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Industry roundup: 28 January

Innovative supply chain financing and WCM: SAP acquires Taulia

SAP agreed to acquire a majority stake in privately held US financial technology company, Taulia, a fintech provider of working capital management solutions. The partnership aims to make liquidity more accessible to businesses and improve cash flow. This acquisition further expands SAP's business network and enhances its solutions. Within the SAP group, Taulia will function as an independent company maintaining its own brand under the direction of Cedric Bru, CEO, Taulia, and Luka Mucic, SAP CFO as Chairman of the Taulia board.

Taulia makes early payments available through supply chain finance, dynamic discounts and accounts receivable finance. With the robust growth in the working capital management market, demand for early payments is increasing significantly due to difficult economic conditions and supply chain disruptions. Known for cutting-edge technology, Taulia has one of the largest portfolios of platforms and solutions in the working capital management market. Taulia has built solid financial partnerships to provide the necessary funding, including J.P. Morgan, UniCredit and other prominent financial institutions.

Luka Mucic commented that Taulia provides financial flexibility and stability to businesses, leading to resilience in supply chain. Furthermore, the combination of Taulia’s in-depth working capital management expertise and SAP’s extensive CFO solutions, including core business software and business network solutions, will help companies improve their financial positions while taking advantage of growth opportunities.

The partnership between Taulia and SAP has demonstrated a profound integration with SAP solutions. Over 80% of Taulia’s customer base operates the SAP ERP system. Some of the joint customers include Airbus, Nissan and AstraZeneca. SAP will strengthen its integration with Taulia for both the SAP Business Network and the CFO Solution Suite, and it will be at the core of SAP's working capital management portfolio. Taulia's solution will continue to be available on its own, allowing non-SAP customers to benefit from Taulia's portfolio as before. The partnership with SAP will help Taulia unleash the liquidity of trapped supply chains and help businesses prosper effectively and quickly.  

Indonesia revolutionizes its financial ecosystem towards a real-time digital payment system

Digital payments have become popular in Indonesia and are widely used by more than half of the population. Bank Indonesia (BI), the central bank of Indonesia, and ACI Worldwide (ACI), a global provider of real-time and digital payment solutions, implemented BIFAST, the first real-time payment infrastructure in the country, in less than nine months.

BIFAST promotes retail payment services for the general public and is at the heart of ISP 2025. It aims to transform the payment infrastructure, integrate the digital economy and the financial sector, and meet the public's demand for a fast, simple, secure, cost-effective and reliable payment system. Additionally, BIFAST provides the infrastructure to support a resilient and competitive financial system while strengthening Indonesia's regional centre of trade and investment. These initiatives are part of Indonesia's ongoing digital modernization, creating a fully integrated environment for the country's payment systems industry, digital banking, fintech, e-commerce, consumer base and financial recovery.

The massive venture between BI and ACI involves 135 banks, merchants and payment service providers, making it one of the world’s most noteworthy real-time payment initiatives. The country’s first initiative phase has already been implemented at more than twenty banks throughout the country, providing active financial institutions with access to a variety of key services, including:

  • 24/7 real-time credit transfers with real-time transaction settlement at the bank and customer level.
  • Unique identifier (proxy address) to simplify, protect and facilitate payments.
  • Integrated real-time fraud detection. 

ACI's low-value, real-time payment technology that powers BI's core infrastructure centre enables more than 100 payment systems to connect. In addition, ACI provides instant access to its core real-time infrastructure, laying the foundation for future services such as Request to Pay (R2P), eMandate, direct debit and cross-border payments.

Leslie Choo, Managing Director of Asia Pacific countries (APAC), ACI Worldwide, commented that ACI and Bank Indonesia have worked together to create one of the world’s safest and most promising real-time payment systems. This dynamic payment transformation will help accelerate Indonesia’s digital economy and draw millions of non-bank account citizens into the formal financial sector, added Choo.

