In this presentation, payments experts discussed important trends and considerations to help with your payments programs
- 1. Trending Topics in Payments October 22, 2013 1
2. Payment Centralization 3. To centralize or not to centralize
Different regions see varying degrees of centralization and payment
factoriesTypically Central Europe treasury is responsible for
transmission of all payments (although vendor payments may be blind
routed) North America the opposite; we usually see A/P (via the
ERP) have a separate workflow and connection to banks UK a bit of
both 2013 Kyriba Corporation. All rights reserved. PRIVILEGED &
CONFIDENTIAL.3 4. To centralize or not to centralize Why the
differences between regions? Bank connectivity choices (e.g. EBICS)
make it easier to consolidate Tendency for more centralized
financial workflows (and implementation of shared service centers)
Pre-SEPA, much complexity in varying types of payment formats SEPA
2013 Kyriba Corporation. All rights reserved. PRIVILEGED &
CONFIDENTIAL.4 5. Value of centralizing payments Cost and
efficiency!!!Control and complianceReduced bank services and
costsVisibility into payments being sentControl of payment
timingLess systems to maintainOpportunity to standardize payment
termsOpportunity to review payment programs (e.g. early payment
discounting) 2013 Kyriba Corporation. All rights reserved.
PRIVILEGED & CONFIDENTIAL.5 6. How do I centralize payments? 1)
Collaboration: determine who is involved 2) Evaluate required banks
3) Centralize connectivity to banks (TMS or ERP) 4) Optimize bank
services Reduces formats needed 5) Standardize internal workflows
approvals, limits, etc. 6) Consolidate information in a single
system (ideally, portal) 2013 Kyriba Corporation. All rights
reserved. PRIVILEGED & CONFIDENTIAL.6 7. Security and
Authentication 8. Security and Authentication Internal Controls
First level of security is internalGlobal control over payment
initiation, approval, release is critical to avoid fraud,
mistakesDecentralization provides challenges can be overcome by
centralizing and standardizing processesTechnology usually helps
but needs to encompass entire workflow to be effective 2013 Kyriba
Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.8
9. Security and Authentication Security 1) Confidentiality Payment
file is encrypted and only the bank can read the data (e.g. use of
PGP)2) Integrity Payment has been sealed (bank can tell if seal was
tampered with)3) Non-repudiation (for certain protocols) Bank
cannot deny receiving payment message that organization can prove
was sent 2013 Kyriba Corporation. All rights reserved. PRIVILEGED
& CONFIDENTIAL.9 10. Security and Authentication Authentication
Digital Signatures Bank knows payment originated from my company
and was authorized to be sent SWIFT 3SKey is one of more popular
digital signatures Signature applied in treasury/payment system by
approver(s) Not yet commonplace, but increasing in popularity 2013
Kyriba Corporation. All rights reserved. PRIVILEGED &
CONFIDENTIAL.10 11. Other Payment Options 12. Mobile Payments
Near-term impact limited to mobile being part of the workflow
Initiation Review Approve Demand to enable in the field personnel
to initiate remote payments will increaseSupporting other parts of
business to accept mobile payments is a strategic opportunity 2013
Kyriba Corporation. All rights reserved. PRIVILEGED &
CONFIDENTIAL.12 13. Non-Bank Payments Mobile technologies have also
spurred increase in non-bank payments Paypal, Western Union,
SquarePrimary drivers include: FX translation High cost to receive
wires Growth in emerging marketsChallenge: overcome counterparty
risk concernsOpportunity: reduced costs; higher efficiency 2013
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CONFIDENTIAL.13 14. Connectivity 15. Connectivity defined Service
providers manage both formats and connectivity for domestic and
international payments. Domestic BanksService ProviderCorporate
ClientVendor manages formats and connections for you International
Banks 2013 Kyriba Corporation. All rights reserved. PRIVILEGED
& CONFIDENTIAL.15 16. Connectivity defined Connectivity is
Connectivity Element 1) Network protocol 2) Connectivity
methodExamples Public IP, VPN, leased lines, older systems (X.25)
FTP, SWIFT, EBICS, MQ, AS2, internetbased3) File formatEDI820,
NACHA, XML ISO 200224) SecurityEncryption via PGP, PKCS#7 (3SKey),
S/MIME 2013 Kyriba Corporation. All rights reserved. PRIVILEGED
& CONFIDENTIAL.16 17. Connectivity defined Connectivity is
Connectivity Element 1) Network protocol 2) Connectivity
