What exactly is Verification of Payee, and how does it work?

Matthieu Perret, BNP: VoP is a new regulatory requirement imposed on banks and payment service providers (PSPs) / payment initiation service providers (PISPs) as part of the instant payments regulation. It’s an account-holder verification service that checks whether the IBAN and the name of the account holder are consistent. The response can take several forms: Match, Close match, No match or No result. 

A bank must offer this verification service for all SEPA credit transfers – not just SEPA instant credit transfers – before a payment can be confirmed. SEPA direct debits and non-SEPA credit transfers don’t fall within the scope of the regulation. 

In addition, the service can also verify a specific identifier (such as a corporate identification number). This identifier remains optional: the beneficiary bank must be able to verify it, but not all banks offer this type of check yet. At this stage, coverage for VoP schemes based on optional identifiers remains low. 

The deadline for VoP to be implemented in euro area countries was 9 October 2025, while EU countries outside the euro area must comply by July 2027.  

What has changed in practice since VoP went live?

For payment remittance via e-banking channels, there has been no major technical impact: the bank returns a match or a close match, which may require the client to update its customer or supplier master data. The question is what should treasurers  do when the bank returns a no match response: should they proceed with the payment anyway? 

On host-to-host channels, VoP can be used in batch payment files. French banks have opted for a default opt-out model: to benefit from the service, the company must activate it in its treasury management system or via a dedicated flag in the API code. The response to this VoP request is sent back via host-to-host channels in the form of a payment status report (PSR / CAMT / PAIN 002). 

This means that corporates need to be able to receive, read and process these payment status reports correctly. They also need to check whether their treasury management system already supports these messages and knows how to use them. 

How can companies ensure that VoP works properly for incoming payments?

One of the most important issues for incoming payments is how clearly the company can be identified by its partners. Counterparties need to know the beneficiary’s legal and trading names well enough to route and reconcile payment flows correctly. 

Certain situations are currently causing problems. For example: 

• if PSPs are collecting payments on behalf of merchants and the account belongs to the PSP, the information does not match, even though the transaction is legitimate 

• factoring, when VoP works well when one of the company’s own accounts is pledged to the factor. But when the factor opens an account in its own name to collect funds on behalf of the client, VoP does not match and counterparties turn to the company to validate the account 

• COBO-type (collections-on-behalf-of) structures, where the client does not know the centralizing account, which makes verification more complex 

• virtual IBANs (VBANs), for which the reference remains the underlying physical account. 

Connecting so many PSPs in such a short timeframe sounds like a major challenge: did everything work when VoP went live?

Connecting 3,000 PSPs across Europe in less than 18 months represented a major challenge, but the payment industry managed to get it done. 

The first figures show a match rate of around 66%, and highly variable close match rates depending on banking communities and customer segments (large corporates vs. retail clients). A close match is, however, a transitional situation. Everyone involved needs time to update their databases.  

Also, there may be various reasons that verification is not possible: accounts may be out of scope, banks may be temporarily unavailable due to incidents or outages, and some banks have not joined the VoP scheme. 

In France, the rate of verifications that cannot be performed is below 1%. It is significantly higher in countries such as Austria and Slovenia, whose banking communities have made different implementation choices. The European Payments Council (EPC) is expected to provide further clarifications to support a gradual ramp-up and harmonization of practices. 

Beyond the regulatory and technical aspects, what advice would you give treasurers to make the most of VoP?

There are several steps treasurers can take. These include making sure you correctly state the registered legal name and the account holder name on your invoices. The bank checks against the legal name – adding extra elements such as a trading name or brand name does not always make matching easier. For individuals, the first and last name should normally be enough. 

You also need to look out for local subtleties: some banks do not accept the addition of the likes of “S.A.”, “Plc” or “GmbH” as a perfect match, while others may reject variants with or without dots (“SA” or “S.A.”). 

E-banking channels are essentially now live for VoP. On host-to-host channels, banks are still assessing their capacity to absorb high volumes of transfers and the communication aspects that go with them. 

VoP is not mandatory on digitally signed files, but most banks are considering offering the check even in that context. Some are also working on on-demand services that enable clients to verify files in advance so they can correct and amend them before submission. 

What comes next, and what challenges remain?

Changes to the rulebook are expected in 2026 to improve the service from the banks’ point of view. A version 2, scheduled for 2027, should provide more detailed guidance on functional use cases. 

Dealing with bulk payment files still involves some challenges: as it stands, a bank runs an initial consistency check, then “de-bulks” the file and sends VoP requests line by line to its counterpart, with an obligation to provide a response within five seconds per request. However, a bank generally cannot send more than ten requests per second to the same counterparty, and these need to be processed. You should therefore expect a processing time of a few minutes for a 10,000-line file. For a million-line file, sending it for verification two hours in advance would be wise. The bank will enrich the file with VoP information, and the structure of the original file is preserved. 

ESMA coordinates the application of European directives and regulations in the financial sector. This Paris-based organization is responsible for around 30 pieces of legislation, several of which concern treasurers directly, particularly in the areas of credit ratings, the distribution of financial products and post-trade regulation. “What can you expect from us? An authority that is open, pragmatic, attentive to your concerns and that strives to make clear rules that enable you to win market share,” ESMA Executive Director Natacha Cazenave told treasurers attending the recent AFTE conference. 

CSRD and the Omnibus Directive

Ms Cazenave began by discussing the Corporate Sustainability Reporting Directive (CSRD) and the Omnibus directive, a set of proposed amendments by the European Commission to simplify and reduce the reporting burden that CSRD involves. 

 She recalled a basic principle: “Supervision of sustainability reporting remains the responsibility of the national supervisor”. ESMA brings these supervisors together to harmonize the implementation of sustainability reporting, with the aim of achieving “a common understanding and comparability for investors”. In other words, ESMA works to align national practices so that ESG reporting information is comparable from one market to another.  

She believes that companies’ criticism of CSRD has been heard. “People have pushed back and said ‘This is too much’”. It is in this context that “the Omnibus Directive is intended to simplify reporting” while ensuring that it remains “consistent with what other stakeholders, in particular bank lenders and market investors, need to produce their own regulatory reporting”. The stated objective is clear: to achieve “consistency between the texts” rather than adding successive layers of requirements that pile up with no real coordination. 

Europe in the lead

Europe has established a form of leadership in the field of sustainable finance. The outstanding amount of ESG bonds stands at EUR 2.4 trillion, two-thirds of which are green bonds. According to Natacha Cazenave, this is “a market that is functioning well and continuing to grow”. On 21 December 2024, a new regulation establishing a voluntary market label for funds that invest at least 85% of their assets in sustainable investments was adopted. Under this new framework, which will come into force in 2026, ESMA will be responsible for supervising these fund managers. “More than 30 have expressed an interest in being subject to the new regime.”  

ESG data providers and rating agencies to be treated differently

ESMA is adopting a different approach to ESG data providers and ESG rating agencies, with Ms Cazenave explaining that “There has been a decision not to regulate ESG data providers because there is no uniformity in this area”. ESG rating agencies, by contrast, will be supervised by ESMA. The regulator sees a clear dividing line between highly diverse data aggregators on one hand and rating agencies whose influence on investment decisions merits specific oversight on the other. 

Promoting innovation

Referring to digitalization, crypto assets, stablecoins and the tokenization of assets, Natacha Cazenave noted that “innovation, its abundance and the speed of its development are quite striking”. The EU’s Markets in Crypto-Assets (MiCA) regulation, which establishes a regulatory framework for these new assets, “has been closely watched by regulators in the US, UK and Asia because it is the first attempt to introduce a framework that regulates while still supporting innovation”. ESMA has indicated that it is now working on the authorization of market participants: “we are bringing together national authorities to ensure that a consistent response is provided in each member state when it comes to granting licences”. 

When discussing stablecoins, Ms Cazenave put the topic into perspective: “The amount outstanding – in the region of USD 250 billion – is very modest compared with the financial system as a whole”. On tokenisation, she also explained that ESMA acknowledges the simplification and beneficial use cases offered by stablecoins in diverse fields including post-trade processes and providing access to shares through derivatives. “We are trying to understand innovation, identify where it can support competitiveness and put safeguards in place where it poses risks for investors.” In other words, ESMA sees its role as to support useful innovation while regulating risks where they arise. 

United in diversity

ESMA is working to strengthen the autonomy and efficiency of European markets. Its aim is to support “the financing of priorities such as the digital transition, defence and the environment, which together form Europe’s strategic roadmap”. This is why the European Commission launched the Capital Markets Union in 2015. Although the union’s progress is often criticised as slow, it plays an important role in connecting European savings with investment needs.  

Asked about Christine Lagarde’s wish that ESMA become a kind of “European SEC”, Ms Cazenave acknowledged the flattering nature of the comparison but stressed that the US and European markets are profoundly different. On the one hand, the US is a federal state with a unified institutional architecture; on the other, the 27 member states of the EU must build a common project and share responsibilities in financial regulation.  

Natacha Cazenave made clear the need to preserve this specifically European model, tailored to this reality. “Despite the very strong cultural, historical and linguistic differences between member states, national supervisory authorities are learning and managing to build together. This collective effort is driven by the desire to contribute to the public good.” She concluded by recalling the Union’s motto: “United in diversity.” 

