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Treasury’s role in redefining e-commerce: Revolutionising the digital marketplace


As the landscape of commerce evolves with the rise of digital marketplaces, treasurers face the dual challenge of seizing new opportunities and tackling the emerging financial complexities.

In the changing world of global commerce, the move from traditional B2B models to B2C and the surge of marketplaces signifies a profound transformation, affecting not only sales strategies but also the foundational financial operations that facilitate these exchanges. Reflecting this trend, e-commerce’s share of total retail sales in the United States grew from 10.7% in 2019 to 15.4% by 2023, underscoring the increasing importance of digital commerce in the modern economy.

The pandemic-accelerated transformation has not only enabled companies like BMW, Under Armour and British American Tobacco to expand their reach but also introduced a spectrum of challenges and opportunities for treasurers navigating this new terrain. From implementing cutting-edge payment solutions to ensuring seamless, secure customer experiences, the role of the treasurer is more pivotal than ever in steering organisations through these complexities.

The evolution of marketplaces at Under Armour

Marketplaces have transformed from traditional retail outlets to digital platforms, where direct-to-consumer transactions have soared, especially post-pandemic. Under Armour, a leading athletic performance apparel and footwear company, has seen a significant shift towards direct-to-consumer sales, which now make up over 40% of its revenue.

Mack Makode, VP and treasurer, sheds light on the nuanced nature of marketplaces. He describes them as avenues for sales and intricate ecosystems where the tangible world of physical stores and e-commerce converge seamlessly. “Marketplaces for us,” Makode explains, “are about creating a seamless and frictionless payment experience for our customers, regardless of where they choose to engage with our brand.” Whether it’s the tactile interaction in stores or the convenience of online shopping, the end goal remains consistent: to make the act of payment so effortless that it almost recedes into the background, allowing the quality of Under Armour’s products to hold the consumer’s attention.

This holistic view of marketplaces has propelled the treasury team at Under Armour to delve deeper into the mechanics of payment processing, a critical component of its omnichannel strategy, seeking solutions that are not only technologically advanced but also aligned with consumer expectations for simplicity and speed. The formation of the Payment Steering Committee, as highlighted by Makode, signifies a commitment to redefining how transactions are conducted across all customer touchpoints. “Our objective was to ensure that whether a customer makes a purchase in-store or online, the process is seamless, secure, and efficient,” Makode told Economist Impact. 

The committee’s focus extended to exploring newer payment solutions like Buy Now, Pay Later (BNPL) services, which have gained traction among consumers seeking flexibility in payment options. “The treasury’s role,” Makode notes, “was crucial in conducting a cost-benefit analysis for BNPL services, ensuring these innovations align with our financial strategy and truly add value to our customers without compromising our revenue margins.”

This approach has required a keen understanding of the risks associated with digital payment methods, from cybersecurity threats to regulatory compliance, and a proactive stance in mitigating these risks without stifling innovation.

As the treasury team continues to refine its payment processing strategies, the focus has transcended towards embracing global payment solutions that cater to a diverse international customer base. A digital marketplace knows no borders, so the organisation’s payment infrastructure must be robust enough to handle cross-border transactions efficiently and securely. “The challenge is to implement a payment system that is as universal as possible, minimising the complexities of currency conversion and taxation, while maximising the ease of transaction for the customer,” Makode elaborates. 

The role of technology and automation

Under Armour’s journey into new payment, arenas underscored the crucial role of technology and automation. Collaborating closely with the technology teams, the treasury organisation sought to leverage cutting-edge payment technology to enhance operational efficiency and significantly improve the consumer experience.

This shift towards digitalisation represents a pivotal moment in the treasury team’s evolution, placing technology and automation at the core of its strategy. Makode highlights, “Our move to digitise payment processes reinforces our commitment to innovation.” A key initiative in this direction was the adoption of smart safes in retail locations. Similar to one-way ATMs, these devices facilitate the immediate digitalisation of cash transactions, streamlining cash management in stores.”

