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Liquidity Management

Leading e-retailer

Simplified payment processing across Asia Pacific with Just-in-Time Funding


About

This major e-retailer operates in eight countries across the Asia Pacific region. Headquartered in Germany, the company has grown rapidly since its launch in 2012.

 

The Challenge

Due to the company’s rapid growth, treasury was compelled to open numerous bank accounts across multiple banks in the region. Idle balances held in each country proved to be a challenge, resulting in lost opportunity to deploy investment revenue effectively.

Instead of manually funding local business, the e-retailer needed an automated solution that would allow treasury to reduce idle, trapped cash in local currencies. Treasury set an objective to automate manual processes for funding, sweeping, and foreign exchange. They needed to gain visibility and control of their cash balances in the Asia Pacific region.

 

The J.P. Morgan Solution

  • The treasury team turned to J.P. Morgan to implement a EUR header account in Frankfurt to fund payments across the Asia Pacific region from a central location.
  • Each of the company’s trading entities in the region has a EUR account in Singapore facilitating local currency (LCY) funding, which eases inter-company loans in EUR.
  • Just-In-Time Funding is used in each location to facilitate local payments from respective Singapore EUR header accounts.
Infographics-Singapore

The Impact

  • By standardizing and automating payment processes, treasury has been able to reduce its operational burden.
  • Treasury can now take advantage of an automated funding mechanism, allowing the team to inject cash from a simplified account structure to fund payments across Asia.
  • Additional benefits included centralized visibility and control over FX rates, and reduced idle LCY balances, which had been caused by forecasting variances.
  • Treasury has also eliminated non-value-added activities, driving further efficiencies and allowing a more strategic focus.

 

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