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European and North American corporates stung by US$20bn FX loss - Industry roundup: 22 November

European and North American corporates stung by US$20bn FX loss

Multinational companies experienced over US$29bn in total impacts on earnings from currency volatility in the second quarter of this year, according to Kyriba’s latest Currency Impact Report (CIR). The CIR studies the quarterly impacts of foreign exchange (FX) exposures among 1,700 multinational companies based in North America and Europe with at least 15% of overseas revenue. 

The combined pool of corporations reported US$20.15bn in FX-related headwinds and US$8.99bn in tailwinds in the second quarter of 2023, with North American companies reporting US$14.43bn in headwinds and their European counterparts reporting US$5.72bn in headwinds.

Publicly traded North American companies indicated the Canadian dollar as the most impactful currency, with 44.4% of companies referencing it as impacting revenues; the euro was second at 22.2%, and the Chinese yuan was third, with 16.7% of North American companies identifying it as impactful. The euro was cited as one of the most impactful currencies by publicly traded European companies on earnings calls.

The top five industries that experienced the most significant impact from currencies in North America were (in ranked order) machinery, trading and distribution, auto components, electronic equipment, instruments and components, healthcare equipment and supplies, and construction and engineering.

“CFOs have a long way to go to cost effectively manage FX risk to protect balance sheets, earnings and cash flow from currency swings,” shared Melissa Di Donato, Chair and CEO at Kyriba. “Staying vigilant for the remainder of the year and into next year should be a top priority to mitigate the currency effects from geo-political events, economic volatility and financial market concerns.”


Mastercard JV approved to begin domestic payments processing in China

Mastercard has announced that its joint venture entity, Mastercard NUCC Information Technology (Beijing) Co., Ltd., has received formal approval from the People’s Bank of China (PBOC) and the National Administration of Financial Regulation (NAFR) to commence domestic bankcard clearing activity in China.

In February 2020, the PBOC principally approved the application from Mastercard NUCC to begin formal preparations to set up a domestic bank card clearing institution in China. Since then, the JV has established standards, rules, structures and infrastructure in line with local regulatory requirements and obtained the required certificates for a local switch business.

In recent years, Mastercard has built a cross-border portfolio in China that includes tens of millions of bank cards and acceptance points across the country, helping power connectivity to the global economy and driving cross-border and inbound commerce in China. Earlier this year, Mastercard enabled inbound acceptance via Alipay and Tencent wallets so that international cardholders can pay safely and conveniently like a local at tens of millions of QR payment points when travelling around China.

“Mastercard NUCC is committed to being in China as an active partner, working to expand issuance and acceptance of Mastercard-branded products for the benefit of local businesses and consumers,” said Ling Hai, chairman of the board of Mastercard NUCC and co-president, International Markets at Mastercard. “As we ramp up our domestic operations, we look forward to working with customers and partners in China to harness technologies and innovations in a way that empowers local businesses and delivers the best payments experiences to people every day.”


Statrys rolls out Swift payment tracking for global corporates

Financial platform Statrys has launched its Swift Payment Tracking feature – a tool for real-time tracking of cross-border payments. The tool uses Swift GPI technology to offer end-to-end transaction visibility, faster international transfers, and automatic payment tracking. The firm says this will afford businesses the transparency essential for effective financial management.

This advancement streamlines the financial landscape, enabling clients to monitor their transactions with ease and accuracy. It offers real-time updates on cross-border transactions' status to give businesses greater control over their financial operations. The ability to track payments also brings efficiencies to cash flow management, which is particularly useful for companies operating on tight margins and schedules. 

A digitised proof of payment feature eliminates the need for manual proof of payment processes, which should simplify the complexities associated with international transactions. At the same time, corporates can also share a tracking link for outgoing payments, reinforcing transparency with their beneficiaries.


Standard Chartered and the IFC launch US$200m trade finance initiative in Pakistan

Standard Chartered Bank Pakistan has signed an un-funded risk-participation agreement with the International Finance Corporation (IFC). The US$200m PKR equivalent programme will see the IFC cover 50% of Standard Chartered’s risk against short-term trade and working capital funded loan facilities for corporate clients based in Pakistan.

Standard Chartered and IFC aim to leverage their long-standing relationship with export-based industries in Pakistan to generate foreign exchange inflows, which remain critical for the sustainable growth of Pakistan’s economy. These inflows will be made possible through the enhanced availability of trade and working capital loan facilities, including supply chain financing and sustainable finance product suites for large-scale manufacturers.

