With the shift to an online, digital-first economy, 3PM has sparked an exciting new frontier of extended responsibility and immense opportunity for treasurers. At the same time, it is adding intricacies for treasury management, as it is different from handling corporate cash, which carries additional obligations.
In response, liquidity techniques, including notional pooling, need to be appropriately configured to comply with the applicable safeguarding requirements. With a 3PM-specific design, it is possible to integrate corporate and third-party fund flows into a single multicurrency notional pooling arrangement in full compatibility with safeguarding requirements. The result is the ability to continue to operate at maximum efficiency even when new obligations are concerned, achieving key benefits such as:
J.P. Morgan is an industry leader, and we understand that managing the 3PM landscape across markets involves different licensing requirements and safeguarding regulations. That’s why we brought together our vast expertise, knowledge and capabilities to help businesses, like yours, navigate smoothly through this changing environment. The result is an innovative liquidity solution which creates a multicurrency management tool specifically designed for the management of 3PM payments flows. Together, we can implement this first-of-its-kind solution that offers improved 3PM liquidity efficiency, while enabling you to manage your safeguarding requirements.
Drive growth with multicurrency 3PM notional pooling
Take, for example, a global company that operates a digital commerce platform, connecting buyers with merchants of goods or services that do not originate entirely — or at all — from them. It handles funds denominated in various currencies that belong to third parties (i.e., the merchants) from numerous jurisdictions and countries around the globe.
In order for the company to consolidate multiple currencies within a single liquidity structure, enable netting and keep a single liquidity position across the fund flows, they can rely on the 3PM notional pooling solution. This tailored product design centers on the compatibility between managing safeguarding obligations and the operational benefits of notional pooling. In short, it allows businesses, like yours, to run at optimal efficiency across multiple currencies of 3PM flows.
Third-party money notional pooling: How it works
Notional pooling of third-party money provides central control on funding and safeguarding.
The notional pool may consist of multiple currencies, such as European Union euros, British pound sterling and U.S. dollars, as well as other currencies.
Funds collected from buyers and merchants enter the notional pool.
Payments to buyers and merchants exit the notional pool.
Treasury funds may be moved into the pool to meet funding requirements.
The result is the creation of a multicurrency ecosystem for the management and security of 3PM payments flows. It’s an exciting way to meet the demands for better organization of these funds in a multicurrency notional pooling solution, thereby helping your business to thrive.
Enhancing capital efficiency and fuelling long-term growth with working capital optimization
Dec 01, 2023
Through insights derived from the analysis of working capital metrics, this report aims to help treasury and finance professionals for Japanese companies track working capital trends and guide their initiatives to optimize working capital management for recovery and growth.
Supporting future strategies: Working capital index Latin America 2023
Nov 30, 2023
Through insights derived from the analysis of working capital metrics, this report aims to help treasury and finance professionals for Latin American companies track working capital trends and guide their initiatives to optimize working capital management for recovery and growth.
Data helps ease the pain of cross-border payments for Financial Institutions (FIs)
Nov 30, 2023
There are several challenges involved in cross-border payments, but the data that is associated with each transaction can help alleviate those obstacles for financial institutions.
Payments do more than you think for insurers
Nov 28, 2023
Delivering efficient, dependable solutions at scale with the security you’d expect from a trusted payments innovator.
How AI will make payments more efficient and reduce fraud
Nov 20, 2023
Artificial intelligence (AI) is expanding the payment capabilities of non-bank financial institutions, according to a panel at this year’s J.P. Morgan NBFI Leaders Forum in Sydney.
Enhance your social commerce strategy with payments innovation
Nov 07, 2023
Social commerce has become an integral strategy supporting all business globally across industries.
Driving advanced cross-currency payments for financial institutions
Nov 06, 2023
See how this one innovative global solution can help you rethink the way you do cross-border business.
Helping pay for the cost of college
Oct 31, 2023
How friends and family can contribute funds towards a child’s future education expenses, using debit cards to gift to a 529 account
You're now leaving J.P. Morgan
J.P. Morgan’s website and/or mobile terms, privacy and security policies don’t apply to the site or app you're about to visit. Please review its terms, privacy and security policies to see how they apply to you. J.P. Morgan isn’t responsible for (and doesn’t provide) any products, services or content at this third-party site or app, except for products and services that explicitly carry the J.P. Morgan name.