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From March to May 2020 the VDT conducted a survey on Payment Factories. The trigger for the survey were the numerous regulatory changes that have had a strong impact on the processing and optimization opportunities in payment processes.

The German law transposing the EU Payment Services Directive (PSD 2) initially did not take account of corporates’ existing payment factories, which would have meant that some company units would have become licensed entities that are subject to supervision by BaFin and additional capital requirements. On the basis of advocacy and engagement by the VDT with the supervisory authority BaFin, regulators issued a clarification that the implementation of PSD 2 was without prejudice to the “group privilege” that allows these internal payment factories of corporates to operate without being licensed and supervised by BaFin as payment providers.

The changeover to XML-based file formats, which was launched together with the introduction of SEPA is also an area of focus in treasury. Instant Payments and the objective of using globally usable file formats through the Common Global Implementation (CGI) initiative have challenged treasurers to review implemented system structures and technologies.

A few years ago, mainly very large and internationally represented corporates were concerned with the optimization of payment transactions due to the underlying quantity structure. Today medium-sized and smaller companies are also interested in a “factory for payment transactions”. The objectives have shifted from reducing the costs of cross-border transactions through centralized processes towards achieving greater transparency and security. In parallel, the desire to increase efficiency through automation has remained the same.

In the past, payment transactions could not be carried out outside the company under any circumstances. Today, payment hubs in the cloud are increasingly in demand and make life easier for many cash managers. That said, an increased use in online means has also created new risks which need to be anticipated and prevented.

The results of the VDT survey will be shared later this year together with a more in-depth presentation and discussion of the issues raised as part of the survey in a series of webinars and digital workshops.

Christoph Budde
Member of the Work Group Cash & Liquidity
Association of German Treasurers

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