“This risk participation programme with Standard Chartered Bank is the first of its kind for IFC in Pakistan, designed to enhance access to finance and working capital to companies in economically lucrative sectors, as well as to small and medium enterprises that operate across their value chains,” commented Momina Aijazuddin, Regional Head of Industry at IFC’s Financial Institutions Group across the Middle East, Turkey, Central Asia, Pakistan, and Afghanistan. “We are confident that with this effort Standard Chartered will play an important role amidst current macro-economic conditions in Pakistan by catalysing job creation, trade, and productivity, as well as economic growth.”


Zuora and Avalara collaborate on integrated e-invoicing solution

Zuora, a monetisation suite for businesses, has expanded its partnership with cloud-based tax compliance automation firm Avalara to provide Zuora customers access to Avalara E-Invoicing and Live Reporting.

Countries worldwide continue adopting e-invoicing mandates and additional digital reporting requirements, such as live invoice data reporting and e-reporting of international sales and purchases. However, compliance is often complex and costly, as timelines and regulations vary by country. The expanded partnership between Zuora and Avalara aims to help equip companies to meet these requirements with an integrated solution.

Through the partnership, Zuora customers can set up global e-invoicing capabilities, access e-invoice exchange networks and government platforms, and support e-invoicing models by country or region. They can also monitor the status of e-invoices and set up archiving for e-invoices. 


LCI selects Salmon Software TMS

Salmon Software, a provider of treasury management systems, has announced that aviation company LCI is a new client. This contract adds to the TMS provider’s commitment to serving the aviation industry with financial solutions.

LCI operates across the commercial fixed-wing, helicopter and advanced air mobility sectors. Salmon Treasurer’s reputation as a sophisticated, efficient and effective TMS solution was a significant reason in LCI’s selection.

“Salmon Software’s reputation as a trusted, reliable and effective TMS provider in the aviation sector is well-deserved,” said Alan O’Rourke, Chief Financial Officer at LCI. “We believe that this collaboration will provide us with the best solutions, industry knowledge and expertise to meet our treasury needs as we grow our fleet and our business.”


Payhawk launches end-to-end spend management platform

Payhawk has announced the launch of its Purchase Orders system, designed to streamline procurement operations by integrating purchase requests, approvals, purchase order creation, three-way matching and the ability to pay in local or cross-border transfers in one seamless platform.

In the past, procurement processes have often involved tedious manual data entry, scattered documentation, and multiple tools. These inefficiencies can slow down business scaling and increase operational costs.

Payhawk’s entry into the Procure-to-Pay market aims to address these challenges. Building on its existing accounts payable solution, Purchase Orders allows for the streamlined creation and approval of purchase requests, two- or three-way matching between invoices, POs, and goods received notes (GRNs), and identification of discrepancies. The solution is designed to eliminate the time spent on manual data entry and approvals, reduce errors, duplicate payments and unnecessary costs, and provide an overview on committed spend.


Nexi and Microsoft join forces for enterprise digitisation in Europe

Nexi and Microsoft have strengthened their partnership to digitise payments in Europe, first announced in July 2022. The expanded partnership will see Nexi integrate its digital payment solutions (both in-store and online) within Microsoft solutions, in particular in the Commercial Marketplace, Microsoft's catalogue of solutions and products for developers and Independent Software Vendors (ISV) platforms, available in more than 100 countries and regions.

Through the partnership, ISVs will be able to provide enterprises and SMEs with vertical management solutions, which will allow them to integrate omnichannel payment acceptance within sophisticated purchasing experiences and business management tools. ISVs and software developers will be able to leverage Nexi's solutions. These include easy integration and the availability of features such as national debit circuits, scalability, security, and tailored partner support. This should allow ISVs to focus on the user experience and completeness of software solutions, with the PayTech managing complexities, including regulatory issues typical of the payments universe.

Microsoft will continue on its path of integrated solutions to support developers, for example, in artificial intelligence, working with Nexi to develop features for use cases such as embedded finance.

The two companies will launch joint go-to-market and communication activities, following a one-stop-to-digital approach, including partner evangelisation and technical training activities. The plan will start in Italy and extend to other critical European markets, such as Germany.

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