Photo credit: Charles de Toirac

How do you measure the return on investment of a new payment method? This question weighs on the minds of many treasury managers, whose historic role at the centre of all of a company’s payment-related activities has been diluted in recent years. This shift stems partly from pressure by sales and marketing departments, which are often more receptive, if not to innovation itself, then at least to the polished pitches of the payment service providers who target them. On the other hand, the growing technical complexity of payment solutions increasingly requires skills in digital acquisition and customer-journey optimization – areas that are far removed from the traditional remit of the treasurer. 

This intersection of commercial promises, technical complexity and the need for a profitable payment strategy was the focus of presentations by three senior treasury leaders from major brands at the recent AFTE Conference. By comparing their experiences with, and insights, on Buy Now Pay Later (BNPL), the panelists aimed to showcase the value of having a results-oriented expert, treasurer or otherwise, dedicated to turning payments into a lever for sales growth and profitability. 

On stage were three prominent names in French retail: Christian Louboutin, represented by Chloée Daullé, Group Treasurer of this luxury brand that operates in more than 30 countries, with 160 boutiques and a highly active e-commerce business. Thom Group, represented by Jérémy Hugues, Group Treasury Director of this European leader in accessible jewelry, which generates more than €1 billion in revenue per year and is home to brands including Histoire d’Or, Marc Orian, Trésor, Agatha, Stroili in Italy and OroVivo in Germany. Back Market, represented by Laurène Lecomte, Director of Payments and Fraud Prevention at this French refurbished-tech unicorn operating in 17 countries across Europe, the US, Australia and Japan, generating around €3 billion in annual sales. 

Three models, three levels of digital maturity, one shared conviction: that payments are no longer just the inevitable final step in the customer journey, to be controlled for cost. Rather, they are a critical tool to achieve conversion, higher average order value and customer loyalty. 

BNPL: The Three Experts’ Views

At Christian Louboutin, BNPL was initially evaluated through a strict profitability lens. The company’s rule is simple: no new payment method or tool will be deployed without a documented upfront expectation that it will result in a positive ROI. “Providers often promise higher average order value and improved conversion, but we found that BNPL baskets are actually smaller on average than our standard baskets,” noted Chloée Daullé. 

The company’s teams therefore built a framework to systematically assess the reality: before and after comparisons of conversion rates, average order values, total cost (including fees, commissions, etc.), any impacts on fraud, and operational workload. 

“We compare that data to benchmark scenarios to see if the promised gains are actually realized. If the ROI isn’t demonstrated, we either don’t activate the payment method or we restrict it to certain markets,” she continued. 

In a world in which brand image, high order values and risk management are hugely important, BNPL stands out as a textbook case: a potentially interesting payment option, but one that should only be adopted if it proves its worth in reality – not just in sales presentations. 

At Thom Group, BNPL is seen as a trusted partner that has been widely tested in its stores. Customers perceive instalment payments as an option that enables them to buy an expensive piece of jewelry without an immediate major impact on their finances. But from the retailer’s viewpoint, the financial equation must be carefully scrutinized. 

For example, the risk of BNPL cannibalizing a cheaper payment method, rising costs due to poor management of settlement timelines or high default rates could quickly flip the value proposition. Jérémy Hugues highlighted the cost difference between three instalments and four instalments. 

“The financing cost of four instalments is much higher than for three,” he explained. “If customers have the choice, they’ll naturally opt for four. Offering three instalments by default and then presenting four instalments as an option if the basket size increases above a certain threshold makes sense and improves customer satisfaction.” 

This logic illustrates a key belief: “The act of payment is an integral part of the act of sale”. Allowing a customer to buy a slightly more expensive item through financing at no extra cost becomes a way to boost both average order size and customer loyalty. For Thom Group, BNPL is a commercial accelerator, albeit one that is closely monitored by treasury in tight coordination with its commercial teams. 

As an exclusively digital company, Back Market provides another perspective based on data and test-and-learn. For instance, the company has developed a dedicated metric to measure payment-page performance: Successful Checkout Rate (SCR). 

“SCR is the number of people who successfully paid divided by the number who reached the payment page,” explained Laurène Lecomte. “Even someone who closes the tab without trying to pay has a negative impact on the SCR.” 

A/B Testing

To provide more granular analysis, the company breaks down the SCR into two further metrics. The “Click-to-Pay Rate” measures the proportion of customers who click “Pay” once they reach the page, while the “Transformation Rate” is the ratio of successful payments to the total number of customers who clicked “Pay.” 

“When you add BNPL, the Transformation Rate tends to drop because some customers are rejected for credit reasons. But what matters is whether we generated more payment attempts and ultimately more sales, leading to a higher SCR,” she said. 

Back Market’s A/B tests produced a striking result: removing a BNPL option reduces overall conversion. Different customer segments prefer different BNPL providers, so getting rid of one closes the door on a proportion of potential buyers, even if the overall offer looks similar on paper. In a highly competitive marketplace, the variety and quality of BNPL options becomes an important differentiating factor. 

Organizing Payments Internally

Beyond BNPL, a broader question is: who within a company determines its payment strategy? Who is best placed to find the right mix between commercial promises, brand implications, fraud risks, operational impacts and ROI? 

Back Market adopted a strong stance early on by creating a Payments & Fraud department even before it structured its Finance organization. This team, which reports to Finance, acts as a true “business owner” in relation to product and technology. 

“Payments and fraud are so strategic that we put in place a team dedicated to these areas very early on,” explained Laurène Lecomte. This team works with “dedicated Product counterparts and dedicated Tech teams – about 30 people”, while “the accounting team is always involved and makes an essential contribution.” 

Thom Group’s set-up is more traditional, with treasury playing a central coordinating role. “Treasury acts as the safeguard and coordinator to ensure an overall, balanced view,” said Jérémy Hugues. He noted that in many organizations, operational leadership of payments is shifting toward digital departments or the Chief Digital Officer. But there are still some non-negotiable principles: “Treasury must be involved – or involve and assert itself – in all discussions about payment methods, and it must lead any RFP or decision to activate a new payment method.” 

At Christian Louboutin, treasury acts as a pivot between commerce, IT and finance. It coordinates the firm’s e-commerce and retail teams, manages the selection and relationships with payment service providers and banks, and directly oversees fraud-risk management and related tools. 

Three Examples of Winning Strategies

BNPL is just one illustration of how payments can act as a driver of commercial success. With this in mind, each speaker highlighted a recent payments success for their company beyond instalments. 

Back Market showcased its project to orchestrate payments. By putting multiple acquirers in competition with each other, fine-tuning transaction-routing rules and making the most of local specificities, the platform has significantly increased acceptance rates. By directing certain cards to domestic acquirers belonging to the same group as the issuing bank, Back Market gained “nearly ten percentage points of conversion in some segments”, generating “several million euros in additional revenue”. For Back Market, payments are clearly a growth engine in their own right. 

Thom Group’s SoftPOS project demonstrated a direct link between payments and revenue. In a jewelry network that comes under considerable pressure during peak periods, processing transactions quickly is critical. Turning smartphones and mobile devices into full checkout points has helped reduce queues and cut down on lost sales. 

“The project enabled an average of 20% of sales to be processed via this channel during peak periods, with peaks above 50% in some stores,” explained Jérémy Hugues. It “prevented lost sales and justified the cost of deploying the technology through direct increases in revenue.” 

At Christian Louboutin, preventing fraud has become a real driver of performance. Previously it relied on a standard scoring tool and was faced with a high volume of manual reviews – around 15–20% of transactions – and an excessive rejection rate. This compelled the company to transform its approach, implementing a machine-learning-based system using an enriched dataset. 

“The percentage of transactions we had to review manually was cut in half, rejections dropped sharply and tools to support decision-making considerably streamlined our processes,” explained Chloée Daullé. The result was a marked increase in the acceptance rate, reduced processing time and an increased focus on high-value customers, “all while maintaining stable fraud levels.” 

With this, the discussion turned to the topic of fraud. For Jérémy Hugues, the goal is not “zero fraud”, which is unrealistic, but finding the right balance. 

“Zero fraud is not necessarily optimal fraud management,” he said. A zero chargeback rate may reflect excessive blocking of legitimate transactions, silently destroying revenue in the process. Analysis must drill down into the reasons a payment is rejected (payment service provider, issuer, internal rules) and the authentication journey, particularly 3D Secure. 

“Too much 3DS means less frictionless flow, and therefore lower acceptance,” he added. Fraud management becomes “a balancing act between the level of fraud and the acceptance rate”, which must be jointly managed by treasury and business teams including commerce, digital and customer service. 

At Back Market, Laurène Lecomte has observed the rise of what she calls “commercial fraud”: abuse of return policies, refund fraud and “commercial chargebacks.” “Customers exploit what is an inherent uncertainty in marketplaces: who’s right – the seller or the buyer?” she noted. “Fraudsters adapt, and commercial chargebacks have moved to the front line.” The company’s response has involved strengthening its refund processes and using AI to detect recurring patterns and abnormal behavior. 

Throughout the discussions, one point stood out clearly: payments are no longer merely a cost center. From BNPL to payment orchestration, SoftPOS, conversion KPIs and nuanced fraud management, payments have become a strategic field in their own right. The one condition is that an expert – a treasurer, payments director or a hybrid of the two – must take clear ownership of the topic in question and have an unerring focus on turning each benefit promised by a payment method into measurable value for the company. 

