Banking Circle, a Luxembourg-based financial infrastructure provider that recently obtained its banking licence from the Commission de Surveillance du Secteur Financier (CSSF), has introduced its "Payments on Behalf of" (POBO) and "Collections on Behalf of" (COBO) solutions.
Historically business-to-business (B2B) payments have been received in the name of the payments business or bank rather than the underlying customer. This can result in reconciliation issues which, in turn, can cause delays in settlement and impact cashflow. The new Banking Circle solutions aim to address these pain points by enabling financial institutions to offer immediate visibility of the sender’s details when processing B2B payments and to collect funds locally into accounts in the underlying customer’s name.
Available globally through SWIFT, Faster Payments, CHAPS, SEPA and local clearing, the Banking Circle POBO and COBO solutions are currently available to payments businesses in 24 currencies and to banks in GBP and EUR, with more currencies and local capabilities planned. Financial institutions can thus manage payments on behalf of their customers, enabling funds to be sent out and received with full payment transparency. The service also enables payments businesses and banks to comply with Wire Transfer Regulations (WTR).
“Existing solutions do not provide institutions with true unique IBANs, with payments often still received in the name of the payments business or bank rather than in the name of the payer”, explained Anders la Cour, co-founder and Chief Executive Officer (CEO) of Banking Circle. “And this lack of payments ownership can lead to reconciliation issues which, in turn, can delay settlement times, thereby impacting on cashflow". He continued: “In response, we have built a solution that allows banks and payments businesses to give their customers access to transparent, local payments and collections across borders, without the need for a physical presence or a relationship with a correspondent bank in that region".
Utilising Banking Circle’s unique financial infrastructure, POBO and COBO provides banks and payments businesses with an optimised end-to-end payment solution and visible payment chain which is WTR compliant. Available via API, UI and SWIFT, the solutions can be accessed by new and existing Banking Circle clients, with a connected or unconnected BIC required by the payments business.