Meanwhile, automation’s role in Under Armour’s strategy extends across the treasury’s functions, from simplifying settlement processes to enhancing risk management. By automating routine tasks, like reconciling accounts, the treasury team can pivot toward strategic planning and analysis. “Automation liberates us from manual tasks, allowing us to concentrate on strategic decisions,” Makode said. 

As Under Armour grows globally, centralising technology and standardising processes are a priority. The treasury team aims for a centralised technology platform that supports standardised processes across regions but allows for local payment processing. “This approach ensures efficiency, reduces redundancy, and maintains a single source of truth within the organisation.  Also ensuring properly prepared data is essential for AI applications,” Makode concludes.

Transforming marketplaces: streamlining B2C commerce at BMW of North America

BMW of North America is streamlining the digital marketplace landscape. Initiated in 2021, this project unveils a range of challenges and opportunities for its treasury department.

Helena von Gladiss, President, BMW US Capital, LLC, sheds light on the transformative journey of integrating e-commerce with traditional sales channels, fundamentally reshaping the marketplace dynamic. The focus, she explains, is on elevating the customer experience by seamlessly blending innovative payment solutions across all points of interaction. “Our aim was to create a uniform checkout experience, incorporating contemporary payment options to facilitate smooth transactions for our customers,” von Gladiss told Economist Impact in an interview.

The development of marketplaces at BMW of North America has confronted the treasury team with distinctive challenges.

A critical area of focus for BMW’s US treasury team centred on creating a uniform back-end for all mobile channels in the US, necessitating a rigorous Request for Proposal (RFP) process that extended its search beyond traditional banking partners to encompass a wide array of fintechs and other innovative payment platforms. This initiative was pivotal as the treasury team aimed to modernise its payment infrastructure, supporting the diverse needs of its expanding online marketplace. 

Von Gladiss, reflecting on the treasury’s multifaceted role in this venture, underscores the challenges and objectives of evaluating new payment service providers. “Our goal was to not just facilitate transactions but to elevate the entire customer experience,” she explained, highlighting how the treasury team aims to integrate advanced services such as fraud protection and regulatory compliance alongside a variety of payment methods.

The RFP process involved a deep dive into the capabilities of both traditional banks and emerging fintech players. This comprehensive assessment was critical in identifying partners who could offer not only a broad spectrum of payment solutions but also contribute to a seamless and innovative customer checkout experience. 

Furthermore, von Gladiss emphasised the importance of working with payment providers that could bring innovation to the table. The selection of a new-age payment service provider, through the RFP was also informed by a desire to integrate many payment methods enhancing the amount of options available to customers. This collaboration laid the groundwork for further enhancements and a broader rollout with payment solutions that are secure, and aligned with consumer preferences and behaviours.

Meanwhile, the integration of new payment technologies required close collaboration between different teams, ensuring that the chosen solutions could be seamlessly incorporated into the organisation’s existing digital infrastructure. This collaboration was critical in creating a unified and efficient checkout process across various e-commerce platforms, aligning with the company’s vision for a customer-centric digital marketplace.

Moving forward, BMW’s treasury team continues to explore opportunities for further innovation in payment processing and digital commerce. As the marketplace continues to grow and evolve, the treasury’s role in shaping BMW’s digital strategy remains indispensable, driving the company towards achieving its vision for a connected and customer-focused digital ecosystem.

BAT’s pioneering digital marketplace strategy

Facing the dual challenge of a rapidly evolving digital landscape and the market nuances across its product categories, British American Tobacco (BAT) has adeptly manoeuvred its treasury function to support and drive its marketplaces initiatives. Mila Harger, head of digital treasury and banking at BAT, provides a candid look into how the treasury team navigates this complex terrain, emphasising the critical need for clarity in and establishment of treasury’s role from the outset.

