Expert perspectives: Challenges of implementing a payment hub

What it takes to improve payment operations?

For businesses to succeed in the global, digitalized business environment, maintaining financial stability, and effective cash and treasury management is non-negotiable. CFOs, treasurers, and finance professionals know all too well how pivotal effective payments are to financial resilience.

As things stand, it’s no wonder payment hubs are looking like an ever more intriguing investment for proactive businesses to future-proof their payment operations. To explore the matter, I was lucky to have a quick sit down with Pia Charron, a lead consultant  at Nomentia to discuss challenges in payment hub implementation.

But first, some definitions:  

Payment hub, what is that? 

A payment hub is a centralized platform that consolidates, automates, and manages end-to-end payment processes for businesses. It allows organizations to connect with multiple banks and systems, enabling streamlined payment operations across various payment types and channels.

 What payment hubs do? 

Payment hubs are crucial for streamlining payment processes for the following key reasons: 

• Payment hubs provide centralized control and visibility over cash flows, enhancing financial management and decision-making.  
• Payment hubs automate manual tasks, reducing errors, saving time, and increasing efficiency by integrating into critical systems   
• Payment hubs improve security and compliance by implementing advanced fraud detection and payment controls.  
• Payment hubs bring cost savings by reducing systems needed for bank connections and IT resources required to keep them updated. 
  

Payment hub benefits for treasury and finance 

When implemented right payment hubs provide several concrete benefits for finance and treasury teams.

Reports and analytics 
With payment hubs finance and treasury gain a clear view through comprehensive reports and analytics. 

Bank connectivity 

Payment hubs enable host-to-host, local connectivity, and SWIFT integration for seamless banking operations.  

Controls and workflows 

Payment hubs allow businesses to implement company-wide payment policies and standardized controls to ensure compliance and efficiency.  

Format Libraries and conversions 

Payment hubs make it quick and easy to convert your data into the format required by your banks, thanks to pre-built format libraries.  

Two-way communication 

Payment hubs facilitate communication with banks for status updates, payment tracking, and receipt of payment acknowledgments.  

Treasury expert perspective to payment hub implementation

A payment hub is a business-critical solution that supports cash and treasury management. Pia Charron, a lead consultant at Nomentia with extensive experience in treasury and cash management systems, provided invaluable insights into the intricacies of payment hub implementation and the key factors driving its success.

Meet Pia Charron: A treasury expert

Pia's journey in the realm of treasury began over 20 years ago and with an extensive experience like that, there’s precious little she doesn’t know about implementing cash management and payment management systems.

At Nomentia, she plays a pivotal role as a lead consultant, guiding clients through their cash management projects. Whether it's working with large multinational corporations or SMEs, Pia's expertise spans various sectors, offering tailored solutions to meet each client's unique needs.

Challenges of payment hub implementation 

When implementing a modern payment hub there is no shortage of challenges. Luckily, they can be overcome with forethought, careful planning – and support. 

Payment hub – integration with existing systems

“As the needs of the business change, existing systems can become a hinderance. They might not scale, they’re not flexible, and they often rely on manual processes that are time-consuming, error-prone, and eat into operational efficiency."

While on a very rudimental level, all businesses are the same and can have almost identical requirements for their payment hubs, the fact is that they have arrived there through widely differing routes, and with that comes a degree of baggage. As they grow and evolve, companies tend to develop a complex network of systems that all serve differing payment functions like treasury management, ERP systems, and accounts payable and receivable. As the needs of the businesses change, these existing systems become outdated to be fully utilized. They do not scale, they are not flexible, and they often rely on manual processes that are time-consuming, error-prone, and eat into operational efficiency.

Establishing connections with banks and financial institutions adds another layer of complexity to payment hub implementation. Negotiating varying protocols, interfaces, and connections while ensuring compliance with banking standards and security protocols are essential tasks. Seamless data flow and compatibility between the payment hub and external systems are crucial to avoid disruptions in payment operations.

To mitigate risks emerging from integrating payment hubs into existing systems it is advisable to develop a clear understanding and concrete vision about how your payment processes should run post payment hub implementation and how their payment hub is meant to solve their payment process pain points.

Payment hub implementation – data migration and system configuration

"Migrating and cleansing data from multiple sources demands meticulous planning to preserve data integrity. It also provides an opportunity to standardize data formats and resolve inconsistencies to prevent errors."

Any business looking to implement a payment hub is well-served by proactively considering the possible challenges implementing a payment hub poses in data migration and system configuration. Migrating and cleansing data from multiple sources demands meticulous planning to preserve data integrity. It also provides an opportunity to standardize data formats and resolve inconsistencies to prevent errors.

Accurate mapping of data fields is crucial for seamless integration with the payment hub. Adapting existing systems to new payment processes and workflows is a complex task that requires thorough testing. Configurations must align with business requirements to ensure functionality.

Potential disruptions to ongoing operations are a legitimate concern during the payment hub implementation process. Minimizing disruptions requires careful planning and identifying critical processes. An experienced vendor with expertise in data management, system integration, and project management is crucial for success.

Collaboration with experienced professionals and robust tools streamlines the migration process, ensuring a smooth transition to a modern payment hub. With careful planning and the right expertise, organizations can overcome these challenges and reap the benefits of a streamlined payment system.

Payment hub implementation – stakeholder engagement and training 

 "Clear communication and demonstrating the benefits of the payment hub are essential for overcoming resistance to change."   

Effective stakeholder engagement and training play a pivotal role in the successful implementation of a payment hub. Engaging key stakeholders, including finance, IT, and procurement teams, is essential to ensure the alignment of goals and requirements. Collaboration among these stakeholders reduces resistance to change and boosts project success. 