methodExamples Public IP, VPN, leased lines, older systems (X.25)
FTP, SWIFT, EBICS, MQ, AS2, internetbased3) File formatEDI820,
NACHA, XML ISO 200224) SecurityEncryption via PGP, PKCS#7 (3SKey),
S/MIME 2013 Kyriba Corporation. All rights reserved. PRIVILEGED
& CONFIDENTIAL.17 18. Connectivity defined Connectivity Methods
1) FTP Host-to-host connectionsDirectly to/from the bank using a
custom script developed and maintained by vendorAccess and security
dictated by the bankUsed frequently around the world 2013 Kyriba
Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.18
19. Connectivity defined Connectivity Methods 2) SWIFT Both a
network and author of formats & standardsThe network requires
membership; allows communication of messages between members SWIFT
(or BIC) addressesDifferent membership types -> different
services (e.g. Member-Concentrator vs. SWIFTNet) 2013 Kyriba
Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.19
20. Connectivity defined Connectivity Methods 3) EBICS (and
regional protocols) Certain countries have protocols to connect
directly to banks in that country (e.g. France, Germany,
Austria)Simplifies connectivity for the vendor, although require a
service provider to get connectedDepending on number of banks
corporate has in that country, SWIFT may be more efficient 2013
Kyriba Corporation. All rights reserved. PRIVILEGED &
CONFIDENTIAL.20 21. Connectivity defined Connectivity is
Connectivity Element 1) Network protocolExamples Network IP, VPN,
MQ, AS22) Connectivity methodFTP, SWIFT, EBICS, internet-based3)
File formatEDI820, NACHA, MT101, XML ISO 20022, EDIFACT, other
local standards (AFB, AEB, CBI, CNAB, etc.)4) SecurityEncryption
via PGP, PKCS#7 (3SKey), S/MIME 2013 Kyriba Corporation. All rights
reserved. PRIVILEGED & CONFIDENTIAL.21 22. Connectivity defined
File Formats Primary File Formats NACHADescriptionEDI 820High and
low value payments (North America, wires)SWIFT MT10xGlobal simpler
high value payments MT101/103/202XML 20022Global high value and low
value payments XML PAIN = payments message formatsMass low value
payments (North America, ACH and EFT)e.g. 2013 Kyriba Corporation.
All rights reserved. PRIVILEGED & CONFIDENTIAL.22 23.
Connectivity options When determining right connectivity and
formats Key questions you want to ask: Cost Experience Inventory of
connectivity Expertise with onboarding banks Ease (cost) of
integration Ability to support multiple methods/protocols 2013
Kyriba Corporation. All rights reserved. PRIVILEGED &
CONFIDENTIAL.23 24. Connectivity options What about my situation
affects the choice? Variables: # of banks Who/where they are Types
of payments (i.e. wires vs. high volume) # of payments 2013 Kyriba
Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.24
25. Connectivity options Whats best for me? Connectivity Method
FTPIdeal ScenarioRegional ProtocolConnecting with banks in those
regions (e.g. France, Germany for EBICS)SWIFT
MemberConcentratorOutside North America Large number of banks;
small volume of activitySWIFTNetLots of everythingHigh volume of
activity at domestic banks Often a combination of methods may be
best 2013 Kyriba Corporation. All rights reserved. PRIVILEGED &
CONFIDENTIAL.25 26. Summary Payment Centralization Improved
Visibility More Control Cost efficienciesSecurity &
Authentication Controlled workflows Secure transmission Digital
signaturesOther Payment Options Non-bank payments Mobile
paymentsConnectivity Methods FTP SWIFT Regional Protocols 2013
Kyriba Corporation. All rights reserved. PRIVILEGED &
CONFIDENTIAL.26 27. Kyriba Solutions Kyriba offers: Payment
centralization Kyriba manages the entire payment workflowExperience
Kyriba processes 1,000,000 transactions per dayExpertise Kyriba
onboarded more SWIFTNet customers than any third party
providerMonitoring Kyribas dashboards allow proactive monitoring of
all bank connectivity, including SWIFT trafficFind out more about
how you can achieve SEPA compliance
http://www.kyriba.com/kyribaSEPAsolution.pdfSee how Kyriba payments
solution can help you extend the accuracy and horizon of your cash
forecasts by visiting
http://www.kyriba.com/solutions/payment-management 2013 Kyriba
Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.27
28. Contact Kyriba Get in touch with us using the email address
below, or visit us at one of the following
addresses:[email protected] kyriba.com
twitter.com/kyribacorplinkedin.com/company/kyriba-corporation
kyriba.com/blog 2013 Kyriba Corporation. All rights reserved.
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