Cross-border transactions went live for small businesses and consumers

There has been a strong demand for small businesses and consumers to send fast and secure cross-border payments from their bank accounts for quite some time. SWIFT Go has provided that capability this past July, “enabling instant and frictionless transactions across its network of more than 11,000 institutions and 4 billion accounts in 200 countries.” SWIFT had 100 banks around the world sign up for SWIFT Go, with ten banks live: Deutsche Bank, JPMorgan Chase, and China Minsheng Bank to name few, representing 41 million low-value cross-border payments a year.

The SWIFT Go system also has the potential to enable greater financial inclusivity, supporting SMEs in emerging economies and individuals sending remittances internationally. According to SWIFT, the service leverages the high-speed rails of SWIFT gpi, which have transformed the speed and predictability of high-value cross-border payments, to strengthen the capabilities of banks to serve their customers in the high-growth small business and consumer segments. The payments sent via SWIFT Go are fast (with the fastest completing in seconds), secure, and predictable, with upfront transparency on fees stated by SWIFT.

“SWIFT Go has been enthusiastically received by institutions and their customers since the launch as it transforms the way SMEs and consumers make payments across borders through the banking system,” Stephen Gilderdale, Chief Product Officer at SWIFT said.

 

FX volatility in earnings for North American and European multinational corporations

Foreign exchange exposures among 1,200 multinational companies based in North America and Europe were detailed in Kyriba’s Currency Impact Report. It revealed US$27.87 billion in total impacts to earnings from currency volatility. In addition, the report stated, “the combined pool of corporations reported $23.62 billion in tailwinds and $4.25 billion in headwinds in the second quarter of 2021. North American companies experienced greater headwinds than their European counterparts, reporting $2.32 billion in FX-related negative impacts – a decrease of 153% from the previous quarter. European counterparts reported $2.32 billion in FX-related negative impacts, a decrease of 153% from the previous quarter. By comparison, European corporations reported $1.93 billion in negative impacts – a decrease of 45% from the previous quarter.”

Wolfgang Koester, Chief Evangelist for Kyriba, stated further that headwinds and tailwinds reveal the vulnerability North American and European multinational corporations’ revenues and earnings per share have to currency movements. Many corporations reported 10% or more of their earnings were a direct result of their currency gains or losses.

Below are the highlights directly from the October 2021 Kyriba Currency Impact Report, “a comprehensive report detailing the impact of foreign exchange exposures among publicly traded

companies. All companies analyzed in the report conduct business in more than one currency, with at least 15% of their revenue coming from nations located outside of their headquarters.”

• The average earnings per share (EPS) impact from currency volatility reported by North American companies in Q2 2021 held steady at $0.03 — three times greater than the recommended standard of $0.01 EPS impact.
• Publicly traded North American companies that qualified to be monitored in the Q2 2021 CIR reported a combined $22.93 billion in positive currency impacts, and $2.23 billion in negative currency impacts.
• Publicly traded European companies that qualified to be monitored in the Q2 2021 CIR reported a combined $686 million in positive currency impacts, and $1.93 billion in negative currency impacts.
• For the third time in four quarters, North American companies indicated the euro (EUR) as the most impactful currency, with 33% of companies referencing it as impacting revenues; the Canadian dollar fell to second place, with 26% of North American companies identifying it as impactful.
• The U.S. dollar (USD) remained the currency most mentioned as impactful by European companies on earnings calls for the fourth quarter in a row, followed by the euro and the Brazilian real ranking third.
• The top five industries that experienced the greatest impact from currencies in North America were (in ranked order): professional services, machinery, trading & distribution, healthcare equipment & supplies, life sciences tools & services, and biotech & pharmaceuticals.
• The top five industries that experienced the greatest impact in Europe were (in order): biotech & pharmaceuticals, healthcare equipment & supplies, chemicals, construction & engineering, electronic equipment, and instruments & components.

Koester stated the supply chain disruption and inflation will continue to test CFOs and treasurers’ enterprise liquidity strategies and application of best practices to protect EPS, drive growth, and reduce supply chain risk in the coming months. Furthermore, CFOs will be expected to demonstrate how to best optimize enterprise liquidity by utilizing tools such as cash forecasting precision methods and deliver multiple cash flow scenarios.

 

Barclaycard Payments, part of Barclay Bank PLC, partners with SAP to “widen payment acceptance capabilities and enhance procure-to-pay processes”

SAP has been a leading provider of business software solutions for many years. The ERP (Enterprise Resource Planning) system’s aim is to integrate all the different modules in the company with architecture that is robust, secure and customizable to another level.

To this end, SAP has partnered with Barclaycard Payments, part of Barclay Bank PLC. SAP notes, “Businesses will be able to optimize their online payments process, improve customer experience and take advantage of Barclaycard’s anti-fraud capabilities. The launch also introduces virtual cards and enables integrated options through SAP Ariba and SAP ERP. It enables corporate businesses to pay suppliers more quickly with the added benefit of extending payments terms to unlock further working capital.”

Today, any business signed up to SAP Upscale Commerce will be able to access Barclaycard Smartpay and take advantage of benefits including a frictionless customer experience and bolstered fraud defenses.

SAP described the SAP Upscale Commerce as a software-as-a-service (SaaS) commerce solution popular with mid-size, direct-to-consumer businesses. The platform is designed for mobile, providing users with a seamless experience across a wide range of devices. Integration with Smartpay will enable customers to convert more business online by removing friction from the payment process.

In addition, Barclaycard Payments is now offering virtual card services to businesses using SAP Ariba or SAP ERP software, giving them a simple end-to-end procure to pay experience. As a result, users will be able to minimize late payments to their suppliers and take advantage of early payment discounts. Using Barclaycard’s virtual cards on the platform will also enable SAP Ariba customers to have better control over ad-hoc purchasing and help unlock working capital through extended payment terms.

“The pandemic and a changing consumer landscape have impacted the way businesses want to make and take payments. Our ever-evolving partnership with SAP is a result of listening to our customers and clients and making sure we are providing them with the tools and capabilities to thrive under challenging circumstances,” said Nicole Olbe, MD of Barclaycard Payments Partnerships.