However, gaining buy-in from various stakeholders can be challenging due to differing priorities and concerns. Clear communication and demonstrating the benefits of the payment hub are essential for overcoming these challenges. 

Providing comprehensive training and support to end-users is crucial for the successful adoption of your payment hub. Training programs should cover system functionalities, workflows, and best practices. Ongoing support ensures users can effectively navigate the system and address any issues that might arise. 

Resistance to change is common, especially with the introduction of new technology. Proactive communication and involvement in decision-making can help manage resistance and create a positive culture around change. By engaging stakeholders effectively and providing the necessary support and training, organizations can facilitate a smooth transition to the new payment hub, driving improved efficiency and effectiveness.

Payment hub implementation – cost and resource allocation 

 "Transparency from vendors is also essential. Collaborating closely with vendors ensures a clear understanding of costs and potential hidden expenses."  

As with everything else, cost and resource allocation play a critical role in the successful implementation of a payment hub. Budget constraints often dictate the payment hub project's scope and timeline, influencing decisions at every stage. Expenses encompass various aspects, including software licenses, infrastructure setup, and personnel training.

Effective cost management is essential to ensure the project stays within budgetary limits. Allocating resources for licenses, infrastructure, and personnel is vital. This includes IT personnel for both implementation and ongoing support, as well as necessary hardware and software resources.

Hidden costs such as customization, maintenance, and support should not be overlooked. Evaluating ROI and long-term benefits is crucial for justifying expenditures. This involves assessing cost savings from efficiency improvements, reduced errors, and streamlined processes.

Navigating cost and resource allocation requires careful planning, involving key stakeholders from finance, IT, and procurement teams. Transparency from vendors is also essential. Collaborating closely with vendors ensures a clear understanding of costs and potential hidden expenses. By managing costs effectively and aligning resource allocation with business objectives, organizations can achieve a successful implementation of the payment hub while maximizing return on investment.

Payment hub implementation success 

Implementing a payment hub offers significant opportunities for businesses to enhance cash management and streamline payment operations. Overcoming payment hub implementation challenges requires meticulous planning, effective change management, thorough testing, and clear role delineation. By understanding business needs, following a systematic approach, and fostering collaboration, businesses can navigate through the complexities of payment hub implementation with confidence, paving the way for enhanced efficiency and control in financial operations.

Payment hub implementation best practices

Realizing the full potential of payment hub implementation requires a deep understanding of industry standards, technical prowess, and collaboration with seasoned professionals. As Pia highlighted, the value of an experienced payment hub provider lies in their grasp of finance and treasury pain points, technical intricacies, and ability to offer solutions that answer real business needs. Cash and treasury management are vital functions supporting strategy and liquidity, with payment hubs playing a crucial role. Seasoned professionals on the market for a payment hub benefit from collaborating with experienced vendors who offer insights from numerous implementation projects. This depth of experience is essential for navigating industry standards and anticipating future developments. Therefore, Nomentia consultants draw from their wealth of experience to offer recommendations that consistently earn customer trust, as evidenced by reviews.

Mapping out payment hub implementation best practices: 

Success in payment hub implementation calls for a studied approach.

Comprehensive understanding: Gaining a deep understanding of industry standards, technical requirements, and the specific, business goal and objective related pain points.

Collaboration: Collaborating closely with seasoned professionals and vendors who possess extensive experience in payment hub implementation.

Strategic alignment: Ensuring payment hub implementation aligns with broader organizational strategies, including cash and treasury management goals.

Continuous learning: Staying updated on industry trends and developments to anticipate future needs and challenges.

Transparent communication: Maintaining open and transparent communication channels with stakeholders throughout the implementation process to address concerns and facilitate buy-in.

Thorough testing: Conducting rigorous testing at each stage of implementation to identify and resolve any technical issues or discrepancies.

Training and support: Comprehensive training and ongoing support to end-users ensures successful adoption and utilization of the payment hub.

6 steps to payment hub implementation success

1. Assess your payment infrastructure 

Payment hub implementation starts with understanding your current systems, processes, and data flows to see how the payment hub fits in and what integration points are needed. Pay special attention to banks, bank connections, and connectivity types that need to be assessed and accounted for. Negotiate with your banks whether they can provide automatic bank statements and at what cost. 

2. Plan your payment hub integration strategy 

Once you know what’s needed you should determine how the payment hub will interface with existing systems like ERP, accounting, and CRM platforms. Seek guidance from experienced partners if needed. 

3. Data migration and system configuration 

Cleanse and prepare data for migration, then configure systems to accommodate new payment processes and workflows. 

4. Testing your payment hub 

Thoroughly test your new payment system to ensure accuracy and identify any issues before going live. 

5. Go live and monitor your payment hub 

Roll out the payment hub to end-users, provide training, and closely monitor system performance and feedback. 

6. Continuous improvement 

Iterate and improve the payment hub based on feedback and evolving needs, ensuring long-term value and efficiency. 

Payment hub implementation insights from a treasury expert

As the financial landscape evolves, finance professionals are turning to payment hubs to streamline cash management and payment operations. Fragmented payment systems, manual processes, and lack of real-time cash flow visibility pose significant challenges, leading to inefficiencies and risk management issues. To reach their goals, forward-thinking finance experts are implementing payment hubs to centralize operations, automate tasks, and achieve real-time transaction visibility.

Read more about payment hubs:

• Payment hubs vs. banking portals
  
• The challenges and business impacts of implementing a global enterprise scale payment hub
• How to choose the right payment hub solution
• Can a payment hub help you tackle fraud?