– How would you describe the organization of payments at Criteo?
– Criteo is a French technology company offering online marketing and advertising solutions. Founded in 2005 in Paris, it has experienced very rapid international deployment over the past ten years. We have operations in more than 100 countries through our 25 subsidiaries. Our treasury organization is highly centralized, and the team, based entirely in Paris, is responsible for providing our customers with payment facilities around the world. Our historical large account customers pay for our services through domestic or international transfers (SCT, Fedwire, ACH and local transfers in Asia). The expansion of the group’s customer base to smaller companies, with an average monthly expenditure close to $10,000, changes the matrix of how we think about payment methods. Our collections grow, and the new bills tend to be smaller, while we need to meet the same requirements of a B2B payment environment: namely the security and traceability required for accounting reconciliation.

– As a B2B company, which payment innovations are of interest to you?

Up to now, many payment innovations have focused on the user experience, which is hardly focused on the B2B environment. The increasingly international deployment of payment service providers, enabling the implementation of homogeneous global payment solutions through various means, is a trend of great interest. However, large card networks remain essential elements of the pipeline, and they have not led much innovation as yet.

– Do you follow a specific strategy or blueprint for integrating new means of payment in different geographical areas?

– We analyze payment innovations according to three criteria. The first is the acceptability and capacity of the solution to be rapidly deployed in the various geographical areas in which we are present. The second criterion is reliability, as our payment receipts involve significantly higher amounts than card payments by private individuals and are, therefore, exposed to a higher risk of rejection (lack of funds, ceilings reached, etc.). The last criterion is the ability of the solution to easily identify each payment stream for end-to-end processing.

The ideal means of payment is, from our point of view, the equivalent of SEPA direct debit, which enables us to control the timing (days sales outstanding – DSO) in order to know which bill we are going to collect. Direct debit is not only reliable. It is also efficient in terms of cost and execution time. Our opinion is that card payments are expensive, and are often associated with significant delays in receiving funds (four to five days on some payments in the United States) and have lower success rates.

But culturally, direct debit is not always as well accepted in some countries as it is in Europe. For example, it is not always well accepted in B2B relationships in the US. This is why we rely on an e-banking blueprint with payment initiation (merchant-initiated transaction) on the due date of the invoice, based on the bank card number recorded by our customer on their profile. We send mass electronic files to our payment service provider, which is responsible for charging the cards for the amount of the invoices due for each geographic area.

In order to process rejections due to technical reasons (management of the due date and the card ceiling), we have implemented a process that facilitates immediate contact with the customer so that they can connect to a Criteo platform and issue their payment themselves. The goal is to quickly resolve any problems so that we avoid any suspension of our service.

Unfortunately, however, there can be difficulties in analyzing the rejection codes. There are around 20 such codes in use around the world, but not all banks apply them in the same way, and we have not yet found a payment service provider capable of supporting us on this issue.

– What are the alternatives?

– Request-to-pay is part of our current thinking, but it will only make a real contribution if it enables payments and bills to be linked. A simple request-to-pay platform does not currently enable us to reconcile invoices or allow two separate customer stakeholders to release the payment. A QR code may be of interest because it enables direct identification of the customer and the invoice, but the disadvantage of this solution results in multiple payments.

– How interested are you in instant payment?

– Instantaneousness is of interest within the context of a specific collections process. We can immediately reactivate customer programs that have been suspended due to non-payment. As soon as a rejection is identified, we can contact the customer and direct them to a request-to-pay payment platform to resolve the problem. Once the transaction has been completed, the account is immediately unblocked.

SCT Inst is also of interest for our supplier payment campaigns, but its current ceiling of €100,000 is too low. In the long term, if the ceilings are raised, we will pay right before the deadline, instead of mobilizing cash over 24 to 72 hours in payment systems.

Read our new Payments Report – Shifting to faster payments

Redbridge’s 2020 Payment Report is a source for trends and insights into today’s dynamic payments environment. This second edition presents how various stakeholders position themselves in the payments industry and explores topics related to innovative payments, instant payments, e-commerce and fraud mitigation.

Contributions from treasury practitioners, bankers, payment service providers and vendors are coupled  with in-depth analysis from our treasury consultants.