Executive Summary
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The world’s largest businesses and their banks have been bringing their major global payments structures together into a rationalized, single platform known as a “payment factory.”
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This platform is not a single system, but a single payments application that runs across multiple centers around the world.
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These payment factories replace the previously disparate, fragmented, and nonintegrated payments applications that businesses ran historically, whereby every country had its own system and operation.
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The aim is to gain the efficiencies and cost savings that such global integration can deliver through economies of scale, alongside fault-tolerant, mission-critical operations because each technical center now provides a real-time backup to the others.
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The single payments platform also allows all payment transactions and currencies put through it to be managed globally in real time, which helps greatly with managing a firm’s cash position, liquidity, and risk.
Introduction
During the past few years, banks and their clients have been consolidating their payments infrastructures into single, global platforms. Payment consolidation helps to overcome the issues of fragmentation between systems that have been set up over the years. For large international banks and businesses in particular, having duplicate systems in different geographies just does not make sense. As a result, international banks and companies have been transforming their back-office operations with streamlined services based on refreshed processes and the latest technologies.
The Challenge
When you consider any large bank or global corporation, you think of multiple operations in multiple countries. Now think of a business and how it began, and you will probably think of one office in one town. There lies the challenge for any business: How can it grow operations effectively?
Growth may require new offices in new locations with new staff, and throughout the 20th century it often meant implementing more robust systems to handle payroll, general ledgers, and general office support. The problem is that, as the business expands, managers are forced to implement hundreds of systems to handle payments. The systems are often incompatible because they have been implemented at different times, to handle different currencies, and in different countries with differing tax regimes over a long period of time.
In the payments world, there are also many payment instruments and processes, covering cash, checks, and electronic payments, as well as accounts payable and receivable, with all of these differing domestically and internationally. This is why historically the payments world has been such a mess for multinational businesses—a mess of payments practices, processes, and systems, across the world.
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