The Indonesian Payment Systems Blueprint 2025 Initiative includes:

  • Strengthening the integration of the nation's digital economy and finance.
  • Securing links between fintechs and banks.
  • Finding a balance between innovation, consumer protection, integrity and stability, and fair competition.
  • Protecting the national interests in cross-border use of the digital economy and finance by requiring domestic settlement of all domestic transactions and partnerships for all foreign parties.

With digitalization, technology and globalization quickly transforming people's lifestyles, various Southeast Asian countries are accelerating the adoption of digital banking by making online transactions readily available to their citizens. According to Roland Berger, a consulting firm, banks in the region will reduce their branch offices by 18% by 2030. Reductions will be made in Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore and Thailand.

Indonesia is the most recent in a series of Southeast Asian countries modernizing the their payment infrastructure to strengthen the digital economy and accelerate growth. As traditional payment systems continue to hamper mature market innovation, countries in the region are taking massive steps forward from outdated technology, creating a strong domestic core infrastructure as the foundation for real-time digital and cross-border payments.

Corporate cash management automation: Capital One and Trovata partnership

In efforts to accelerate the digital transformation process for corporate customers, Capital One and Trovata, a fintech company in automating treasury workflows through multi-bank API data aggregation for corporate finance and treasury teams, established a distribution partnership agreement. This integration will enable Capital One to market and introduce Trovata's cash management system to new and existing commercial and corporate banking customers.

Capital One, utilizing Trovata's next-generation platform, will bring a whole new cash management experience to its commercial customers, with greater visibility and insight into multi-bank account balances and historical cash flows, as well as powerful tools that automate cash forecasting. Phil Beck, Head of Treasury Management, Capital One, commented that Trovata’s innovative products provide data-driven workflow automation that supports digital transformation to help clients manage cash flow efficiently and faster.

According to the press release, Trovata is the first fintech to aggregate global corporate banking data via APIs with many of the world's largest financial institutions. As a seamless multi-bank intermediary between customers’ banks and financial information, Trovata provides clients with a better way to manage cash effectively. Brett Turner, Founder and CEO, Trovata, stated that real-time intelligence and automation support cash management, and that the opportunities to drive digital transformation with Capital One are significant.

Malaysia and Indonesia launch cross-border QR payment link

Central Banks of Malaysia and Indonesia introduced a cross-border QR payment link enabling immediate, safe and effective cross-border payments between the two countries. Bank Negara Malaysia (BNM) and Bank Indonesia (BI) commented that consumers in both countries will be able to initiate payments by using the Quick Response Code Indonesian Standard QR code or DuitNow displayed by offline and online retailers. According to banks, the cross-border QR payment introduction is the beginning of a pilot phase that paves the way for a full commercial launch in the third quarter of 2022. This collaboration will be expanded to include cross-border remittances enabling users from both countries to initiate real-time funds transfers.

BNM’s Deputy Governor, Jessica Chew Cheng Lian, stated that phase two of the QR payment linkage between Malaysia and Thailand is live this week. Additionally, these innovative developments demonstrate the creation of a quick and effective retail payment system in the ASEAN network. Consumers and businesses will benefit from the accelerated digital transformation and financial integration, added Lian.

Doni P. Joewono, Deputy Governor, Bank Indonesia, further reinforced that this initiative connects cross-border payments by linking the domestic QR codes of both countries, demonstrating another milestone in Indonesia's payment system plan 2025. Joewono added that the cross-border payment capabilities provide users more payment options, supporting trade and investment digitization, and promote widespread use of local currency settlement (LCS) frameworks. By using a direct list of local currency exchange rates provided by the cross-currency dealer banks specified under the LCS framework, transaction efficiency and costs will be improved.

According to the press release, payment connectivity will reinforce the close economic relationship between Malaysia and Indonesia and support a post-pandemic economic recovery. As overseas travel resumes, the central bank said tourism will become an important sector that will greatly benefit from this service. Prior to the pandemic, they found that significant travel between the two countries took place, with an average of 5.6 million people arriving annually. Individuals working abroad will benefit from accelerated, less-costly and more transparent cross-border remittances. This initiative is also in line with the G20 roadmap for improving cross-border payments developed by the Financial Stability Board and other international organizations.

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