How do you optimize your payment settlement cycle for cash flow?

Consider the payment methods you offer to optimize your cash flow cycle. Electronically processed payments like ACH transfers and credit cards generally settle faster than traditional checks. Additionally, explore offering early payment discounts to incentivize faster settlements from customers. This can significantly improve your cash flow #cashflow #payments #optimization

As a Payments product manager, I'd optimize payment settlement with: - Real-time processing (e.g., instant bank transfers) - Automated reconciliation (e.g., AI-powered matching) - Predictive analytics (e.g., forecasting cash flow) - Intelligent routing (e.g., optimizing payment channels) - Digital invoicing (e.g., electronic bills) - Payment tracking (e.g., real-time updates) - Fraud detection (e.g., machine learning-based alerts) - API integration (e.g., seamless bank connections) - Cash flow forecasting (e.g., predictive modeling) - Mobile payment acceptance (e.g., in-app payments) These features streamline processing, reduce errors, and improve cash flow management, enabling businesses to manage payments efficiently!

Choose a payment method that: - Provides near real-time settlement. - Is cost-friendly with transparent charges. - Ensures security, preferably through a licensed and regulated company. - Allows negotiating settlement period. Settlement cycles differ: - Credit cards typically take T+1 days due to intermediaries and chargeback risks. - Bank transfers and e-wallets usually settle within hours to a day. - Account-2-Account (A2A) payments either closed loop or by using Open Banking infrastructure offer Realtime settlement, no chargebacks due to biometrics, and reduced processing fees. alternative payment methods, such as PIX in Brazil, Naqui in Colombia, KHQR in Cambodia and UPI in India, Offers for almost immediate settlements. #KHQR

So, to get cash flowing more efficiently, I'd try a bunch of different things: - Get payments settled in real-time with RTP - Use blockchain for super secure and transparent transactions - Connect payments seamlessly with APIs - Standardize messaging with ISO 20022 - Predict cash flow with fancy forecasting tools - Automate payment processing to save time and reduce errors - Explore financing options like factoring and supply chain finance - Visualize payment data to make sense of it all By doing all this, companies like Amazon can get paid faster, reduce processing times, and keep their cash flow in check - which means more liquidity and a competitive edge.

Payment methods can vary by market, so it's essential to choose the options that best suit your customers' preferences. Focus on the most popular methods and avoid those with limited representation. Additionally, be mindful of settlement delays and installment payments, which are particularly important in markets like Mexico and Brazil. The right payment method is the one you customers prefer!

Squeeze more from your cash flow by optimizing settlements! Negotiate faster processing times with your payment partner. Explore lower fees for quicker settlements and consider batching transactions strategically to optimize processing costs. Every day counts! #b2b #cashflow #payments #optimization

In summary, businesses should consider transaction costs and customer preferences to choose the most suitable payment methods, optimizing their business model accordingly. Business Models: Retail and E-commerce: Prefer UPI and e-wallets for their low cost and speed, enhancing customer satisfaction. Service Industry: Often uses credit cards despite higher fees for convenience and customer preference. B2B Enterprises: Favor NEFT/RTGS for large, secure transactions with predictable costs. SMEs and Startups: Opt for IMPS and UPI for their low fees and quick settlement, aiding cash flow management.

It is not just about getting a better rate. You need to share all the challenges with your payment partners an their job is to then work with you to understand where their products can benefit your whole business. Incremental gains on processes can return much more than a couple of basis points on the pricing.

Seek to understand which pricing model is best for you. Interchange ++ (IC++) or blended. If your customer base is wide ranging (consumer / Commercial / Domestic / International) The scheme fee's can vary considerably. Domestic only traffic may benefit from the IC++ model. Rolling reserves are put into place to provide an additional level of protection for the processor based on the risk level of the business. Negotiate these down or make sure the terms of the reserve are clear and when funds will be released.

Work with your payment processors to negotiate better terms for settlement periods. Faster settlements might come with higher fees, but the improved cash flow can justify the cost.

For increased efficiency and accuracy, it is crucial to automate the payments reconciliation process and ensure your payments platform integrates with downstream systems accordingly. Also, automated recon leads to accurate financial reporting and compliance to regulations and YE audit minimizing the risk of human errors leading to costly investigations.

Automating your payment reconciliation process is crucial for optimizing your cash flow cycle. Automation tools can streamline and speed up the reconciliation process, reducing manual errors and ensuring that payments are processed and settled quickly. This leads to faster availability of funds and better cash flow management. By using software to automatically match payments with invoices and update your records in real-time, you can significantly cut down the time and effort required for reconciliation, ultimately enhancing your financial efficiency and stability.

Speed up your cash flow by optimizing your payment settlement cycle. Focus on invoicing promptly, offering early payment incentives, negotiating longer payment terms with suppliers, and automating processes to minimize delays. #cashflow #payments #efficiency

In India's payment ecosystem, Mastercard and Visa offer solutions to streamline payment reconciliation, ensuring accuracy and efficiency. Both networks provide comprehensive transaction data and reporting tools that integrate with accounting systems. They support automated reconciliation through APIs, enabling businesses to match payment records with bank statements seamlessly. Their platforms also handle multiple payment methods and currencies, reducing manual labor and errors. By leveraging these tools, businesses can automate workflows, detect discrepancies quickly, and generate detailed reports, ultimately saving time and resources and speeding up the payment settlement cycle.

