The Payment Organisation Infographic

The Payment Organisation

An overview of the key teams and functions that ensure payments are processed smoothly.

Operations: The Engine Room

Paying & Receiving

Primary Point:

Handles all incoming and outgoing payments.

Sub-points:

• In Payment Service Providers (PSPs), they manage payments for many customers.
• In Corporations, this is known as Accounts Payable/Receivable and handles payments to suppliers/employees and from customers.
• Collaborates with treasury to ensure sufficient liquidity for payments.

Repair

Primary Point:

Corrects or formats payment instructions to ensure they can be processed successfully (Straight-Through Processing).

Sub-points:

• Mainly a function within PSPs.
• Corporations typically rely on getting information right the first time.

Reconciliation

Primary Point:

Verifies that an organization's internal records of payments match the information from their bank.

Sub-points:

• Ensures all payments were made and received correctly.
• Unreconciled items are passed to Investigations.
• Automation is increasingly used (auto-reconciliation systems).

Investigations

Primary Point:

Researches payment issues when they cannot be reconciled automatically.

Common Reasons:

• Beneficiary claims non-receipt of funds.
• Payer is unable to apply a received payment due to missing/incorrect information.

Risk & Compliance

Primary Point:

Ensures the organization adheres to all relevant laws and regulations.

Sub-points:

• Monitors payments to prevent money laundering and terrorist financing.
• Operations is the "first line of defense" in identifying suspicious activity.

Technology & Business Continuity

Primary Point:

Operations relies heavily on technology and has contingency plans for outages.

Sub-points:

• Involved in technology procurement, system maintenance, and managing payment gateways.
• Participates in testing business continuity plans (e.g., backup sites) to ensure payments can always be made.

Customer Service: The Front Line

Handling Payment Enquiries

Customer service representatives are the first point of contact for clients with payment issues. While they may not investigate issues themselves, they log the enquiry and pass it to the right team (usually Operations).

Common Reasons for Enquiries:

• Beneficiary claims they never received the payment.
• Beneficiary can't identify the payment's purpose.
• Payment was for the wrong amount or on the wrong date.
• Remitter wants to stop or recall a payment.

Network Management: Building Connections

Primary Point:

Chooses and manages relationships with partner banks and financial institutions to access different payment clearing systems, especially in foreign markets.

Key Responsibilities:

• Deciding between direct access (connecting to clearing systems themselves) vs. indirect access (using a partner).
• Conducting detailed reviews of potential partners, often using a Request for Proposal (RFP).
• Negotiating Service Level Agreements (SLAs), which are legally binding commitments on service quality, as opposed to Service Level Standards, which are non-binding goals.

Centralised Hubs: SSC vs. RTC

Shared Service Centre (SSC)

Operations

Primary Point: The "Brawn"

An operational hub that consolidates and standardizes an organization's back-office tasks into a single, centralized location.

Functions Handled:

• Payment Processing
• Accounts Payable/Receivable
• Accounting & Reconciliation
• Human Resources (HR) & IT

Regional Treasury Centre (RTC)

Strategy

Primary Point: The "Brains"

Directs an organization's overall treasury strategy for a specific region, focusing on financial efficiency and governance.

Key Drivers & Functions:

• Cash visibility and efficiency (Liquidity Management)
• Governance, risk, and control
• Investment, funding, and FX policy
• Managing banking relationships

This infographic summarizes key concepts from "Topic 14: The payment organisation".