Payments in transition: reaping the opportunities

There is no doubt that the payments industry is experiencing unprecedented development: digital innovation, changing customer expectations, and regulators have put pressure on traditional treasury strategies and systems. Add the COVID-19 pandemic to the mix and these are times of great change for corporate treasuries and their financial institution partners.

In this inaugural edition of the Standard Chartered Regulatory Readiness Series for Corporates, we look at three regulator-inspired changes influencing the payments industry:

Payments transparency

Instant payments

The transition from interbank offered rates (IBORs) to risk-free rates (RFRs).

Payments transparency is crucial in the fight against money laundering, corruption and terrorist financing. To fight the multi-billion dollar financial crime industry, regulators are focused on ensuring payment transactions are accompanied by information such as the names, addresses and country of origin of the ultimate payers and beneficiaries. But transparency is not solely about fighting financial crime. By supplying the full information required by financial institution partners to process a payment, treasuries stand to benefit from significantly reduced reconciliation costs.

Instant payments are a rapidly evolving sector of the payments industry – more than 50 schemes are operating or under development around the world. Consumers and businesses are rapidly adopting online and mobile commerce applications – a trend that has accelerated during the COVID-19 pandemic. Instant payments are well-suited to e-commerce, providing corporate treasurers with a cheaper alternative to traditional card payments. By adopting instant payments, treasuries can create new business models and improve competitiveness and customer service while also improving cash flow and liquidity management.The transition from IBORs to RFRs is significant as IBORs, particularly the London Interbank Offered Rate (LIBOR), is an important interest rate benchmark for a range of financial products. It is widely used by corporations, ranging from the smallest to the largest multinational. We advise corporate treasurers to start reducing their reliance on IBORs and transition to the new RFRs, which are based on robust and credible overnight reference rates.These changes present an opportunity for corporate treasurers – one that requires them to take stock of current strategies, business models and processes if they are to reap the benefits.This is something that corporate treasurers do not have to do alone – at Standard Chartered, we have the global footprint, network and experience to help clients transform treasuries for a new era.We encourage all our clients to reach out to us through your Relationship Managers so we can help guide and assist you in navigating the fast-changing world of payments regulations.

This is something that corporate treasurers do not have to do alone – at Standard Chartered, we have the global footprint, network and experience to help clients transform treasuries for a new era.

Lisa Robins
Global Head, Transaction Banking

In this edition

Payments transparency: A clear advantage

Instant payments: Fast track to opportunities

How to thrive in the fast-changing payments landscape

Preparation is key for transition to risk-free rates

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