Citi Perspectives Fall 2023: Transforming Treasury

14 | Treasury and Trade Solutions Citi Perspectives The global payments transformation: Where next? The world of payments is evolving rapidly, with different regions progressing at different rates. Citi’s Payments and Receivables Heads fromaround the globe share their views on how the payments transformation is being realized, how companies can benefit, and what this evolutionmeans for treasurers. The global payments landscape is undergoing a seismic shift. As Mark McNulty, EMEA Head of Payments and Receivables, observes: “Sometimes, transformation is used as a bit of a buzzword — but you can’t look at the payments landscape at the moment and not articulate what’s happening as a transformation.” This transformation is multifaceted. One is the shift toward real-time payments. As consumer expectations have evolved, people increasingly expect 24/7 availability and the ability to execute transactions in real time, which is being matched by the proliferation of instant payment schemes around the world. With the growth in e-commerce, meanwhile, more companies are moving to direct-to-consumer models, which require them to accept multiple forms of payment. At the same time, developments such as the continuing adoption of digital wallets and the rise of QR codes and APIs are presenting new opportunities to move money quickly and conveniently, while transmitting data that supports rapid reconciliation. A further aspect of this transformation is the development of the competitive landscape, as fintechs create products that are changing how payments are viewed by the entire ecosystem. “We used to be asked a lot about whether fintechs were a competitive threat to banks — less so now,” says Sanjeev Jain, APAC Head of Payments and Receivables. “But in the last few years, the growth of fintechs has been very positive: many fintechs specialize in niche areas, and in user experience, which is a net positive for the financial services industry. I think partnership has become a bigger theme than competition.” Drivers of change The arrival of the COVID-19 pandemic in 2020 was an important catalyst for the adoption of many of these developments. “Some of our clients, in markets where checks are common, had checks sitting in their offices