In addressing the complexities of BAT’s strategic treasury management within digital marketplaces, Harger delves into the unique challenges presented by regional variations in payment method acceptance and evolving consumer and customer expectations. This situation is particularly complex for companies like BAT, which operate in highly regulated, restricted categories in multiple jurisdictions. Harger emphasises the need for a bespoke strategy to adeptly navigate the diverse payments landscape.

Simultaneously, BAT’s treasury team leverages its extensive experience with different geographies, regulatory frameworks and payment providers to maintain operational effectiveness across global markets. The intricate nuances of working within restricted merchant categories necessitates building strategic partnerships with payment processors and banks, ensuring compliance and securing trust. 

This variance in available options not only affects the choice of partners but also shapes the operational strategies for marketplaces across different markets. For BAT, this means adapting its payment processing framework to align with local regulations and banking practices; ensuring fit for future solutions while optimising for compliance, efficiency and security. The treasury’s role is pivotal in this process, requiring a deep understanding of both the local and international payment landscapes and developments to make informed decisions that support BAT’s overarching digital commerce objectives through scalable and sustainable solutions.

This approach necessitates a granular understanding of local markets each with its distinct commercial, regulatory and banking environment. Such diversity demands that the treasury function not only engages in comprehensive contract negotiations and risk assessments but also collaborates closely with legal counsel and local commercial teams to ensure seamless operations.

Central to the treasury team’s approach is keeping abreast of innovative  technology solutions to ensure scalability and optimal integration across its digital marketplace ecosystem. Harger discusses options such as the deployment of an orchestration layer or partners,  to act as a bridge connecting BAT with a spectrum of payment providers. Such a layer help minimise the need for extensive modifications with each new payment partnership, significantly enhancing operational efficiency and speed to market. Moreover, it can grant the agility to swiftly adapt to market shifts and new demand, ensuring a consistent and optimised backend reconciliation process by avoiding multiple and specific integrations. Such  strategic technological integration combined with strong partnerships with banking and payments partners supports BAT Treasury’s aim to support BAT’s transformation through scalability and sustainability of solution by optimising transactional volumes, securing beneficial commercial rates, and leveraging best fit current and future payment solutions..

Comprehensive risk management in a marketplace

Navigating the multifaceted risk landscape poses significant challenges for the treasury team, particularly in managing counterparty risks with a broad spectrum of payment service providers. This includes evaluating risks from a variety of partners, from established banks to emerging neo-banks and fintech entities, each operating within distinct regulatory frameworks and presenting unique risk profiles. This diversity demands a strategic approach to risk assessment, ensuring the treasury team can effectively mitigate potential vulnerabilities across this varied financial ecosystem. 

Harger explains the necessity for a comprehensive risk assessment strategy that extends beyond traditional credit checks to include operational, regulatory, and reputational risk considerations. This approach is vital for maintaining the company’s financial stability and ensuring compliance across its digital platforms, highlighting the treasury’s role in safeguarding against potential risks in an evolving digital marketplace.

In closing, Dr. Matthaeus Sielecki, Global head of embedded finance solutions at Deutsche Bank sheds light on the collaborative approach between corporate treasuries and banks in navigating the intricacies of digital marketplaces. Emphasising the transformative shift in business models towards direct consumer engagement, he highlights the critical role of treasury in adapting financial strategies to these changes. “Treasuries navigate e-commerce complexities, integrating payment solutions and managing risks, with DB’s support to implement new digital models effectively.” Sielecki told EuroFinance. 

The discussion reinforces the importance of strategic partnerships and the selection of payment solutions that not only meet immediate operational needs but also align with long-term strategic goals. Sielecki’s perspective reinforces the notion that as companies like BMW, Under Armour and BAT venture further into digital commerce, the treasury’s engagement with banking partners becomes increasingly vital. This collaboration ensures the successful implementation of innovative payment technologies and risk management practices, ultimately enhancing the customer experience and driving forward the digital marketplace agenda.