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Design Group secures US$125m refinancing deal - Industry roundup: 26 June

Citi brings multi-bank target balancing to Brazil

Citi has launched its multi-bank target balancing solution in Brazil. The solution allows corporate clients to automatically concentrate all the funds collected and maintained in other banks within their Citi account. 

Account holders can digitally define and manage the amount they want to keep in their bank accounts. Citi will then operate these accounts based on the rules defined by the corporate. Citi says that companies will no longer have to allocate time and resources to manually execute the movement of funds and seek approvals, freeing up time to dedicate to other tasks and mitigating operational and fraud risks. 

The solution does not impact how customers pay the organisation. Once a corporate client has implemented multi-bank target balancing, Citi will periodically obtain information on the balances of accounts the firm holds with other banks included in the structure. Then a comparison will be made to the parameters established by the company. With the result of this comparison, Citi will then generate the appropriate debit or payment instructions to the other banks, ensuring the correct funds are transferred to the Citi account automatically. 

The bank says that account management will also be easier as the solution enables corporates to identify and reconcile transactions with a unique reference that appears in the account summaries or through the reports in CitiDirect.  


Design Group secures US$125m refinancing deal

HSBC Group has announced its role in a US$125m refinancing deal for IG Design Group plc (Design Group), an international business with its global headquarters in Newport Pagnell, Buckinghamshire. Its US operations are headquartered in Atlanta, Georgia, and it operates a large factory in South Wales alongside other significant facilities in the US, the Netherlands and China.

On the HSBC side, the deal was spearheaded by HSBC USA, structured by HSBC USA’s Asset Based Lending team, and supported by HSBC UK, with the bank providing a total of US$75m in funding. The remaining US$50m was provided by NatWest.

The new asset-based revolving credit facility will allow Design Group to support its working capital requirements throughout the year and meet customer demand around peak seasonal gifting times.

The facility also sees the business switch from a UK-based to a US-based funding line, where Design Group generates the majority of its revenue, with an innovative cash management structure that allows for funding of the Group’s global operations.

“This deal represents an important milestone in our journey to first restore our pre-Covid performance, and then grow beyond,” said Design Group CEO Paul Bal. “HSBC’s international reach has enabled us to ensure global funding for the Group through our biggest market, helping us to leverage our scale and capabilities for future growth.”


J.P. Morgan begins euro blockchain payments for corporates - Bloomberg

According to a report by Bloomberg, J.P. Morgan has recently expanded the use of its blockchain-based settlement token, JPM Coin, to facilitate euro-denominated payments. 

The implementation of euro payments on JPM Coin was launched on Wednesday, as stated in an interview with Basak Toprak, the head of Coin Systems for Europe at JPMorgan. The German technology company Siemens conducted the first euro payment on this platform.

Since its establishment in 2019, JPM Coin has processed transactions worth over US$300bn. Through this system, J.P. Morgan enables its institutional clients to conduct wholesale payments between accounts worldwide, using blockchain technology as the underlying infrastructure.


Jack Henry launches real-time payments fraud feature

Jack Henry has announced the launch of Payrailz Fraud Monitor. This cloud-native, AI-based Payrailz Digital Payments Platform feature provides real-time fraud detection when payment transactions are initiated. The tool supports person-to-person (P2P) payments, consumer and business bill payments, and account-to-account (A2A) outbound external transfers powered by the Payrailz Digital Payments Platform.

Payrailz Fraud Monitor leverages AI and machine learning to simultaneously detect and weigh multiple fraud attributes and indicators, including known and previously unknown fraud instances and patterns, to generate an aggregated, actionable score as each payment transaction is scheduled. 

Financial institutions can configure score ranges and other thresholds based on their unique risk tolerance, and the AI-enabled fraud engine continuously learns to detect evolving and emerging fraud patterns. Based on behavioural analytics, Fraud Monitor can substantially mitigate payment fraud, including account takeover (ATO), when a fraudster takes possession of an authentic user's credentials and attempts to quickly move funds out of their accounts.

Bank of America joins sustainable aviation fuel programme

American Express Global Business Travel (Amex GBT) and Shell Aviation have announced that Bank of America is the first financial institution to join their sustainable aviation fuel (SAF) programme. The programme launched in 2022 with 1 million gallons of SAF available for corporate customers – enough to power almost 15,000 business trips from London to New York. Operated on the Avelia platform, it is one of the world’s first blockchain-powered digital SAF book-and-claim solutions for business travel.

SAF is one of the aviation industry’s most promising pathways to decarbonise air travel. However, today SAF makes up less than 0.1% of available aviation fuel and is two to eight times more expensive than conventional fossil-based jet fuel.

Amex GBT and Shell Aviation’s programme aims to unite the aviation value chain to scale SAF supply and demand to benefit the entire ecosystem. The programme continues to gain momentum, with participants also including Aon, Cathay Pacific, JetBlue, and Delta.

The programme connects airlines with the buying capacity of businesses willing to share SAF’s ongoing price premium – drawing from Amex GBT’s over 19,000 customers from 140 countries. Corporations can reduce their business travel emissions on a lifecycle basis and work towards science-based emission targets by committing to purchase SAF environmental attributes. These commitments support the ongoing market development of SAF and introduce more to the aviation fuel network at affordable prices, as the costs are shared across the value chain.


ACI Worldwide unveils real-time payments solution for merchants in Europe and UK

ACI Worldwide has launched ACI Instant Pay - a real-time payments solution that enables merchants to accept instant online, mobile and in-store payments via a simple API integration with ACI Payments Orchestration Platform - in Europe and the UK.

The move comes against the backdrop of a regulatory push in Europe. Banks across the eurozone must comply with a proposed European Commission law, mandating financial institutions across the Single Euro Payments Area (SEPA) countries to offer instant payments under the SEPA Instant Credit Transfer scheme at the exact cost or lower-than-standard credit transfers. The new regulation aims to unlock the benefits of instant payments for European economies.

The UK has also embarked on a modernisation journey of its Faster Payments scheme via the New Payments Architecture program. Consequently, more merchants are expected to adopt instant payments and reap the benefits they offer for their business and customers.

Clearing funds immediately gives merchants more significant control of cash flow. Merchants can accept payment for their goods and services without incurring interchange fees, which can reduce operational costs. Instant payments are also crucial for e-commerce merchants that rely on fast delivery to be competitive. Payment reaches their account instantly with no settlement delays or chargebacks. 


SAP Fioneer launches tailored SME banking offering

SAP Fioneer has announced the launch of its Fioneer SME Banking Edition. The solution is designed to enable banks and neobanks to offer banking capabilities in a digital-first and data-driven approach tailored to the financial needs of small and medium-sized enterprises (SMEs) – a historically underserved market segment.

Fioneer SME Banking Edition works by connecting banks to external data sources, such as open banking, central company registry, e-commerce and ERP data, to form actionable insights that significantly help SMEs to stay ahead. This should give SMEs clear transparency about cash flow, provide insight to the banks, and enable intelligent funding options, offering more variety and increasing the number of businesses banks can serve.

SAP Fioneer says the solution integrates with any core banking system. Banks can offer services beyond traditional banking products, such as loans and deposits, through embedded services and more robust financial advice directly for SMEs. The solution can also be easily integrated and connect to ecosystems via pre-configured APIs.

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