- 2 - Payment Opportunities From B2B E-commerce McGuffog, April 2001 ©2001 Sixhills Consulting Ltd & Author Exhibit 1. Payments customer segmentation And the customers want……….what? One of the complexities of the payments world is that different kinds of customers have very different needs. Simplistically, customers want some combination of low cost, control (so that they, rather than the organizations they deal with, define the nature and timing of payments) and richness of information, so making it easier to perform reconciliation, generate audit trails, etc. Traditionally, banks have addressed the payments needs of their customers primarily via the traditional cheque and credit card offerings at the low end, and cash management systems at the high end. Cash management systems began as relatively simply as terminals into bank systems that allowed electronic payments to be made, and rudimentary account management to be done. Over time however, these cash management systems have evolved into highly sophisticated products in their own right, offering features such as foreign exchange, access to capital markets, etc. Banks traditionally look at business customers for payments services as comprising four broad bands (see Exhibit 1):  Small business, the simplest customer group. Usually, small businesses utilize very simple payment systems, usually only a single cheque account, and perhaps a simple corporate credit card. Usually they don’t utilize cash management systems, although recently some banks have been attempting to offer simplified capabilities along these lines, often based on consumer internet banking systems, rather than full corporate packages. In this segment, because the customer needs are relatively simple and low technology, adding B2B payments capabilities into the mix would be relatively simple, but it would also have relatively low value to the customer. Value added e.g. ForexE-Trade ServicesCredit IntermediationLiabilities/ Receivables ManagementReconciliationsCash ManagementPaymentsTransaction InformationBuyer• Single account––c–ManualManualManual–SME• Few accountsSimpleSimpleccManualKey-InGLMulti AccountMedium• Accounts by business division• Pooling/ sweepingIntegration with market tradingComplexxIn-houseAutomatedAutomatedGL/ERPMulti CurrencyLarge Local• Global cash management• Global pool/ sweepComplex Forexintegration with market tradingComplexxIn-houseAutomatedAutomatedMulti-ERP/GLMulti CurrencyLarge MultinationalCorporate SegmentationCash Management Needs
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