A brief history

The modern interchange fee structure in the US emerged in the 1970s, when card networks such as Visa and Mastercard introduced standardised fees. The goal was straightforward: to compensate issuing banks for the cost and risk of handling card transactions. At the time, this model was viewed as a fair mechanism for balancing the needs of merchants, banks, and cardholders.

Over the decades, however, interchange fees in the US evolved into something far more complex. What began as a relatively uniform set of charges quickly splintered into hundreds of categories. A major turning point came with the rise of credit card rewards programmes. To fund airline miles, hotel points, cash back, and more obscure perks such as contributions to healthcare savings accounts (HSA/FSA), issuing banks relied on interchange fees as their revenue stream. In effect, merchants’ payments subsidised the cardholder benefits that made credit cards more attractive.

Today, the US system is highly fragmented, with fees that differ based on dozens of variables: the type of card, whether the transaction is conducted in-person or online, the merchant’s industry classification, and even the compliance steps taken during processing. Despite periodic promises by networks to reduce complexity, the number of interchange categories continues to grow. In 2025, merchants navigating this system face a labyrinth of opaque rules that often require expert guidance to manage effectively. It is also worth mentioning that the card networks adjust their rules two times per year, in April and October.

A transatlantic contrast

For Europeans, the US interchange model often appears bewildering and unnecessarily costly. In the European Economic Area (EEA), interchange fees have been progressively harmonised and capped following the introduction of the Interchange Fee Regulation (IFR) in 2015. The EEA caps interchange at 0.20% for debit and 0.30% for credit card transactions, creating predictability and relative simplicity – as well as the opportunity for alternative payment methods to flourish.

The US is the polar opposite. According to internal Redbridge data, interchange fees make up an average of 86% of total merchant transaction costs. This is significantly higher than in the EU, where other components of the ‘swipe fees’ (such as network assessment/scheme and acquirer processing fees) represent a more balanced share of the total.

For European businesses accustomed to flat, transparent structures, entering the US market can be a rude awakening. The variability of fees introduces uncertainty into cost forecasting, complicates financial modelling, and demands far greater operational oversight.

The role of regulation in the US

Unlike the EU, the US has not imposed broad interchange caps. The most notable regulatory intervention was the Durbin Amendment (2010), which limited debit card interchange fees for banks with more than USD 10 billion in assets. Debit fees, once averaging around 1.2%, were reduced to approximately 0.05% plus USD 0.21 per transaction for covered issuers with an additional USD 0.01 for fraud adjustment. It should be noted that the Durbin Amendment is under scrutiny, with the US already considering reductions – and a recent federal case coming from South Dakota has challenged the Fed’s calculation. Important to note, the federal judge immediately stayed their ruling.

However, credit card interchange remains untouched by federal caps. Networks and issuing banks continue to set credit fees at market-driven rates, which has contributed to the persistence of high costs. Lobbying efforts by card networks and banks have repeatedly stymied proposals to regulate credit interchange fees more aggressively.

For European businesses, this is an important cultural difference: whereas EU regulators view interchange as a consumer protection issue, US policymakers often frame it as a market negotiation between private actors.

Anatomy of a US interchange fee

Understanding how interchange fees are set in the US is critical. While fees vary, the following factors typically play the largest role:

1. Card Type – Premium rewards credit cards carry higher fees than basic debit cards. Merchants pay more when customers use cards that generate generous perks. This is further expanded by the distinction between commercial and consumer cards.
2. Transaction Mode – Card-present transactions (e.g., in-store with EMV or contactless) usually cost less than card-not-present transactions (e.g., online or over the phone), which are deemed riskier.
3. Merchant Category Code (MCC) – Different industries pay different rates. For example, supermarkets may enjoy preferential pricing compared to luxury retailers.
4. Processing Compliance – Merchants that fail to meet technical requirements may be routed into higher-cost categories.

A simple purchase at a US coffee shop might carry an interchange fee of 1.90% + USD 0.04, while an ecommerce purchase using a premium rewards card could easily exceed 3%. Multiply these differences across millions of transactions, and the financial impact on merchants becomes substantial.

Why merchants should care

For merchants, interchange fees are not merely an abstract banking mechanism – they represent a tangible operating cost. In the US, interchange is often the second-highest expense after labour. For low-margin industries such as grocery or fuel retailing, even a small difference in fee structure can determine profitability.

European merchants expanding into the U.S. need to grasp that interchange fees are partly unavoidable yet highly manageable. Without close monitoring, businesses may overpay simply because they lack visibility into how transactions are categorized. For example:

• A hotel chain that doesn’t configure its payment systems correctly might inadvertently route transactions into a higher-cost category.
• A retailer that fails to update its fraud-prevention tools might face elevated fees for online payments deemed “riskier.”

In both cases, merchants pay more without realizing that compliance and optimization could significantly reduce costs especially, as with most things within the payments.

Strategies for Managing Interchange Costs

For merchants facing the U.S. landscape, the key is not to fight interchange directly but to . Practical strategies include:

1. Transaction Routing;
2. Data Quality & Compliance;
3. Payment Method Selections;
4. Chargeback Management;
5. Regular Audits;

Large enterprises often employ dedicated treasury or payments teams to handle this, while smaller businesses may rely on outside consultants.

Impact on Consumers

While merchants bear the direct cost of interchange fees, consumers are indirectly affected. Higher merchant costs are frequently passed on in the form of increased retail prices and, in some cases, passed on directly via surcharges. Yet American consumers have grown accustomed to lucrative rewards programs, which are effectively funded by these higher merchant costs.

This dynamic creates tension between merchants, card issuers, and cardholders: merchants see interchange as an unfair subsidy for affluent cardholders who use premium rewards cards, while issuers argue that rewards drive consumer spending and loyalty, and taking away rewards would cause pandemonium amongst cardholders. In the EU, where interchange is capped, rewards programs still exist but lack ubiquity and are notably less generous.

Looking Ahead: Future Trends

Several developments could shape the trajectory of U.S. interchange in the coming years:

• Regulatory Pressure – Renewed legislative proposals in Washington occasionally resurface, particularly from merchant advocacy groups pushing for credit fee caps.
• Technological Change – Alternative payment methods such as real-time payments, account-to-account transfers, and mobile wallets could erode reliance on card-based payments.
• Merchant Collaboration – Large merchants have begun banding together to negotiate with networks, potentially shifting market dynamics.
• Consumer Expectations – As consumers demand seamless, low-cost payments, pressure may mount on issuers to rethink fee structures.

It should be made clear that it will take major advancements on all the aforementioned developments to create meaningful change. In the immediate future, this seems unlikely. For European merchants, staying informed about these shifts is crucial to long-term planning.

Final Thoughts

For European merchants, the contrast between the predictable, regulated EU interchange framework and the opaque, sprawling U.S. model cannot be overstated. Entering the U.S. market without understanding interchange is a recipe for cost overruns and diminished profitability.

The takeaway is simple: in the EU, interchange may be a background factor. In the U.S., it is a strategic necessity. Merchants that invest in understanding and managing interchange will enjoy a competitive edge, while those that ignore it risk eroded margins and reduced operational flexibility.

A pulse check of European treasury teams

Asked in session which activities AI would be useful for, treasurers cited cash forecasting first (38% of responses), followed by process automation (32%). However, more than half of respondents said their company still does not use AI for forecasting, while nearly a third said they are “exploring” how to use this innovation.

92% of participants in the session dedicated to “AI & Automation” indicated that they use AI in their daytoday treasury activities. This very high percentage may reflect a sophisticated—if not selfselecting—panel attending the session. But when the question turned to how AI was being used, the answers were more downtoearth: drafting and polishing emails, summarizing long threads and presentations, and analyzing data that would have taken hours to prepare just a year ago.

AI in treasury processes

The various sessions provided an overview of how treasury teams are experimenting with AI. Kathy Brustad, Director, Global Treasury and Financial Services at Microsoft, explained how her treasury department uses machinelearning models to help predict late payments and strengthen its cash forecasts, while using generative AI to convert plainEnglish questions into SQL to query structured datasets. The result: shorter forecasting cycles, fewer routine errors and more time devoted to decisionmaking.

Microsoft is not the only treasury to have experimented with AI to improve forecasting reliability. A year ago, Redbridge wrote about the longterm project pursued on the same topic by Groupement Les Mousquetaires. In both cases, teams deliver the same lesson: to reinforce cashforecasting processes with AI, you need clean data, clear governance and a sharpeyed specialist to correct model and dataset bias and drift in near real time.

FX and hedging: human judgement still vital

At the EuroFinance conference, AI also came up on the topic of managing FX operations—but always with human intervention. Nita Baindur, Associate VP, Assistant Treasurer at Agilent, stressed how AI can help map exposures more systematically, propose hedges and detect anomalies. “There’s human judgment involved in deciding how much to hedge,” she said, adding that: “Even if AI gives you the answer, you are finally accountable.”

“AI is not replacing us” – and why that matters for operating models

The title of a workshop stated clearly that: “AI is not replacing us.” As Garima Thakur, Treasurer at Creative Artist Agency noted, the real advantage of AI lies in the speedup of long processes. Her conclusion was – also – that treasurers will still be making the decisions, but their skill mix is changing

The workshop entitled “Coding for treasurers: prompt engineering for efficiency” highlighted handson ways to improve data processing and interoperability between information systems. Mario Del Natale, Treasury Director, Global Digital Treasury at Johnson Controls, showed how precise prompts and lightweight code can streamline reporting and the handling of data. His take? Overstretched IT teams cannot process every request from the treasury team quickly. Treasurers who can code—supported constructively by IT—will therefore help create value faster.

