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Industry roundup: 13 November

U.S. Bank connects with Bottomline to digitise the invoice-to-pay process

U.S. Bank has introduced AP Optimizer, a digital tool that simplifies and transforms invoice processing and payments for businesses within a single system. Additionally, the bank says that organisations can reduce costs, create rebate opportunity and better manage working capital.  

“AP Optimizer is a big win for our customers and is part of our strategy to provide an integrated offering to manage accounts payables,” said Jeff Jones, head of Corporate Payment and Treasury Solutions for U.S. Bank. “Our customers will have the ability to transform workflows and payments to a digital solution with improved visibility, embedded security and fraud mitigation tools.” 

AP Optimizer connects businesses to the established Bottomline Paymode-X network of 425,000 suppliers. Businesses can start paying suppliers in the network immediately upon implementation. By integrating with enterprise resource planning (ERP) platforms, customers can eliminate manual processes through the migration to electronic payment methods such as virtual cards, ACH, and wires, while also having an opportunity to earn rebates. 

“The combination of connecting our organisation with a large B2B electronic payment network, and the ability to have an integrated payables solution offering both virtual pay and ACH leveraging our existing ERP system, made AP Optimizer the obvious solution for us,” said Mitchell Watson, vice president and CFO of Carson Tahoe Health, which participated in a pilot of AP Optimizer and will soon be fully implemented. “Not only will we see the benefit of eliminating our paper processes, but U.S. Bank will handle the heavy lifting for us with vendor outreach and enrolment. And, we gained peace of mind from built-in fraud protection delivered by a trusted bank partner.”

 

Coronavirus amplifies some key corporate secular trends

The coronavirus pandemic is accelerating digital transformation and supply chain shifts but has stalled the move to a low-carbon economy, according to research from Fitch Ratings. Every corporate sector reviewed in a new report faces some impact on key credit drivers (industry structure, growth trajectory, operating efficiency, regulatory shifts, capex intensity and financing availability) in the next few years from at least one of these trends.

The pandemic is accelerating digital transformation across most sectors as issuers aim to meet objectives around safety, operational resilience and supply-chain recalibration. Furthermore, consumer behaviour is shifting with wider adoption of e-commerce and rising online activity. The impact on credit profiles from digital transformation will intensify in the coming years as more sectors integrate digital applications. Operational efficiency will be the credit driver most widely affected. Regulatory shifts are also notable as oversight intensifies.

The pandemic has stalled but not derailed the low carbon transition, which will become a material credit risk in the long term. Some developed markets are targeting a green recovery and have incorporated environmental conditions into their pandemic-related support schemes. However, elsewhere, particularly in emerging markets, authorities may prioritise a near-term economic recovery over a reduction in emissions. Regulatory shifts and capex intensity will be the leading credit drivers associated with the low-carbon transition for most corporate sectors.

The pandemic has accelerated companies' efforts to increase supply-chain resilience. Furthermore, government policies encourage "near-shoring" or "re-shoring" as global trade relations become strained amid rising protectionist sentiment. However, credit risks associated with supply-chain recalibration are more transient and centre around regulatory and policy changes. Fitch also expects this trend to be the least impactful of the three in the long term. 

 

Vocalink selected as Canada's real-time clearing and settlement solution provider

Payments Canada has announced the selection of Mastercard’s Vocalink as the clearing and settlement solution provider for the country’s new real-time payments system, the Real-Time Rail (RTR). This announcement follows an extensive procurement process that included the Bank of Canada and the Department of Finance.

The partnership will draw on Mastercard’s expertise, and its next-generation real-time payments technology to provide the infrastructure and services to support the clearing and settlement for the RTR. The clearing and settlement solution will meet all Payments Canada requirements, including support for the ISO 20022 messaging standard, and will comply with the Bank of Canada risk management standards for prominent payment systems.

Operated by Payments Canada and regulated by the Bank of Canada, the RTR will allow Canadians and Canadian businesses to initiate payments and receive irrevocable funds in seconds, 24/7/365. Underpinned by the ISO 20022 data standard, the system will support payment information travelling with every payment and act as a platform for innovation, enabling the introduction of new and enhanced payment products and experiences. The RTR is expected to launch in 2022.

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