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Automating corporate payments with BaaS for corporate

With banking as a service for businesses, any entity – not banks only – will be able to offer financial services to customers.

By 2023 the “as a service” model will be the most widespread amongst the technological solutions adopted, thanks to the massive development of the cloud. This is what emerges from a Gartner survey. Among the most interesting and relevant trends we find ‘banking as a service’. This term refers to an end-to-end process ensuring the execution from the beginning to the end of any financial service by providing it on the web, making it available on demand and carried out within a set period of time. All these three aspects are significant and must occur in order to talk about banking as a service. In this article, we will look primarily at Banking as a Service applications for corporations. Specifically, thanks to BaaS, companies can offer financial services to customers although they are not banks themselves. In this way, the relationship with the user improves, building up loyalty, and consequently the user experience becomes even more pleasant.

How to simplify corporate payments with Banking as a Service

Nowadays, companies find themselves in the position of having to increasingly guarantee accessory services to customers. Not only concerning the sale of goods and services, but also the ability to pay for them conveniently, without having to rely on an intermediary. An example of what is increasingly being avoided is the payment in instalments of any goods, which can however be arranged by a third-party company compared to the client and the company. Firms can greatly enhance their offerings without incurring into heavy expenses in building the infrastructure necessary to enable payments, reporting, insurance and whatever other services can be delivered through these new methods.

Online platforms for automated reconciliation

Automatic reconciliation arises from the need to match a collection with products or services offered for sale. There are, therefore, two levels: the first one is the notification, the second one is the “squaring”. In the latter case, it is necessary to check this collection is actually justified and correct. A typical example can be seen in insurance companies which, without verification of correct payment, cannot proceed to issue the policy.

To make the process more effective and automatic, solutions such as PACE (acronym for Payment & Collection Engine) developed by Fabrick in collaboration with Axerve are needed. This is a digital platform for collections and payments offering the possibility to manage the payment process and its reconciliation automatically. There are four main strengths of PACE.

  • Multi-product management: typically used for insurance policies, multi-product packages or any subscriptions needing recurring management.
  • Single, split or deferred payment: applied for the purchase of one or more products in a single transaction. Alternatively, for managing recurring payments for split or deferred policies.
  • Automatic reconciliation of collections and settlement: in this case automatic reconciliation of payments with Smart or virtual pos is allowed. Automatic reconciliation of payments by bank transfer is also guaranteed through the use of the virtual Iban.
  • Distribution of the collection according to the products purchased and the payment method used: in this case there is a distribution of the collection between the corporate company, the sales network and the different partners. Moreover, the tracking and squaring of the single related transactions is guaranteed.

Managing deferred payments for a company with BaaS services

The importance of banking as a service for companies can be seen in the many different opportunities it provides to improve the relationship between the company and its clients. For example, a crucial step is that BaaS makes it possible to manage fractioned and deferred payments, over time or recurring, as well as the settlement between the company and the credit institution. In this way, the client has no additional tasks to deal with after signing the contract with the corporate.

Simplified second-level reconciliation to manage virtual payments

Second-level reconciliation, i.e. verification between the payment transaction and the settlement (i.e. the actual crediting of the sum collected to the company’s bank account) is another benefit that Banking as a Service for corporations guarantees. Fabrick’s PACE, for example, allows reconciliation, following payments with Smart and Virtual Pos, bank transfer on Virtual Iban and also SDD (Sepa Direct Debit). Once implemented, the solution also makes it possible to apply split payment logics, i.e. to divide the collection into components addressed to different players on the basis of business logic, such as, for example, the recognition of commissions following a payment made by the customer. In this case, PACE attributes the commission to the agent and executes it, an operationwhich can take place at the same time as the sale or at a deferred time.

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