Saving on transactional costs with efficient Cash Pooling

Our customer, a leading global telephone operator, implemented a Cash Pooling model to centralize the Group’s payments, leveraging Primeur’s Data Integration platform Data One to manage all the related data flows. 

By centralizing payments, the company achieved consistent costs savings while reducing errors and optimizing the overall payment process.

The Opportunity

Our customer is one of the largest telephone operators in the world, with an extended presence in over 30 countries and more than 100,000 employees.

Each subsidiary of the Group was managing their own payments autonomously: from payrolls to supplier invoices, all payments were made directly by the subsidiaries to their local banks of reference.

Due to the floating exchange rates and the banks’ different payment conditions from country to country, the company was wasting a consistent amount of money on transactional costs. The company was therefore seeking for a way to optimize this process and spare on the payment fees.

The Solution

The company decided to switch to a centralized payment model, introducing a unique entity responsible for all the Group’s payments. Subsidiaries from all over the world are sending invoices and payment requests to this new entity, which selects from a pool of banks the best option in terms of payment conditions and current exchange rates – ensuring the payment is processed at the lowest possible cost.

To support this innovative Cash Pooling model, our customer adopted Data One – Primeur’s Data Integration platform – as their corporate solution. Data One receives the payment files from the subsidiary’s ERP, transforms them in the appropriate format (PAIN: Payment Initiation, an xml file format used in the Corporate to Bank payment traffic), and sends them to the selected bank, collecting the payment receipts after the payment is processed.

Results

Thanks to the new Cash Pooling model supported by a Data Integration approach, our customer has achieved consistent cost savings while optimizing the overall payment processes.

• The centralized payments with the ability to select the best possible bank resulted in a 72% reduction of banking fees.
• The use of a centralized Data Integration platform to manage all data flows allowed the company to improve control on the payment processes, clearly tracking transactions with a 98% reduction of errors.
• The Cash Pooling model decouples the involved parties (subsidiaries and banks), making the payment process easier for the Group’s entities that are now dealing with a unique counterpart who manages the payments for them.
• Through Data One, our customer currently manages 5,000 transactions/day, exchanged between the Groups’ entities and pool of 16 banks. The solution is highly scalable, as the company can onboard a new subsidiary/bank on the platform in just a few days.