B2B Payments

What Does Basel III Actually Mean?

On January 1, 2015, Basel III will be implemented into the U.S. Previously, the public sector compensated banks with cash balances to receive services and credits for those balances. What exactly does this change mean? A recent Trade Financing Matters article highlighted the importance of the new legislation, and what it means for the future of banking.

One part of Basel III is called the Liquidity Coverage Ratio (LCR), which ensures that banks have the necessary on-hand assets to ride out short-term liquidity disruptions. Financial institutions hold an amount of highly-liquid assets, such as cash or Treasury bonds, equal to offset net cash outflows over a 30-day period. In 2015, the full 100 percent minimum coverage will also be in full force.

The news source explained that this impacts every bank business. However, businesses that traditionally used balances to offset fees, as well as organizations like Correspondent Banking and Trade Finance will be affected.

According to the news source, this is the perfect time for p-card implementation.

“Municipal governments will be ripe for p-card and other products as they look to extend terms with their suppliers to offset the significant fees they will need to pay,” the article read. “Already, governments aren’t the best payers in the world.”

“What’s Hot” is aggregated content. PYMNTS.com claims no responsibility for the accuracy of the content published by the original source.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

Click to comment