international payments as a major pain point.
While faster payment networks are rolling out in most countries these are typically relegated to in-country transactions. Major international banks have deployed cryptocurrencies as a solution to both of these problems in that they operate across borders and settle instantly (see “Cryptocurrencies: Governments and Banks Catch Up to the Adoption Curve”):
“For customers of these organisations, the two biggest pain points by far are having access to real-time or intraday liquidity management (35% ranked this number 1), and the cost of payments processing (33%). Corporate treasuries have themselves been readying for the greater impact of real-time payments on their liquidity management as caps on the value of transactions permitted over instant payments networks are increased. They are challenged to accurately forecast their liquidity management needs as real-time transacting spreads, and they expect their banks to help them with this visibility
While cost and liquidity management were the clear dominant themes bank customers are discussing with their banks, there is also significant pressure on improving the efficiency of cross-border payments. This pressure will only increase with the rise of alternative business models outside the correspondent banking network putting more focus on the cost, speed and transparency on offer.”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group