Bots and automation

Robotic Process Automation (RPA) is adapting to the advent AI. Experts on the panel “Treasury process automation: the evolution of RPAs with AI” panel discussed how “intelligent” bots can now handle more complex flows, interoperate via APIs and reduce reconciliation issues across systems. Speakers from Booking Holdings and BAT described how modern RPA can help bridge interoperability gaps across the information systems used by finance leadership, while unanimously emphasizing the value of a broader data and systems strategy rather than a simple corrective for flawed inputs.

A bot can either be a tool to speed up a process or a sign that upstream data needs fixing. In a quick survey during the stream, a majority of treasury teams said there is still no formal automation of any of their activities, while around a third (32%) said they use RPA bots and a smaller share (10%) said they already combine RPA with AI.

APIs: harder to implement than the brochures suggest

Without structured data on hand, even the best model is bound to fail. The panel “Advancing APIs: nextlevel interoperability and automation” brought together representatives from Bolt and Groupe Legris treasuries alongside provider Kyriba. The panelists explained how APIs reduce manual work and strengthen groupwide cash visibility, while noting that there is often a stubborn “last process” at the ERP or TMS level that is difficult to automate.

The session also hinted at API fatigue among a number of treasurers. BAT in particular indicated that it had stopped its projects after encountering cost, complexity and uncertain ROI. In the crosshairs: inconsistent interoperability standards and persistent dataaggregation issues that transform what should be “plugandplay” solutions into months of internal work, at the expense of higherpriority matters. A pragmatic path forward is to use prebuilt connectors where they exist and to focus on highvalue, lowcomplexity projects—in short, to manage APIs as a project portfolio with clear stage gates and kill-criteria.

Data lakes and visualization

The “Data lakes: creating and connecting data to treasury systems” session explored how centralizing bank, ERP, TMS, market and portal data helps build consistent datasets for forecasting, liquidity planning and risk analytics. It represents a first step for AI to help in identifying and preparing those datasets for downstream models. Success in this area is less about using a platform from a widely recognized brand than about governance. Crossfunctional work by IT and accounting departments is key for the success of such projects.

Once the data is trustworthy and combined, visualization becomes a lever of success. The “Show me the data again—visualisation tools for treasurers” session underlined how interactive dashboards, charts and narratives help move treasury from reporting to insight. This is where generative models are already proving useful by summarizing movements, highlighting anomalies, drafting commentary and preparing executiveready views, provided the underlying data is complete and up to date.

Governance, risk and the AI question

Treasurers repeatedly emphasized the importance of data privacy, security and data analysis. The “AI is not replacing us” piece captured the dynamic well: while some companies are testing inhouse models to keep control of sensitive data, others are using external models but with strict approvals and strategic controls in place. In every case, legal, IT security and treasury teams sit around the same table. The model that will fit your environment will depend on your risk appetite, your regulatory framework and the maturity of your data architecture.

Throughout the event we found that participants were all coming to the conclusion that to improve their payments processes, companies need to introduce change deliberately, measure everything, and base decisions on what the data is telling them. This is exactly the kind of stance that Redbridge has long advocated.

Fraud – the battleground has shifted to agentic commerce

Participants at the summit explained how the threat of fraud is evolving as AI agents enter the commerce ecosystem. In fact, a new form of “agentic fraud” is emerging. Automated agents can mimic human browsing patterns, place orders and even escalate spurious disputes. For risk practitioners, detecting these bots is a real challenge.

Two techniques are helping in the battle against agentic fraud.

First, centralizing payments data across acquirers, gateways and internal systems enables merchants to detect evolving patterns and reduce false positives. The challenge here is to clean and normalize the data.

Second, using adaptive analytics – risk models and rules that update as behaviour changes – is essential. Attack surfaces – the sum of all potential entry points and vulnerabilities in a system, network or organization that an attacker can exploit to gain unauthorized access, steal data or cause harm – are expanding. When companies rely on fragmented data, they decline too many good customers but still miss coordinated attacks. For instance, the Merchants Risk Council’s 2024 annual report states that merchants rejected an estimated 6% of e-commerce orders they received during the year due to suspicions of fraud, and most report “customer insult” (or false positive) rates of between 2–10%.

Chargeback rules are also evolving. Visa’s Compelling Evidence 3.0 framework allows merchants to use prior undisputed transaction history to rebut first party misuse (when a cardholder disputes a legitimate transaction, either unintentionally or intentionally) more efficiently. This should prove useful against disputes triggered downstream by agent mistakes or opportunistic abuse. But evidence only helps if you can retrieve it, which is another argument for consolidating and governing your payments data centrally.

Meanwhile, industry guidance on agentic commerce is highlighting the importance of a new control objective: Know Your Agent. Tokens, authentication flags and standardized “agent identity” signals will matter as much as device and behavioral telemetry in separating helpful automation from hostile automation. Visa, Mastercard and other companies have begun to define these signals, and risk leaders need to develop detection and authorization strategies that assume agent-originated traffic will become the norm, not an exception.

The rise of AI-driven transactions: from concept to reality

Agentic purchasing is moving rapidly from slides to pilot schemes. Visa has introduced its Intelligent Commerce service and related tools to enable trusted AI agents to pay on behalf of users. Mastercard has outlined agent-ready services and partnerships to make agent-led payments safer and more interoperable. Meanwhile, large platforms and assistants are stitching payments into conversational experiences, most recently with partnerships that bring wallet checkout directly inside AI interfaces. This currently involves low-complexity purchases and reorders, but over the medium term is likely to extend into paying for travel, tickets and recurring services.

Many merchants are understandably unprepared for this traffic. They need to respond with pragmatic experiments woven into existing payment flows, starting where risk is concentrated and the return on investment measurable. This could involve, for example, allowing agent-initiated reorders for known customers; limiting agent purchases to preapproved baskets with spending caps; requiring tokenized credentials and explicit strong customer authentication where appropriate; and measuring the journey to compare agent vs. human performance in terms of acceptance, fraud, return and Net Promoter Score outcomes.

Data, user experience and checkout optimization: small changes, big improvements

Conversations at the summit repeatedly returned to the problem of conversion left on the table due to fussy forms. Simple UX changes like reordering address fields, improving autocomplete or accepting multiple postcode formats can increase authorization success by reducing typos and address verification service (AVS) mismatches. Many years of checkout research shows that most sites still involve avoidable friction, and that targeted improvements can result in double-digit conversion gains.

On the risk side, aligning AVS and KYC controls with real fraud patterns rather than blanket rules reduces unnecessary payment declines without weakening defences. Payment providers explicitly advise calibrating how much weight you assign to different AVS codes; similarly, modern risk platforms allow more nuanced post-authorization handling based on the combination of address signals, tokens and history. When required, additional identity verification requirements should be proportionate and contextual. KYC friction is a known cause of abandonment in financial onboarding.

Better data plumbing is vital. Teams that consolidate acquirer, payment service provider and internal data – and then interrogate it with the right KPIs – are best placed to spot fixable declines, isolate issuer-specific problems and distinguish genuine fraud from friendly mistakes. That is precisely the aim of disciplined payments analytics, with clean, centralized data powering operational decisions across acceptance, cost and risk.

Stablecoins: high potential, low adoption

Stablecoins are gaining an outsized share of industry attention relative to their actual checkout use. According to EY-Parthenon estimates, stablecoins could account for 5–10% of global payments, with most of this in the form of cross-border and treasury workflows rather than consumer payments. Among companies accepting stablecoins payment, a meaningful share report double-digit cost savings when the flows are well designed. Overall, we are seeing promising signs for corporate treasurers, especially in the USD/EUR corridor, but cautious merchant demand.

The Bank for International Settlements continues to warn about the operational risks that stablecoins involve while acknowledging their potential cross-border efficiencies. Meanwhile, the ECB has raised concerns about deposit flight and stability if interest-bearing stablecoins are increasingly adopted. Merchants need to explore targeted use cases such as faster settlements in specific markets, supplier payouts or treasury transfers.

Open banking and regulation: unlocking value responsibly

Open banking is delivering genuine improvements both in terms of savings and user experience, especially where bank-to-bank (Account-to-account or A2A) payments can be combined with instant refunds, personalized incentives and one-click repeat purchases. Adoption in the UK continues to increase, but card-like protections and rewards remain the most important factors for consumers. Overlay services and better user journeys will help A2A move from niche into the mainstream.

Two regulatory developments are particularly relevant to open banking. First, mandatory reimbursement in the UK for Authorized Push Payment (APP) fraud on Faster Payments came into effect in October 2024. Second, the Data (Use and Access) Act 2025 modernizes data sharing and “Smart Data” frameworks, expanding the lawful bases and governance of data access. The changes will affect how merchants, payments service providers and fintechs collect and share payment data.

Combined, these two developments will reward merchants that are compliant with data use standards and provide attractive incentives to consumers (such as cashback, loyalty accrual programs and instant refunds) and explicit clear ways to dispute payments.

The subscription model: from recurring revenue to long-term value

The subscription economy has transformed how digital products and services are delivered. In sectors like streaming, SaaS, gaming, and digital media, recurring models offer clear advantages: predictable revenue for providers and uninterrupted access for consumers. But acquiring subscribers is only the beginning. Long-term value stems from retention, and in subscription businesses, retention hinges on whether payments go through.

