Cash management in 2022: digital and real-time treasury

to total retail sales is becoming material and is expected to go over 20% of all retail sales worldwide by 2024 with Asian countries leading the way, according to Statista. Scaling up the digitisation of treasury and cash management will be the bedrock required to harness this e-commerce growth and support 24/7 always-on business models. E-tailers are working to add new and localised mobile wallets and real-time payment methods to widen their digital customer base and grow their businesses. While doing so, there is a clear preference towards mobile and real-time payment methods vis-à-vis credit cards and cash on delivery payments. This preference is driven primarily by traceability, instant settlement capabilities, and the elimination of interchange and charge back costs. However, for adoption of real-time payments to continue to increase at the same rate in the coming years, consumers will need to be lured by loyalty offerings and rewards programmes similar to credit cards. These could include value adds like Buy Now Pay Later (BNPL) to support customer credit needs, QR codes, and Request to Pay (R2P) for improved controls. Industries leading real-time payment adoption Efficiency gains from real-time payments Tipping point for a real-time, digitised treasury Given the regulatory ‘payment amount’ restrictions on instant payment schemes in most markets, the usage to date has largely been for consumer-to-business (C2B, B2C) flows. This is, however, expected to change, given the planned increase in amount thresholds of real-time payments and RTP scheme roll outs. There is also an increased focus by central banks on building cross-border instant payment rails using interoperable distributed ledger technology (DLT). These changes are set to propel the business-to-business (B2B) usage of domestic and cross-border instant payments. This B2B usage coupled with increasing share of C2B digital sales is expected to make up a very material 2 | treasurytoday © January 2022

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