As the most resilient high street retailers attempt to restart their operations, it’s clear that the shift to e-commerce has been accelerated by the pandemic. Sulabh Agarwal, Managing Director Global Head of Payments at tech consultancy Accenture notes that before 2020 digital commerce volumes doubled over a period of five years and have redoubled since the first lockdowns and restrictions took effect.

Agarwal chaired the recent webinar ‘E-commerce for treasurers: staying ahead of the game’, which was hosted by The Economist and supported by Deutsche Bank. Offering their experiences on how their respective companies and treasury departments have responded to the Covid era were Wolfgang Ratheiser, Corporate Treasurer at luxury carmaker Porsche, Vassilina Lapteva Walford, Treasury and Risk Director for luxury consumer goods holding company Richemont, and Kilian Thalhammer, Managing Director, Head of Merchant Solutions for Deutsche Bank Corporate Bank.

Noting that the past 13 months have been marked by major changes, including individuals working from home as offices closed and a sharp reduction in reliance on cash, Agarwal asked how each company and its treasury operations had been affected. Ratheiser reported that 2020 had been challenging for Porsche, particularly in late-Q1 and Q2 when the downturn in sales was most acute. The group had e-commerce strategies in place pre-pandemic, but had to devise an e-payment solution for dealers in both its home and overseas markets. In many cases their showrooms had been shuttered for lengthy periods and supporting them through the crisis had been important.

Deutsche Bank had been changing its approach for some time towards both payments and merchant acceptances; areas that had seen strong growth, said Thalhammer. This presented significant opportunities for banks as even traditionally conservative markets such as Germany had experienced a major shift away from cash towards digital payments from March 2020. Market players were also introducing new business models, with more business-to-consumer (B2C) in addition to business-to-business (B2B) offerings. The Bank aimed to support clients’ digital transformation initiatives by helping acceptance businesses as well as treasury.

Market dynamics are clearly changing with the move to B2C, with the tech giants already providing a frictionless experience for customers, said Agarwal. With other businesses looking to move in the same direction, how was each company addressing frictionless payments?

Consumers definitely expect frictionless agreed Ratheiser, although he suggested that it is still undervalued and regulatory changes have placed greater focus on authorising the checkout. Payment methods must be both global and local, and corporates must avoid having differing payment channels for different parts of the business.

Payment service providers (PSPs) are also keenly aware that convenience has become key for the end consumer, added Thalhammer. Offering a mix of payment methods is essential, but options should be limited to three or four – more than that is excessive for both buying and back-end processes. Convenience is equally key for treasury in bringing payment services and treasury services together, while the PSP’s role is to make this possible. It means no longer thinking in terms of different channels, but of different processes.

Treasury services and merchant acquiring services, which had traditionally been siloed, are now much more integrated. This makes services smoother and more efficient and also helps corporate treasurers while opening up new opportunities.

How are newer technologies such as the Cloud being addressed, asked Agarwal? Their impact on treasury is considerable, responded the panellists.

Within Porsche e-payment became an important part of treasury, said Ratheiser. Streamlining ensured that the correct data model was in place and involved going backwards through the entire value chain in order to do so. With a growing number of new data sources, getting the right solutions was contingent on having the right data models in place.

This raised the issue of how you use the new data most efficiently, suggested Agarwal and treasury’s attitude towards the governance of multiple service providers such as fintechs.

Now that Porsche deals regularly with fintechs it asks which of them can best support the business, revealed Ratheiser. Initially the company began with just a single PSP, but now it needs to evaluate a portfolio of different vendors, as the business grows more complex.

"As a payment service provider you must be very clear about what you can and cannot deliver – it’s not possible to be everything to everyone "
Kilian Thalhammer, MD, Head of Merchant Solutions, Deutsche Bank Corporate Bank

Deutsche Bank helps to make these partnerships easier by always being clear on what, as a PSP, it can and cannot deliver, said Thalhammer. It’s not possible to be all things to each client, so a smooth mixture of different partners is essential. They could be on the treasury side, on the acceptance side or, say, for FX handling and openness is needed in order to gain the most value.

There have been plenty of exciting recent developments, such as Tesla’s willingness to accept crypto payments, Europe and individual countries developing digital versions of their currency and the Internet of Things (IoT) as another new area of connectivity, said Agarwal, who asked his panellists which excited them most.

Thalhammer agreed that working with cryptocurrencies represented a shrewd marketing strategy for companies such as Tesla, while PayPal is using bitcoin to make handling cheaper. Storing value in crypto is better than doing so in a traditional currency, he suggested and complex areas of crypto have moved centre stage and could change the services offered by PSPs.

However, Ratheiser is unconvinced that the heavy burden of compliance involved makes tapping into cryptocurrencies worthwhile, especially as central bank digital currencies (CBDCs) such as the digital yuan being developed by the Peoples’ Bank of China (PBOC) were on a fast track. Request to Pay (RtP) is also promising as Porsche handles many high value payments, which must be completed quickly.

Questions from the audience began with each panellist asked what role treasury plays in e-commerce and how integrated it is into their company. Porsche focuses on how finance and treasury will look in the future and how they remain supple enough to support the business, said Ratheiser. Payments is the backbone of treasury, and therefore e-payments and their development are very important. With this the treasury teams need to be strongly interlinked with the business, for instance with the sales department.

There was also agreement on the importance of a diverse skill set. Porsche actively seeks individuals with finance and data science expertise. Thalhammer said that a growing number of companies are managing to achieve a blending of different skill sets, although there are still some that keep payments and treasury in separate silos.

Another audience question from panellists was how to achieve a balance between retaining robust controls and responding to the need for companies to be increasingly agile. Thalhammer agreed that control is, by definition, neither fast nor agile and it’s easier to be flexible than inflexible, but that’s challenging in a global market with varying requirements in different regions.

Asked to contribute a final takeaway, Thalhammer offered two observations: firstly that the payments world is an exciting one that can add value; secondly that we should all step out of silos and not only bring treasury and payments together but also other business functions. Ratheiser said that from the treasury perspective, it’s important to understand how your business model is going to change and how the fascinating and growing market of e-payments will be part of that change.

The webinar ‘E-commerce for treasurers: staying ahead of the game’ held on 15 April 2021 was hosted by The Economist and supported by Deutsche Bank. The next in the series, ‘Liquidity management in a low interest rate environment’ will be held on 20 May