Each billing cycle brings a new risk. When a payment fails and is not recovered, customers may leave even if they did not intend to cancel. This involuntary churn is often overlooked but can make up to 50% of total churn, according to Stripe. Focusing on this area offers a practical way to improve profitability without needing to increase marketing or change the product or service.

Why payment strategy is critical

Many payment failures are recoverable. Improving retry logic, payment routing, and customer communication can significantly reduce failed transactions and keep users active. Several levers are particularly effective.

1. Clear customer journey and proactive communication

Not all failed payments are permanent. A transaction that was declined today may be processed successfully a few days later due to changes in available funds or issuer authorisations. Proactive dunning communication is essential, as clear and timely notifications by email, SMS, or push messages should encourage customers to update payment details or resolve issues quickly. Additionally, providing direct one-click links to update cards or complete payments improves recovery rates while preserving a positive user experience.

2. Smart retries and innovations

Smart retry logic, often enhanced by artificial intelligence (AI) and machine learning (ML), adapts dynamically to the specific reason a payment failed, whether it is due to insufficient funds, a temporary issuer-related issue, or another cause. It also considers optimal retry timing, such as immediately after payday, as well as issuer preferences, retry windows, and historical success patterns. This data-driven approach improves recovery rates while preserving a smooth customer experience.

At the same time, technologies like network tokenization replace static card details with secure tokens that remain valid even when cards are reissued or expire. Card account updater services automatically refresh stored card information with the latest issuer data, minimising disruptions without requiring any action from the customer.

3. Routing and redundancy

Relying on a single payment service provider (PSP) or acquirer exposes businesses to unnecessary declines, as authorisation success rates vary by geography, issuer, and transaction type. Temporary outages or updates to fraud rules can also cause spikes in payment failures.

Routing transactions through multiple providers or setting up fallback options reduces dependency and improves approval rates. This is especially important for international businesses because local acquirers often perform better in their own markets than in other ones. In many cases, payment orchestration becomes not just a nice-to-have, but a strategic necessity. Orchestration can play a key role in supporting digital transformation efforts, helping organisations overcome legacy technology constraints and enabling more agile, future-proof payment infrastructures.

Ultimately, the goal is to make payment recovery simple and seamless, treating customers as valued users rather than penalising them for payment issues. Since no single payment system design fits all business models, conducting a thorough assessment before defining the target payment architecture is essential for most merchants.

Payments as a driver of growth and retention

Reducing churn is not just about retaining customers. It also directly affects profitability, marketing efficiency, and company valuation. In subscription businesses, small improvements in churn or recovery rates can have a significant cumulative impact, especially when applied to large user bases or high customer acquisition costs. Investors are increasingly scrutinising metrics such as:

1. Gross revenue retention (GRR),
2. Net revenue retention (NRR),
3. Customer lifetime value (LTV).

Each is influenced by how well payment failures are handled.

To understand and reduce payment-related churn, businesses need the right metrics. These should go beyond traditional finance KPIs and capture the dynamics of failure and recovery. Key indicators include:

1. Involuntary churn rate (as a share of total churn),
2. Approval rates,
3. Recovery rates,
4. Average time to resolution for failed payments.

Conclusion: design for renewal, not just acquisition

Subscription payments are recurring moments of truth. Each billing cycle is an opportunity to confirm value or lose customers silently. Robust payment systems using smart retry logic, flexible routing, network tokenization, card updater services, and customer-centric communication form a vital strategic lever for growth.

In today’s competitive environment with rising acquisition costs and fragile loyalty, treating payments as a strategic growth tool rather than mere plumbing is essential for sustainable success.

Why do treasury centers so rarely take a close look at their bank fees?

– Dino Nicolaides: Treasury centres usually play a significant role in the efficiency and effectiveness of the treasury operations of a multinational group. Consequently, they are not exempt from the same challenges faced by any treasury department when it comes to tracking and optimising bank fees. 

In general, the fees associated with bank services are often pushed down the list of priorities by finance departments, overshadowed by other, seemingly more strategic areas of banking relationships. For treasury centers—whose banking relationships are often determined at group level — managing the cost of these services tends to fall even further down their operational focus. 

Furthermore, the inherent complexity of measuring and monitoring the cost of bank services imposes an additional challenge. Account analysis statements are rarely transparent: invoices can be difficult to comprehend as they are filled with technical service codes, which makes it hard to accurately assess service performance and cost. Many treasurers admit that they lack reliable benchmarks and analytical tools to evaluate these fees in detail. In the absence of a comprehensive fee database, discussions around cash management costs often remain superficial. Ultimately, treasury centers end up tolerating fee levels at far higher levels than what they should be. 

There is also a lingering concern that pressing too hard on costs could damage the banking relationship. Yet with the right approach, it is entirely possible to secure far more competitive terms while preserving — and even enhancing — the balance of the relationship. 

– What are the key steps to a successful renegotiation of bank fees? 

– The process begins with collecting and centralising account analysis statements so that data and facts speak for themselves. We start with a detailed review of the invoices to clearly identify which services are being charged, and at what volumes. This analysis helps uncover erroneous charges, eliminate unnecessary services, and refocus spending on those bank services that genuinely add value to the treasury function. Because this is a laborious piece of work for a treasury function, we, at Redbridge, have a specialised Data Team who can seamlessly complete this task as it is indispensable to establish the facts. 

Once this detailed analysis of partner bank pricing is at hand, the next step is to assess the competitiveness of each service. At Redbridge, we draw on a unique global database—built over 25 years of engagements with European and American corporations of a global spectrum. Using our proprietary technology tools, we benchmark every fee line in any part of the globe to quantify the savings potential. 

Armed with this analysis, we then move into structured negotiations with banks — typically through an RFP, or via bilateral negotiations — while maintaining a balanced and constructive dialogue. This three-step method—analyse, benchmark, negotiate—makes all the difference. In the end, what was once seen as an unavoidable fixed cost becomes a source of lasting optimisation. 

Beyond bank fees, what other optimisation opportunities should treasury centres explore to maximise gains?

– Optimisation should not stop at the pricing schedule. There are also other sources of savings available to Treasury Centres. 

Let’s start with FX costs and more specifically FX margins. The spreads banks apply to foreign-exchange transactions (spot/forward/swaps) represent a non-trivial expense for companies with large international flows. We frequently observe significant margin differentials from one bank to another for similar currency pairs and transaction sizes. A detailed analysis of the components of these margins, benchmarked against market pricing, often reveals substantial potential. A structured renegotiation of FX terms can yield much more competitive rates without changing banks, FX platforms or disrupting daily operations. It is a form of painless optimisation of a cost line that is often under the radar. 

Another avenue is the yield on deposit balances. This topic has returned to center stage with the normalisation of interest rates. During the years of negative rates, many treasury centres allowed liquidity to sit idle in non-interest-bearing current accounts, considering the issue of insignificant value — some even paid to maintain excess balances. Today, with positive rates, failing to put excess cash to work entails a real opportunity cost. It is therefore worth revisiting how these balances are remunerated by negotiating better terms with banks for surplus cash at the Treasury Centre or business unit level. 

So, is it essential to take an exhaustive view of banking service optimisation?

– Precisely. The winning approach is end-to-end. Rather than treating each topic in a silo, cash management fees separately from FX or yield on deposit balances , they should all be considered holistically as there can be synergies in a holistic optimisation. 

The results speak for themselves. In a recent project for a large international group, renegotiating cash management pricing alone offered strong savings. However, when the client decided to extend the optimisation to FX costs and yield on deposit balances, total potential savings increased by five times. To put things into context, before our project, the client paid €1.07 million annually in bank fees across five countries. After our optimisation across all parameters highlighted above, the cost line was transformed into a net revenue stream as the negotiated yield ended up being higher than the optimised costs  — all achieved while safeguarding and reenforcing the client’s bank relationships (see graph below). 

Example – Holistic Renegotiation of Bank Fees 

Scenario A: renegotiation of bank fee pricing grid only
Scenario B: integration of FX cost optimisation
Scenario C: holistic renegotiation including yield on deposit balances 

Source: Redbridge – Cash Management Advisory, September 2025 

In conclusion

– Can you summarise Redbridge’s approach to optimising bank fees and services and explain why it is suited to even the most complex environments? 

– At Redbridge, we explore a range of solutions to help clients manage multi-account and country treasury operations more efficiently. What matters is an end-to-end and dynamic perspective: combining the best technology, robust market benchmarks, and human expertise to drive continuous optimisation. In complex environments—with multiple banks, accounts, and currencies—this approach turns complexity into an opportunity. Every account, every bank service, every cent of fees can be reviewed within the framework of existing partnerships. The outcome is a triple benefit: substantial savings, enhanced operating efficiency, and greater transparency for the treasury function. To treasury centers, the message is optimistic: even with structural constraints, meaningful room for improvement exists. With a structured approach, you can regain control of bank fees and unlock value where none seemed to have ever existed. 

The liquidity coverage ratio – an indicator of companies’ capacity to meet their debts due within a year – remains solid, although it has been gradually declining since 2018.