Find a provider who provides integration to accountancy tools such as QuickBooks and Xero. This alongside a robust and comprehensive dashboard will enable you to monitor and manage your payment reconciliation and also free up time for the finance teams.

This is especially challenging within emerging markets with the added economic volatility from high inflation and fluctuating FX rates. A few tactics I’d recommend to keep cashflow on track; -Partner with multiple PSPs to mitigate single-provider dependencies -Opt for PSPs that offer faster settlement cycles. In Africa, T+1 is standard, but some PSPs are open to same-day settlement terms if the volume justifies it. -Maintain local currency accounts in the markets you operate to dodge high conversion rates. -Automate reconciliation processes to quickly resolve discrepancies. -Develop routine cash flow forecasting models that factor in settlement times, fees, and currency fluctuations.

Automation is definitely the way to go. Once the process is in place and the information is shared with the appropriate actor then decision can be made towards an optimal cash flow operation. Exceptions can be handled automatically also and then the manual or supervised interactions are reduced to optimize the process.

More and more acquirers are seeing T+1 as standard which 75% of merchants are not aware of and are still on T+3 meaning they are waiting an extra 48 hours for their settlement. Quicker settlement means quicker access to cashflow. Always review with your acquirer but it is based on a few things: - Chargebacks - Fraud - Financial stability

Speed up your cash flow by tightening your payment cycle. Focus on invoicing promptly, offering early payment incentives, and negotiating longer terms with suppliers. Automate processes to minimize delays and keep your cash flowing smoothly. #cashflow #payments #efficiency

Do you know what your current settlement timelines are with your acquirer? Settlements on average are moving from T+3 to T+1 (depending on your acquirer) I imagine most businesses have not spoken to their acquirer to understand if this can be reduced to help improve cashflow.

Rev up your cash flow by streamlining your payment cycle! Review and improve internal processes to minimize delays. Focus on faster invoicing, early payment discounts, and extended supplier terms to optimize the flow of funds. #cashflow #payments #optimization

Speak to your payment providers. Understand your acceptance rates, understand your decline reasons and understand how you bench to your peers. The job of your payment provider is to help improve on all of them and they have the data to show you how.

Understand your existing settlement terms with your payment providers. It was T+3 as standard for a very long time but many acquirers are now moving to T+2 when setting up new customers. I would also push for T+1 if possible. Many businesses are now also looking at Open Banking for realtime settlements. This is 24/7 365 days a year that creates immediate cashflow to a business.

Understand what is causing you the most issues when it comes to your payment processing. Is it the settlement timescales cart abandonment rate offering the right payment methods to your target audience? You should be able to review this sort of data if you have the right tools either from your payment provider or a third party source. If things are unclear your payment partner should be there to advise and help you become more efficient.

Regularly reviewing and improving your payment processes is vital for optimizing your cash flow cycle. Conduct audits to identify inefficiencies and bottlenecks in your current system. Streamline workflows by eliminating redundant steps and automating where possible. Stay updated with the latest payment technologies and integrate them to enhance speed and security. Training your staff on best practices and updating policies to reflect new improvements can also lead to more efficient payment handling. By continuously refining your processes, you ensure quicker settlements and better cash flow management.

Validate Account and Bank Details: To reduce errors and ensure accurate bank details, implement APIs that integrate with global banking databases, such as IBAN validation services. These can automatically check and correct account numbers and bank codes at the point of entry. Enrich Payments Data in ERP: Enhance your ERP systems by integrating advanced data management tools that can automatically update and enrich payment data. Consider using middleware that can synchronize data between your payment processing platform and ERP for real-time accuracy. Routing Payments Efficiently: Utilise intelligent routing platforms that can determine the most cost-effective and fastest routes for both cross-border and domestic transactions.

Shorten your cash conversion cycle for a cash flow boost! Focus on invoicing promptly, offering early payment incentives to nudge customers, and negotiate extended payment terms with suppliers. Every day counts! #cashflow #payments #optimization

The Indian payment ecosystem is diverse and advanced: 1. UPI: E.g., using Google Pay to buy groceries with instant settlement. Popular for its speed and low fees. 2. Credit/Debit Cards: E.g., using a Visa credit card online with T+2 days settlement. Widely accepted despite higher fees. 3. E-wallets: E.g., using Paytm for a cab ride with funds settled within a day. Favored for small, quick transactions. 4. Bank Transfers (NEFT/RTGS/IMPS): E.g., receiving freelance payment via IMPS instantly. IMPS is real-time, NEFT/RTGS for larger transfers. 5. Bharat QR: E.g., paying a street vendor by scanning a QR code for instant payment. Accessible for small merchants. 6. AePS: E.g., withdrawing cash using Aadhaar and fingerprint.

Regularly monitor key metrics like DSO, payment processing times, and average settlement periods. This allows you to identify areas for improvement and track the effectiveness of your cash flow optimization strategies. Collaborate with banking partners: Work closely with your banking partners to explore services like supply chain finance or dynamic discounting programs. These solutions can help optimize your payment settlement cycle by aligning the interests of buyers and suppliers. Explore factoring or invoice financing options: Consider working with factoring companies or invoice financing providers like BlueVine or Fundbox. They can advance you a portion of the invoice value upfront, improving your cash flow