B2B Payments

Citi: Turning Digital Payments Acceptance Into A Corporate Cash Management Play

As merchants go global, the pressure grows for payment capabilities to localize. That is to say, as organizations expand on an international scale and reach new customers, those businesses must allow consumers to pay the way they want for the optimal end-user experience.

With the impending launch of Spring by Citi, Citi’s Treasury and Trade Solutions (TTS) is increasingly incorporating the consumer payments experience into its broader B2B treasury management and transaction banking offering as it moves to support its institutional clients in their own journeys to meeting customer payment demands.

As an expansion of TTS’ offerings, Spring by Citi pulls consumer-facing payment tools into the broader arena of back-office cash management in a B2B2C business model of transaction banking. As Manish Kohli, global head of payments and receivables at Citi, told PYMNTS’ Karen Webster, the service is a direct response to changing demands from institutional clients as they seek new ways to wield payments to connect with their customers around the world — and to tie that customer connectivity into the rest of their back-office treasury management strategies.

Direct-to-Consumer

“What’s really happening is that a lot of our customers are looking at changing their business models,” Kohli explained. “The large underlying trend is, instead of going through the usual distribution chain, they want to go directly to consumers.”

As organizations — particularly technology firms in the services market — expand across borders, customer bases proliferate and diversify. As a result, new challenges emerge in their ability to nurture customer engagement and facilitate a positive payments experience.

Increasingly, these businesses are looking at the end user as an individual client to address that challenge — a departure from the historical trend of anonymization and segmentation of customer populations that can happen when merchants rely on a traditional distribution channel to accept payments.

“We’ve seen some of these trends accelerating from large institutional clients,” noted Kohli, adding that in the last year or so, these clients have begun searching for strategies to “be a part of this new way in how we engage with our consumers.”

Although the demand for direct consumer payment acceptance is on the rise, Kohli said Citi expects many institutional clients to consider this capability as one of several channels that facilitate the merchant-to-consumer payment relationship.

“Traditional customers will go through multi-layer, multi-channel distribution channels, and this is one channel we’re seeing them adopt,” he explained. “On the other side, we have some customers for whom this is the only way they want to engage with their customers. Many of the digital natives are not in the product segment, but in the services segment. Effectively, this is their go-to-market strategy.”

Localizing Payments

As organizations look to deepen their customer relationships, payments — in particular, the ability to accept a range of local payment methods — are an increasingly important component of that process. Kohli pointed to two pillars of Spring by Citi’s strategy: consistency and payments ubiquity.

“Payment ubiquity, in this context, is the desire of institutional clients to say, ‘We don’t want our customers to change the way they pay just because it suits us, without taking into consideration what works for them,’” he explained.

That means being able to accept credit cards, eWallets, open banking payment solutions or other forms, regardless of geographic location.

With Spring by Citi’s aim to take advantage of Citi’s global presence, integration into various global payment networks, security capabilities and treasury management offerings will be key as the service gears up for launch in the first quarter of next year.

First teased earlier this year, Spring by Citi chose Mastercard Payment Gateway Services to connect with eWallets and acquirers around the globe. Last week, the FI announced further partnerships to augment the service and support localized payment services, with PPRO integrating its access to local payment methods, while Global Payments will offer its card processing technology to the solution.

Tying Into the Back Office

Although supporting localized and direct-to-consumer payment collection services is a key focus for Citi, Kohli noted that what differentiates Spring by Citi is its cash management proposition, a “very important component of the solution” that ties its payment acceptance services into its back-office financial management offerings — a feature that he said is lacking in other payment acceptance services available to merchants today.

“When we talk about cash management, it isn’t just about liquidity and pooling structures,” he explained. “It’s about your entire payment flows, as well as trade flows — which providers who only offer a payment gateway solution do not provide.”

Spring by Citi aims to enable institutional clients to not only allow their own customers to pay however they want, but also allow them to collect the way they want to collect. It also aims to ensure that the collection process is in harmony with their broader cash and treasury management strategies.

“Spring by Citi really does bridge that big gap,” noted Kohli.

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