In what has become an environment of tighter credit, with banks becoming increasingly selective in who they lend to, Redbridge is urging treasury departments to fully integrate lenders’ return logic into their funding strategies. The adoption of the finalized Basel III regulatory framework is prompting banks to adjust their lending policies.

Study findings

Redbridge’s 15th annual study on the financing of companies in the SBF 120 – an index of the 120 most actively traded and largests companies listed on Euronext Paris – covered the 2024 financial statements and developments in the first half of 2025 for 84 index constituents.

• Working capital requirements seem better controlled than in 2023, as shown by the improvement in the cash cycle, mainly due to a decrease in trade receivables.

• Net debt levels have risen due to a drop in cash levels. Leverage has fallen to around 2x.
• Liquidity coverage has been falling since 2018. At the end of 2024 it stood at 2.4x, down from 2.8x one year earlier.
• The decline in interest rates in Europe has not yet translated into lower financing costs for SBF 120 companies, as most of their market-issued debt is at fixed rates.
• Banks remain active lenders but more selective in who they provide liquidity to. Meanwhile, private debt investors are eager to deploy their abundant liquidity but the rates they are offering are still high.
• For companies, understanding lenders’ profitability logic (RAROC / RoRWA) is key in negotiating with their banking syndicate. Showcasing the side business (in other words, non-core revenues or services) that companies can bring to their bank has become indispensable.

According to Didier Philouze, Managing Director, head of debt advisory at Redbridge:

“The financial health of most companies remains solid, but we have witnessed a steady erosion of credit indicators over the past four years, and this is now drawing banks’ attention.”

Matthieu Guillot, Managing Director, debt advisory at Redbridge, commented:

“Broader consultations with new lenders, including international banks or regional affiliates of mutual banking groups, make it possible for companies to preserve access to abundant liquidity – provided their requirements in terms of business plans are well integrated.”

Muriel Nahmias, Managing Director, debt advisory at Redbridge, added:

“Even if banks speak little of it, capital requirement regulations are becoming stricter. Borrowers with implicit ‘investment grade’ profiles – whether unrated or crossover – must factor the impact of the finalized Basel III framework into their financing strategies, as it could be less favorable to them.”

The full study is available upon request.

About Redbridge

Founded in 1999, Redbridge Debt & Treasury Advisory provides the world’s leading companies with data-driven advice for more profitable outcomes. With teams in Paris, Geneva, London, New York, Chicago and Houston, Redbridge has conducted more than 750 assignments ranging from strategy design to operational implementation over the past ten years, helping companies optimize their financing and treasury activities.

Account-to-account (A2A) payments offer merchants tangible benefits: real-time settlement, reduced transaction fees, and greater control over cash flow. Yet global adoption remains limited, even with very well-established infrastructures like SEPA Instant in Europe, the more recent FedNow or RTP from The Clearing House in the US, and regulatory initiatives such as PSD2 and Open Banking.

On the other hand, notable exceptions like iDEAL in the Netherlands, UPI in India, and Pix in Brazil demonstrate that success is possible, but not easily replicated. In Europe, Wero and EuroPA are emerging as potential challengers to card dominance, and in the US, Fiserv launched Pay by Bank.

So, why haven’t A2A payments really taken off globally yet?

The consumer perspective: why switch?

While A2A payments are a clear win for most merchants, the value proposition is far less convincing for consumers. Payment methods like cards and digital wallets have built loyalty through added value, including benefits like cashback, rewards, insurance, one-click ease, or buyer protection.

By contrast, most A2A options are perceived as clunky, opaque, and less secure. They lack strong consumer branding, offer little or no protection in dispute scenarios, and often require multiple steps at checkout. Unsurprisingly, without a meaningful incentive or at least equivalent user experience (UX), consumers stick with what they know and may not even recognise A2A as an option at all.

The regulatory gap: PSD2 and beyond

PSD2 laid the foundation for secure API-enabled A2A payments but failed to address critical factors like UX and consumer value. Banks, faced with limited commercial upside compared to the profitability of their established card businesses, have deprioritised investment in front-end payment innovation.

Additionally, the ban on surcharging – intended to protect consumers – removed a key lever for merchants to steer users toward cost-efficient payment methods like A2A. This regulatory misalignment has prevented merchants from actively promoting A2A payments, despite the considerable potential for reducing transaction fees. A powerful yet often overlooked solution still exists in Europe: incentivising A2A payments in a compliant manner, by offering discounts or rewards and delivering clear and meaningful value directly to consumers.

What merchants can do now – with or without regulation

Regulation can guide adoption, but merchants hold the real power to accelerate A2A usage, especially in high-ticket (luxury, electronics, travel) or low-margin (grocery, marketplace) sectors. Global merchants like Ryanair and Walmart show how proactive integration of A2A can yield both cost savings and customer engagement.

Practical strategies for merchants to promote consumer adoption include:

1. Clarifying the benefit: make the value of choosing A2A obvious, with promotions like ‘Save X% when you Pay by Bank’.
2. Building trust: reinforce security, emphasise refund and dispute policies, and use customer endorsements to normalise A2A usage.
3. Streamlining the experience: embed A2A directly into checkout, eliminating redirects and enabling biometric logins and instant confirmations.

Open Finance: closing the gap

PSD3 and the Financial Data Access Regulation (FIDA) promise to standardise and expand financial data access, however, their true transformative potential lies in proposing consumer-facing innovations built on top of payment rails, also known as Open Finance overlay services. Services like real-time balance visibility, account aggregation, dynamic incentives, and instant refunds can bring A2A payments in line with, or even surpass, the convenience of cards with value-added services like offering personalised cashback or enabling secure one-click repeat purchases using account-linked data. For banks and fintechs, Open Finance isn’t just about compliance, it’s a chance to shift from infrastructure providers to experience creators. And for third-party providers, it opens the door to tailored A2A solutions for verticals like subscription services, travel, or even luxury retail. In this context, A2A becomes more than a payment method. It becomes a platform for differentiation and competitive advantage.

Final thoughts

Consumers don’t adopt payment methods based on lower merchant fees or infrastructure efficiency. They switch when the experience is better, the value is clear, or the incentives are stronger.

To fully unlock A2A’s potential, the ecosystem must shift its focus:

• from rails to rewards,
• from APIs to experiences,
• from cost-cutting to consumer value.

This editorial piece was first published in The Paypers’ Account-to-Account Payments Report 2025, which features insights into global trends, key players, partnerships, and the next phase of the A2A evolution. Access the full report to understand where the A2A payments ecosystem stands today and what’s next.

Let’s talk about companies that, by nature, manage dozens or even hundreds of separate bank accounts—insurers, real estate groups, and construction players with multiple worksites. How should these segregated accounts be integrated into a fee-optimization strategy?

— These sectors do indeed face a particular issue: they accumulate bank accounts. In insurance, funds often must be separated by entity or by product to comply with regulatory ring-fencing obligations. In real estate or construction, each project may have its dedicated structure—sometimes a joint venture—with a specific bank account to isolate the project’s flows. The result is a multitude of local accounts, spread across different banks, which makes cash centralization very complicated. The outcome is not only heavy administration (constantly opening and closing accounts, managing signatory powers, etc.) but also a rising overall cost of cash management—since each account generates account maintenance fees, an account activity fee, and transaction-related charges. For the treasurer, fully inventorying and controlling these dispersed costs is a real challenge. The good news is that this is often an under-exploited source of savings. The first step—basic in appearance—is to inventory and consolidate all pricing terms for these segregated accounts: collect contracts for each legal entity, gather the fee schedules applied by each bank, and analyze transaction volumes on each account. It is meticulous work, but indispensable to see where the anomalies and levers are.

Do you have concrete examples?

— Yes. For NGE, a major construction group operating hundreds of worksites, we mapped cash-management costs across 23 banks and nearly 500 active accounts. By analyzing volumes and fees by bank, banking group, and service type, we established the client’s true cash-management cost. This snapshot became the foundation for a simultaneous consultation with all banks.

At the end of the process, NGE reduced its cash-management costs by 65%. A key change was replacing the legacy “commission de mouvement – CMC” – a French proportional fee applied to commercial transactions debited – with clearer, more controllable unit pricing. The group also signed three-year banking agreements to lock in the new terms and secure the gains over time.

We have seen similar results with other construction clients. At Demathieu Bard, for example, more than 400 bank accounts across 21 legal entities were burdened by an outsized CMC fee in the historical pricing. Here again, a well-run renegotiation delivered a 55% reduction in cash-management fees. Concretely, CMC fees were almost eliminated (–80%) and account-maintenance fees fell 20%, while the billing structure was simplified to make day-to-day control easier. Another key lever was reallocating flows across banks: we helped the client redistribute volumes among partners to capture the most favorable terms at each—without compromising security or service quality.

What is the key to success in these renegotiations within a decentralized Treasury environment?

In all these projects, we make sure to incorporate sector specifics from the scoping phase. For Spie Batignolles, for example, we had to take into account joint venture accounts and project accounts (SEP) specific to the construction sector. That means providing pricing terms adapted to these particular accounts, whose usage is often seasonal or one-off. The goal is for even these peripheral accounts—each individually small—to also benefit from optimized terms within the new negotiated schedule. The result is a downward harmonization of fees across the group’s entire banking perimeter. And in the end, results often exceed initial expectations, while strengthening Treasury’s day-to-day control. As one treasurer put it after our intervention, their cash management had become “more economical and more transparent” than before. This is a benefit not to be underestimated: optimizing fees goes hand in hand with better visibility for the Treasury function.

