Unlocking the Treasury-Merchant Services value proposition


9 minute read

Key takeaways

  • Treasurers are assuming greater responsibility for increasingly complex payment processes as their companies expand into new ways of selling directly to consumers.
  • The ability to forecast cash flows and manage currency and payment risk depends heavily on data analytics, seamless reconciliation, and sophisticated safeguards.
  • Merchant solutions can provide real-time consumer data, optimized currency exchange, and advanced security processes, thus helping companies make the most of their working capital and treasurers achieve their goals.

As corporate treasurers oversee ever more complex payment systems, many are discovering a key connection with the teams that manage the company’s merchant strategy and operations. “Historically, marketing or IT teams may have looked after merchant services,” says Kevin Baker, merchant specialist executive with Merchant Services at Bank of America. Yet as companies become more digital and explore new channels through which to sell, it becomes increasingly important for treasurers to work with other internal teams focused on consumer payments as these teams can provide key insights and comprehensive data relating to customer purchasing patterns, foreign currency exchange, fraud protection and other services, he says.


One key driver of this shift: From confectionary manufacturers to carmakers, “global companies are beginning to explore selling directly to consumers,” Baker adds. As that happens, treasurers find themselves involved in responsibilities that span beyond traditional areas of oversight such as payroll, supplier payments, and receivables to monitor flows generated by thousands of individual consumers. “Now, you’ve got new payment flows, refunds, and reconciliations to think about,” he says. What’s more, the treasury department is expected to be the ‘payments and transactions center of excellence,’ offering expertise and best practices companywide.

“Global companies are dipping their toes into selling directly to consumers.”


Here are five ways merchant solutions can help treasurers fulfill their expanding corporate function. 


Timely data for forecasting and modeling

“Treasurers are always aiming to get as close to real-time cash flow forecasting as they can,” Baker says. “What funds are coming in and going out, what’s our position going to be, and do we need to optimize our exposures?” By recognizing merchant services as a key component of a digital receivables strategy, treasurers can gain that needed transparency. For example, money from sales made today may not appear in a company’s accounts for a day or two, he notes. “But your merchant services dashboard is already telling you how much you sold, and you can build that into your forecasting model,” says Baker. "Merchant services is often one of the largest receivable flows, particularly for companies who sell directly to consumers, so the ability to better forecast these flows is incredibly important."


Merchant solutions can also help treasurers stay current on evolving economic trends and consumer behavior, says Juan Garrido, head of Merchant Services Product in Global Banking at Bank of America. For example, as pandemic reopenings lead more consumers back to physical stores, data can help companies predict and prepare for shifts in card-not-present (i.e. remote) versus card-present (in-store) transactions. And as business volume fluctuates throughout the year, “merchant services can provide crucial insights on how this year compares with past trends, which individual stores or regions may be outperforming others, and how the company is doing versus a benchmark of peers in their industry,” Garrido says. 

“Merchant services can provide crucial insights on how this year compares with past trends, which individual stores or regions may be outperforming others, and how the company is doing versus a benchmark of peers in their industry.”


Real-time reporting and automatic reconciliation

Treasurers have spent years seeking efficiencies in enterprise resources planning (ERP) systems across their entire operations, from financing and procurement to invoicing and production. Manually translating data from one system to another is a big headache. “For reporting purposes, tailored merchant solutions can provide treasurers with specific, customizable data on chargebacks, transaction volumes and other key performance indicators,” Garrido says. “Merchant services solutions streamline that process and ensure that the reporting tools easily connect wherever possible with the customer’s ERP system, making information easier to upload and understand, with less manual work.”


The same holds true when it comes to reconciling payments. For example, when a consumer in Chicago or Sydney buys something and agrees to pay in separate payments, bottlenecks occur when the e-invoices sent to customers can’t be easily identified and matched against payments. The structure of card reporting, as well as use of invoice numbers, can help treasurers implement systems that automatically reconcile payments as they flow seamlessly from invoice to closure.


Limiting fraud exposure

With both business and reputation risk as central concerns, treasurers have a vital interest in knowing that their company is doing everything it can to protect customer identity and detect identity fraud, affecting some 42 million U.S. adults in 2021, at a cost of $52 billion.1

“There are a variety of tools in the merchant space to help safeguard your company and your customers.”

For example, 3D Secure technology authenticates purchases by asking the consumer to verify their identity. “We also advise that treasurers have implemented the latest encryption and tokenization technologies,” Garrido says. With tokenization, companies no longer have to store and manage customer account numbers, relieving them of a significant customer data risk and reducing their PCI scope. 


Foreign exchange optimization

With cross-border e-commerce transactions expected to reach $1.2 trillion in 2022,2 companies must balance convenience for their customers, who expect to pay for goods or services in their home currency, against the company’s need to mitigate the impact of multiple and fluctuating currency values. Companies must also be able to convert payments back to their reporting currency (the currency used in their financial statements) as seamlessly as possible. “It’s critical for treasury managers to understand where products are being sold, what currencies they’re being sold in, and how currencies can be converted in the most efficient way possible,” Baker says.


The authorization currency (the one the consumer pays) could be Hong Kong dollars, Australian dollars, South African rand, or many others. “It may be useful to own currency accounts for countries where you do business, and therefore receive funding in those currencies,” Baker says. “In other cases, it’s more advantageous to convert sales immediately into a single, centralized currency.” With their direct role in the payment process, “merchant services experts can help set up and optimize your multi-currency settlement solution, to ensure you’re achieving the right strategy for your business,” he says.


Comprehensive service and support

In a world of uncertainties, where financial regulations and security procedures often vary from country to country, having your merchant services and banking services under the umbrella of a single global financial institution offers efficiencies for your working capital and an added degree of security, Baker notes. “Having it all in one place means you’re working with people who understand how important it is to have interoperability between systems and to connect your internal processes, where possible, as well. There are operational benefits, too, such as the potential for lower aggregate costs and faster funding,” he says.


As the treasury department takes on more oversight of payments and transactions, contact a Bank of America relationship manager to learn more about how merchant services specialists can help.


Kevin Baker | Merchant Specialist Executive with Merchant Services, Bank of America

Kevin Baker | Head of Merchant Services, EMEA, Bank of America

Juan Garrido | Head of Merchant Services Product in Global Banking, Bank of America


1Javelin Strategy & Research, “2022 Identity Fraud Study: The Virtual Battleground,” March 29, 2022. https://www.javelinstrategy.com/2022-Identity-fraud-scams-report


2Kaleido Intelligence, “Digital B2C & B2B Ecommerce Sales Reach New Levels of Growth Post-Pandemic, Forecast to Reach $6 Trillion In 2022,” November 9, 2021.