When consumers suddenly began replacing their trips to physical stores with visits to digital stores in 2020, many businesses were forced to quickly follow them into the online realm. In their haste to catch up during that uncertain time, some of those businesses were little prepared.
According to research compiled by PYMNTS, a company’s treasurer should be involved from day one, laying the groundwork for the business to move into eCommerce. The Powering Smart Treasury Playbook: Treasurers’ 2021 Roadmap to Innovation explains why and then outlines the questions that should be asked and answered by the treasurer of a business.
Consider the following problems that may arise without the guidance of treasury, as well as the groundwork that a treasurer may put in place to eliminate those challenges before they start.
Businesses that expand globally may face challenges such as establishing new bank accounts, securing new card acquirer and payment service provider relationships, and managing foreign exchange (FX) exposure. Cross-border expansion means supporting new audiences with payment methods and currencies that may not easily integrate with existing options, while FX volatility can change the accuracy of revenue predictions.
With the guidance of a treasurer, on the other hand, these can be accounted for. Risk mitigation strategies may include selecting an automated dynamic currency conversion solution, utilizing a single global platform for global payments and collections, and using a platform that integrates currency reporting with global payments processing.
Compliance challenges for transactions may arise at any time. Companies must have the ability to view and control transaction management options as soon as they roll out their eCommerce business.
Here, too, the treasure can point to solutions. Compliance solutions might include ensuring that all stakeholders are aware of current relevant and proposed regulatory compliance concerns, using a platform that automates compliance monitoring globally for eCommerce transactions, and employing transaction management tools that offer granular visibility across eCommerce transactions in real time.
Businesses that launch a direct-to-consumer (D2C) model may find that creates a new wrinkle in profitability calculations. For example, the volume of transactions may rise dramatically while the average transaction value falls, impacting cash flows. Then there’s the user experience. Checkout friction and poor product performance can drive away customers and hinder profitability.
But with the help of a treasurer, the necessary capabilities can be incorporated before launch. Key ways to avoid those problems include providing or selecting a platform that offers local currency and relevant local payment options; ensuring strong customer authentication is consistent, and streamlining authentication processes globally.
The playbook published by PYMNTS outlines the process and treasury’s role, from starting the conversation about innovation and risk management, through building sustainable growth with the support of treasury, to following a roadmap to future-proof payments innovation.
Armed with this information, businesses will be better prepared to lay the proper groundwork before building the digital infrastructure they’ll need to best serve their customers online.