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Just as treasury must nimbly align with evolving business strategy, it requires the same agility for making cross-border payments. The ability to enter a new market and immediately begin sourcing and selling-and to send funds to employees where they need it, when they need it-are basic requirements in a highly competitive global marketplace.

The Challenge: Complexity and Fragmentation

Navigating foreign currency payments is like looking through a kaleidoscope-the picture is one of constant change and variation. But change and complexity bring challenges. Companies face a myriad of country regulations, payment system rules, and formatting standards-including local language requirements-as well as varied local banking practices. Establishing and maintaining local bank accounts is anything but a nimble process. Foreign bank accounts add complexity and cost-more banking relationships, proprietary systems, accounts for reconciliation, currency-related risks and associated fees.

Within this complex and fragmented operating environment, there is increased risk that something will go wrong. Risks include payment delay or failure and a smaller net payment due to lifting fees. Payments could become a point of tension in vendor and customer relationships.

As cash becomes fragmented across multiple bank accounts at the country level, it obscures treasury's visibility into cash flow. This complicates the tasks of forecasting cash, optimizing payment cycle timing, and efficiently deploying working capital enterprise-wide to optimal use. It inhibits the transparency that is vital to mitigating the risk of fraud and complying with Sarbanes-Oxley requirements.

Companies seek a simple solution for handling the complexities of foreign currency payments. But few banking providers can begin to address these challenges. It is critical to choose the right partner to navigate this challenge and complexity-one that prevents problems before they arise and enables the agility and precision that companies require.

The Solution: Simplicity and Integration

"Simplicity is the ultimate sophistication." Leonardo Da Vinci

Citigroup's flagship global cross-border payment solution, WorldLink® Payment Services, integrates and simplifies foreign currency payments. WorldLink® is a non-account based solution, which allows clients to pay in 137 currencies to more than 150 countries through a single window, funded through a single account in one currency. The solution encompasses end-to-end transaction-related activities-payment tracking, repairs and stop payments, electronic notifications, payment confirmation, simplified reconciliation, customer service and more. We provide up-to-date payment guidelines by country.

WorldLink® leverages Citigroup's in-country branch network and a worldwide omnibus account structure for the global presence and local expertise to facilitate streamlined cross-border payments at lower cost with fewer intermediaries. For example, according to Korean country regulations, payments to Korea in Korean won must include the beneficiary's telephone number. Noncompliance results in failed payment. Citigroup facilitates payment through its Korean branch, calling the beneficiary to validate payment.

Broadening the Spectrum: from Cash to Cashless

As client requirements evolve for a broadening spectrum of payments, it is critical for their bank to continually innovate to meet changing needs. For example, stored value cards-prepaid, replenishible debit cards that are not tied to a bank account-are emerging as a cashless alternative for some payments, including mobile employees with per diem travel expenses and payroll for unbanked employees. Clients also need to send cash in the beneficiary's local currency in some instances (e.g., petty cash) but want to initiate these payments electronically in a one-stop shop.

In response, Citigroup's WorldLink® Payment Services is exploring the options of developing the capability for its clients to issue prepaid cards in local currencies to beneficiaries globally. In the near future, clients will also be able to send cash payments in foreign currency to beneficiaries around the world. Clients will have a single window for the full spectrum of their cross-border payment needs-wires, ACH, checks, prepaid card and cash can be sent to their beneficiaries globally.

Improving Financial Performance

Simplifying foreign currency payments lowers cost, enhances operating efficiency, and reduces risk. As foreign currency payment requirements grow in complexity, Citigroup continues to support companies in simplifying the payments process for enhanced bottom-line performance.

To learn more, visit Citigroup's WorldLink® Web site at www.worldlink.com.

By Lenny Valentine, Global Brand Manager, WorldLink® Payment Services

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