Market Scan

Headlines: International Trade and Payments

Commercial Payment Cards Can Help Companies Worldwide Satisfy Financial Compliance Requirements

Headlines: International Trade and Payments

JPMorgan Chase and GE Commercial Finance Offer Global Accounts Receivable Purchasing Program;

AFP Survey Finds Trade Finance Tools Evolving

Headlines: International Trade and Payments

Travelex launches DCC solution for US market - $170m revenue opportunity for US banks

Are You a Strategic SEPA Thinker?

US Banker Reports on E-Payments

The September issue of US Banker on E-Payments

In "Banks Can Cure Docs' Payment Plans," John Adams writes about the opportunity for banks in medical remittance processing.  Mr. Adams cites industry studies showing that it can cost up to $33 for a health-care provider to post a payment and that health-care payments account for 3.4 billion out of 9.3 billion business-to-business payments. 

In "Technology Can Drive Out Payment Chain Inefficiencies," Lee Conrad identifies JPMorgan Chase, Citigroup, Wells Fargo, US Bank, HSBC, and ABN Amro as leaders in Supply Chain Finance. 

In "U.S. Targeted by RBC in E-Payments Business," John Adams describes RBC's new payment service which lets foreign customers of American companies make card payments using their local currency and card type.

Headlines: International Trade and Payments

SEPA, More Than Just a Compliance Issue for Banks

Headlines: International Trade and Payments

Algorithmic Trading and Technology Sharping the Future of The Foreing Exchange Market

JPMorgan Treasury Services Announces Launch of Enriched Euro Payment Services to Coincide with its Target2 Readiness

Lloyds TSB Bank to Outsource Trade Back-Office Processing to Wachovia Bank

SWIFT announces new fixed fee pricing option for high volume customers

Wachovia Launches Advanced Internet-Based Financial Supply Chain Management Platform

Voices in Business Interview with interview with Robert Heisterborg, Global Head of Payments & Cash Management, ING.

Deutsche Bank Announces SEPA Strategy to offer "Financial Benefits"

Deutsche Bank announced that its SEPA (Single European Payment Area) strategy will offer financial benefits to corporations.  More accurately, Deutsche Bank has identified four mitigation strategies to lessen the inconvience to corporate customers:

• Treat SEPA payments like legacy domestic mass payments
• Insulate clients in their migration to SEPA through the enhancement of internationally popular payment formats such as IDOC, CSV and EDIFACT
• Use existing accounts for SEPA payments
• Add product features to ease the transition

In combination, these mitigation strategies will allow customers to continue using the same accounts, data formats, and communication protocols to communicate payment instructions.

FRB Dallas on Remittances to Mexico

FRB Dallas is puzzled at the increase in remittance to Mexico since 2000:

"What's driving the rapid growth of remittances to Mexico? It's a question that has puzzled researchers for years because the most likely economic forces don't seem to be in play. Fundamental factors, such as the size of the Mexican migrant population, their income and the strength of their bonds to Mexico, haven't grown as fast as remittances. Other variables, such as the peso–dollar exchange rate and Mexican economic conditions, have been relatively stable since at least 1996.

What have changed are money-transfer costs, which have plummeted since 2000 (emphasis added), and Banco de México's measurement techniques. Together, these factors likely account for the bulk of unexplained remittance growth in the last few years."

For the full report, click here.

Commentary

Hmmm...this time frame roughly coincides with Wal-Mart's formal entry into the money services business, when the company formed an alliance with Moneygram and slashed the cost of wire transfers.  Coincidence?   Not likely.  This year, Wal-Mart is formerly launching its in-store money service counters, which should drive more volume its way.  Thus far, Wal-Mart's entry into money services has been a big winner for consumers, both foreign and domestic, which in the past have relied on high cost channels like check cashing vendors and grocery stores. 

How will SEPA and the PSD Impact Corporates?

The Payments Podcast series (produced by Voices in Business and sponsored by Sun Microsystems) continues its look at the Single European Payments Area (SEPA) and the Payments Services Directive (PSD) with Dhiru Tanna, SVP Business Integration with Bank of America's Corporate Payments Group.  Mr. Tanna addresses the question, "how will SEPA and the PSD Impact Corporates?"  To view the podcast, click here.

General Electric Comments on SCORE and SEPA

In the July 3 issue of American Banker, General Electric's Paul Bernstein commented on SWIFT's Standardized Corporate Environment (SCORE)  and the Single Euro Payments Area (SEPA).  SCORE allows select firms to connect to their banks through SCORE rather than maintaining separate connections to each bank while SEPA is an effort to create a common payment network for the European Union. 

According to Mr. Bernstein, neither effectively meets the needs of corporates.  SCORE does not provide for the transmission of standardized remittance information, so corporate users must still communicate remittance information outside the payment process.  He goes on to state that SEPA is mainly a bank-to-bank standard and does not take into account the needs of corporates.

For more information about SCORE, click here.

Commentary

It's no secret that corporations need remittance information to travel with the payment.  The banking industry's continued failure to effectively meet this need is a bit mystifying.  If commercial card networks can come up with pricing that makes sense for large dollar payments, SWIFT will find itself at a competitive disadvantage as many procurement transactions move to cards.