To conclude, can you summarize the approach developed by Redbridge for optimizing bank fees and services, and how it is tailored to the most complex environments?

At Redbridge, we study various solutions that allow our clients’ multi-account Treasury to be managed more effectively. The key is to have a holistic and dynamic view: combine the best of technology, market benchmarks, and human expertise to optimize continuously. This is how, even in complex environments—with multiple banks, accounts, and currencies—we manage to turn complexity into opportunity. Every account, every banking service, and every cent of fees can be discussed, while respecting existing partnerships. The payoff is threefold: substantial savings, increased operational efficiency, and better transparency for the Treasury function. The message to treasurers is an optimistic one: even if your organization is very decentralized or constrained by segregated accounts, there is room to maneuver. With a structured, global approach, you can regain control of your bank fees—and create value where, until yesterday, none seemed to exist.

Why are cash-management fees rarely examined closely by companies?

— Lucie Kunešová: Senior management often treats cash-management fees as a secondary matter within the wider bank–corporate relationship. For treasurers, monitoring and negotiating these fees is a demanding task. Billing is rarely transparent: fee statements are dense, full of opaque terminology, and difficult to interpret, which complicates accurate tracking and analysis. Many treasurers also admit they lack the benchmarks and tools needed to assess these costs in detail. Without reliable, comprehensive external price data, discussions around cash-management fees tend to remain vague. As a result, companies often accept fee levels that are significantly higher than necessary.

Another factor is the underlying fear of damaging banking relationships by pushing too hard on costs. Yet, with the right approach, it is entirely possible to achieve far more favorable terms while maintaining—or even enhancing—the balance of the relationship.

What are the key steps in a successful renegotiation of bank fees?

— The first step is to gather and centralize all bank fee statements so the data can be properly analyzed. At Redbridge, we begin with a detailed review to map services and volumes precisely. This diagnostic work uncovers inconsistencies, eliminates superfluous charges, and refocuses spending on services that the treasury genuinely needs. Painstaking, yes—but essential.

Once you have this clear view of the pricing applied by your cash-management banks, you can assess the competitiveness of each service. Redbridge has built a proprietary global database over more than 25 years of work with European and US corporates. Leveraging this database with our technology, we benchmark every service item to quantify potential savings.

Finally, equipped with these insights, we conduct a structured negotiation with banks—through an RFP process or bilateral discussions—while ensuring the dialogue remains balanced and constructive. This three-step approach—quantify, benchmark, negotiate—turns fees once thought immovable into an opportunity for lasting optimization.

Beyond cash management fees as such, what other options should treasurers explore to maximize gains?

— Do not limit your review to the cash-management fee schedule. Other savings pools are within reach—starting with foreign exchange (FX). In particular, the FX margins applied by banks constitute a material cost for companies with substantial international activity. We frequently observe wide margin differentials from one bank to another. By dissecting the components of these margins and benchmarking them against the market, a significant optimization potential often emerges. A structured renegotiation of FX terms can deliver far more competitive exchange rates—without changing platforms or disrupting day-to-day operations.

Another optimization lever: deposit yields. With interest rates back to normal levels, this topic has returned to center stage. During the years of negative rates, many treasury teams left liquidity idle in non-remunerated current accounts because the stakes seemed minor—some even paid to hold excess cash. Today, with positive rates, leaving surplus balances idle creates a real opportunity cost. There is clear value in enhancing these balances: negotiating deposit yields with your banks, or setting up short-term investments that respect security and liquidity constraints.

The winning approach is holistic. Instead of treating each topic in a silo—transaction fees here, FX there, and excess cash elsewhere—consider them together. These levers reinforce one another. In a recent engagement, renegotiating the cash-management fee schedule alone already delivered strong savings potential. Adding FX costs and deposit yields quintupled the overall upside. For an insurance client, we modeled three scenarios: (A) renegotiate cash-management fees only; (B) add FX cost optimization; and (C) also negotiate deposit yields. Each path produced meaningful gains, but the integrated approach maximized value. Ultimately, this large insurance group—paying EUR 1.07 million annually in cash-management fees across five countries—saw that cost line turn into a net income of EUR 0.56 million, all while respecting its banking-relationship strategy.

Figure — Example of a holistic renegotiation of cash management fees / Sector: Insurance

Scenario A: Cash Management Fees renegotiation

Scenario B: Integration of FX issues

Scenario C: Holistic approach including yields on deposits

Source: Redbridge – Cash Management Advisory, September 2025

Mastercard’s Innovations Are Accelerating Stablecoin Integration in Global Transactions

Stablecoins are digital currencies pegged directly to traditional fiat currencies, typically the US dollar. They have emerged as a viable option for financial institutions and businesses looking to simplify cross-border transactions.

Unlike traditional cryptocurrencies, stablecoins offer predictable value and reliability, crucial attributes for treasury teams managing global payments. Mastercard’s recent efforts highlight a shift toward mainstream stablecoin acceptance.

Here’s what corporate treasury professionals need to understand.

Key Terms to Know:

• Stablecoin: A type of cryptocurrency whose value is directly tied to a stable fiat currency, such as the US dollar, providing price stability compared to traditional cryptocurrencies.
• Blockchain: A secure, decentralized digital ledger technology that records transactions across multiple computers, ensuring transparency and security.
• Crypto Credential: Mastercard’s innovative system that replaces complicated blockchain wallet addresses with easy-to-use usernames, streamlining transactions and reducing errors.
• Merchant Settlement: The process by which funds from customer payments are transferred to the merchant’s account, often involving currency conversion in cross-border transactions.
• Fiat Currency: Traditional government-issued currency (like USD, EUR, or GBP), whose value is backed by the issuing government rather than physical commodities.

Why Stablecoins Are Relevant for Treasury and Payments

Legacy cross-border payments often involve slow processing, high transaction fees, and limited transparency. Stablecoins utilize blockchain technology to deliver significant advantages:

• Reduced volatility: Pegged to stable fiat currencies, stablecoins provide predictable value.
• Instant settlements: Payments clear immediately, improving liquidity management and operational efficiency.
• Cost savings: Lower fees compared to traditional payment methods such as wire transfers and correspondent banking.

It should be noted: stablecoins still face adoption challenges, including complex wallet systems, fragmented access points, and limited merchant acceptance. Mastercard aims to overcome these challenges with targeted solutions.

What’s Significant: Mastercard Takes a Strategic Approach to Stablecoin Integration

Mastercard is implementing several strategic initiatives designed to simplify stablecoin use and accelerate business adoption:

1. Simplified Crypto Credentials
   Mastercard introduced the Crypto Credential solution, replacing complex wallet addresses with user-friendly usernames. This simplifies transactions, minimizes errors, enhances compliance checks, and streamlines stablecoin usage for businesses.
2. Integration into Traditional Payment Networks
   Mastercard collaborates with crypto exchanges to enable stablecoins on traditional payment cards. This initiative lets cardholders spend stablecoins at over 150 million global merchant locations and convert stablecoins back to fiat currency seamlessly.
3. Direct Merchant Settlement
   Through partnerships with stablecoin issuers like Circle (USDC) and Paxos, Mastercard provides merchants with direct settlement options in stablecoins. This capability reduces settlement complexities, offers immediate liquidity, and shortens payment cycles for businesses.

Collectively, these Mastercard initiatives address key obstacles to stablecoin adoption, helping businesses streamline their cross-border payment processes.

Implications for Treasury Teams

Corporate treasury and finance teams should proactively monitor developments in stablecoin technology and consider potential operational benefits. While mass adoption is not yet widespread, awareness and preparation can position treasury teams advantageously as stablecoin usage grows.

Actionable steps treasury professionals can take now include:

• Assess Current Payment Processes: Identify inefficiencies in international payment workflows that stablecoins might resolve.
• Stay Informed on Regulatory Changes: Regularly track regulations affecting digital currencies to maintain compliance and readiness.
• Engage with Financial Providers: Communicate with banking partners and payment providers to remain updated on emerging stablecoin integrations.

Preparing for the Future

Mastercard’s investment in stablecoin solutions indicates a broader industry movement toward digital asset integration within established payment systems. While immediate adoption is limited, treasury teams should recognize the long-term potential of stablecoins. Remaining informed and prepared ensures companies are positioned strategically when stablecoins become a standard part of global payment infrastructure.

If your treasury or payments team has additional questions or would like to begin the process of analyzing, reviewing, and strategically adjusting your systems, please reach out to the Redbridge team.

The proposed legislative package, which forms part of the broader Savings and Investments Union (SIU) initiative, will now be submitted to the European Parliament and the Council for examination and adoption. In parallel, the Commission will launch a consultation on adjustments to the Solvency II framework aimed at fostering insurers’ appetite for Asset Backed Securities (ABS).

Targeted adjustments to the capital treatment of securitisation for financial institutions

The reform proposes a more risk sensitive treatment of securitisation under the banking prudential framework. Under the current rules, banks investing in senior tranches of securitisations are subject to a regulatory capital floor. This floor—currently set at 10% for Simple, Transparent and Standardised (STS) securitisations (a) —would under the new framework reflect the degree of risk inherent in the securitised portfolio. The Commission introduces a new category of transactions, dubbed “resilient”, for which the floor could go as low as 5%. These transactions would need to meet STS criteria and include an additional minimum credit enhancement.

