At AFP 2019 in Boston, JP Morgan Chase’s US and global ACH business development manager Steven Bernstein, Retail Payments Global Consulting Group CEO Rene Pelegero and Amazon’s senior treasury manager Colleen Anderson Ramsay took to the stage to examine how this shift has transformed how practitioners are responding.

Anderson Ramsay highlights that the financial services industry is on the cusp of auto reconciliation and is constantly dealing with complex banking structures that now has the capability of doing much more with enhanced technology, such as artificial intelligence and machine learning. However, different payment mechanisms must be examined in order to remain ahead of new financial players.

“We have seen a shift in the cash management world from plugging, slugging and doing to automating. Treasury is always talking about real-time, while accounting is lagging behind, proving that there is a need for sophisticated treasury technology.”

Bernstein introduced Libra and blockchain to the conversation and points out that the card must be considered within the spectrum of other payment types. “The optimal way of thinking about integration is whether to offer cards based on AI, risk of party and the cost of payment. There must be one underlying philosophy.”

Anderson Ramsay continues: “It’s about understanding what your customer wants and building out processes that your customer wants to engage with. If card payments are not available online, you will lose the up and coming customer - that are at college age - and are starting to test forms of e-payments.”

She also says that businesses must work back from the customer, which has long been a mission of Amazon’s. Data mining from card transactions can help corporations understand the optimal point where the legal entity must be placed in order to push the payment through, which in turn, benefits both the customer and the bank.

“Treasury is not just about managing cash. It is about becoming part of the conversation on cards, understanding the cost of them and whether it may be cheaper to process e-products than cards.” She adds that treasurers must also truly understand the value of real-time, whether it cuts down fraud or noise, or decreases held cash balances.

Anderson Ramsay quips: “20 years ago, if a company didn’t know treasury existed, that mean you were doing a great job. I want my accountants to be experts in new accounting standards, not real-time payments.” Moving on to speak about emerging markets, both Anderson Ramsay and Pelegero mention that international business has already been impacted by new payment methods.

Pelegero explains: “Amazon and Netflix are able to change consumer behaviour and in turn, payment behaviour, but to take Japan as an example, while they have been doing real-time payments for decades, they use cash a lot. They use cards to withdraw cash and go to a convenience store to pay bills. There are mechanisms: they are not better or worse, just different.”

Bernstein concludes that when considering orchestration and optimisation of payments, there are two routes a corporation can take:

1. Execute alone, which will require APIs for a specific use case and to solve a specific problem
2. Allow external parties to do the translation for you e.g. fintechs or other financial players.