In addition, one of the key parameters in the regulatory capital calculation—the “p-factor”—would be reduced for senior STS tranches. This would be especially relevant when banks apply the standardised approach (SEC-SA).

The proposal also seeks to improve the treatment of securitisations under the Liquidity Coverage Ratio (LCR). The LCR sets the amount of high-quality liquid assets a bank must hold to meet short-term liquidity needs. The Commission is proposing to expand both the range and volume of ABS that are eligible as liquid assets. This part of the reform is open for consultation until mid-July.

Finally, the reform includes simplified reporting obligations for private securitisations (b), along with a reduction in the due diligence requirements investors must fulfil for EU-based transactions.

A long-awaited revival following the 2017 framework

The current EU securitisation regime—established by Regulations (EU) 2017/2401 and 2017/2402—was introduced to restore investor confidence in the aftermath of the 2008 financial crisis. Key features included a 5% risk retention requirement for originators and stricter prudential treatment of ABS (c). The framework also defined eligible assets for securitisation and reinforced the rules governing asset selection by sellers. Investor disclosure requirements were strengthened, and the STS label was introduced to reward qualifying transactions with more favourable capital treatment.

Despite these improvements, the European securitisation market has seen only limited recovery since the framework came into force in 2019—especially when compared to developments in the US. This persistent weakness led Enrico Letta (d) and Mario Draghi (e) to call for a revitalisation of the securitisation market in their respective reports submitted in 2024. The European Council subsequently issued a formal request for the Commission to propose a reform. A public consultation was launched in autumn 2024, generating extensive feedback from industry stakeholders. Most comments called for a clearer definition of securitisation, simplified transparency and due diligence requirements, lower capital costs for financial institutions, and improved prudential treatment for insurers and pension funds.

A reform with primary impact on banks

The proposed reform should make it easier for banks to securitise their own assets. For non-bank originators, however, the expected impact remains limited for now, particularly in terms of cost. Nevertheless, the ongoing legislative process in the European Parliament may lead to broader changes in the regulatory framework, with potentially wider implications over the medium term.

Accola and Redbridge assist corporates on all financial aspects of their securitisation projects:  asset selection, structuring, volume optimisation, cost reduction, etc. In 2024, our teams closed transactions representing a total of €1.7 billion in committed funding. In 2025, we remain committed to help you reap the benefits of securitisation for your business.

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(a) STS is a label granted to securitisations that meet several criteria, including portfolio diversification, clear amortisation rules, location of originator/sponsor within the EU, and sufficient performance history of the underlying assets.

(b) A private securitisation refers to a transaction that does not involve a prospectus, is not listed or traded on a regulated market, and is negotiated bilaterally between the originator and a small group of investors.

(c) The 2008 crisis revealed that originating banks often failed to properly assess borrowers’ credit risk, since the risk was transferred to third-party investors, limiting the banks’ own exposure to potential losses.

(d) Letta Report – Much more than a market (2024) https://www.consilium.europa.eu/media/ny3j24sm/much-more-than-a-market-report-by-enrico-letta.pdf 

(e) Draghi Report – The future of European competitiveness (2024) https://commission.europa.eu/document/download/97e481fd-2dc3-412d-be4c-f152a8232961_en?filename=The%20future%20of%20European%20competitiveness%20_%20A%20competitiveness%20strategy%20for%20Europe.pdf 

It got me thinking:

• Will Agentic Commerce be a monumental paradigm shift in the human experience as many people are purporting it to be, or simply an iteration on what we are already doing?
• Will Agentic Commerce live up to the hype or be consigned to the dustbin of history like other buzz phrases such as Internet of Things, Metaverse and Blockchain?
• Or will it have staying power, driven by real-world application?

What is Agentic Commerce?

‘Agentic’ is an awkward-sounding term. We should get comfortable with it, as the hype engine around AC is just getting started.

AC involves AI programs that help a buyer to complete their purchase. Agentic = AI agents and bots. Commerce = buying and selling things.

In AC, the theory goes that the buyer – an individual or a business – completes a purchase using an AI program or another tool – such as a search engine – that supports such functionality.

In future, common AI platforms such as ChatGPT, Gemini et al may support AC purchase experiences when shopping online, via integrations with our browsers and apps, on computers and mobile devices.

This could include product search, product display, checkout, payment and order confirmation steps. The AI program will dispatch a bot to complete the purchase while the buyer is present in the moment, or while the buyer is absent from the moment after having set-up the process to automate it.

Why is Agentic Commerce getting such attention now?

Broadly, the huge uptick in discussion of this topic has been driven by AI products that have sprung up recently, such as OpenAI’s ChatGPT, Google’s Gemini, Microsoft’s Copilot and Anthropic’s Claude. To name but a few. The pace at which mass adoption of AI tools has occurred is dizzying.

AI is now in our homes, on our desks and on the agenda in boardrooms globally to an extent that was unimaginable just a few years ago.

Through the fog of marketing, gossip and hype, real-world practical applications of these technologies are beginning to crystallize.

Agentic Commerce is an example of a real-world use case with almost universal application: shopping.

What impact is Agentic Commerce having on payments and fintech companies?

Big players

We are already seeing the industry respond by announcing new AC products and adaptations to existing services.

Visa and Mastercard have recently announced their respective services which cater to the AC use case:

• Visa Intelligent Commerce: https://corporate.visa.com/en/products/intelligent-commerce.html
• Mastercard Agent Pay: https://www.mastercard.com/news/press/2025/april/mastercard-unveils-agent-pay-pioneering-agentic-payments-technology-to-power-commerce-in-the-age-of-ai/
• American Express has invested in agentic commerce start-ups, including Nekuda: https://www.businesswire.com/news/home/20250514808097/en/Nekuda-Raises-%245M-Led-by-Madrona-Together-with-Amex-Ventures-and-Visa-Ventures-to-Power-Agentic-Payments

Smaller players

Start-up companies are piling on to this trend. They are coming into the market with AI and AC products that purport to solve for relevant uses cases. This rise of new entrants will soon reach saturation point. Many will fail. Some will merge. Larger players will buy the best and most promising of the smaller players.

Billions of dollars in PE and VC investment will change hands, much of it to never be seen again.

A few names will achieve ‘escape velocity’ and survive long enough to enter the popular consciousness as sub-brands and tools of larger organisations.

What does Agentic Commerce mean for individuals and businesses?

Many businesses and individuals working in the industry will brand themselves as Agentic Commerce experts. However, we are all at the starting line of this technology and learning about it as we go. So, let’s act with proportionate caution and be kind to ourselves as our understanding evolves.

I could not claim to be an expert in Agentic Commerce or AI, but I’ve been in the world of payments and fintech long enough to be able to form instinctive reactions about such topics. Here are some of my hypotheses with regard to AC:

• Human behaviour around shopping is deeply entrenched. Many people enjoy shopping, and for some it is a big part of their lives. This is not going to change because of AI-powered shopping assistants.
• More likely is that we will continue to split our shopping and purchasing behaviour between a variety of channels and tools. Increasingly, AC will form a certain percentage of that activity. But not replace it wholly. The future of e-commerce is more options, fewer concentrations.
• We will continue to browse apps, websites and marketplaces and search for products in the same way we do today – because we want to make more careful decisions about what we buy or want to enjoy the experience of shopping. Sometimes we will choose to use an AC tool to make the process a bit quicker and more efficient. Perhaps we may care a bit less about the outcome and want to speed things-up a bit or wish to have a more curated set of options to review.
• Gradually, people will start to use AI programs and AC tools to help them make everyday purchases. Consumer goods and services such as groceries, electronics, fashion and bill payments are likely to be the first movers. Other sectors will follow.
• Businesses that sell D2C or B2B/2C will still operate as they do today but will need to adapt purchase channels and flows to AC behaviour, including bots. The starting point for a shopper will remain their laptop, computer or device, but AC software will necessitate businesses to iterate on their existing technical protocols, data flows, authentication, risk & security frameworks in order to be made sensitive to and compatible with AC tools.

Is Agentic Commerce a revolution or an iteration?

My theory is that AC is simply an iteration on existing processes and behaviours.

One challenge is bots. We’ve spent the past couple of decades in e-commerce attempting to fight bots, because most bot activity is malicious or fraudulent. The industry will need to adapt to new types of bots acting at the behest of AC programs.

Part of the solution to sorting the wheat from the chaff here already exists in the form of tokens. Credit and debit card tokenisation has been around for a while now and has gained – and continues to gain – widespread adoption by stakeholders across the value chain. A token can replace the full card number when the shopper enrols in a digital wallet or browser widget, and these tokens can act as a strong trust indicator, signalling that an AC bot is acting with the buyer’s authority. Authentication is completed at the ‘front end’ AC tool, embedded in the app/site/search tool – similar to (and likely using) digital wallets such as Apple Pay, Google Pay and PayPal.

Tokens, token meta data and authentication flags will help reduce friction and false declines due to fraud prevention and detection software used across the AC-originated payment lifecycle – in particular on the merchant side.

E-commerce websites and apps, payment gateways and acquirers, fraud detection software and tools, card schemes and card issuers can all utilise existing systems, processes and data flows to enable AC purchases with fairly minor adaptations and nuances.

So, is Agentic Commerce a revolution or an iteration? Right now, it looks like the latter — but history has shown us that small iterations can become major shifts. How will your business prepare?