We are very proud to share with you the news that recently, Visa’s treasury team was named the 2011 Gold Alexander Hamilton Award (AHA) Winner in Working Capital Management, presented by Treasury & Risk magazine. Now in its 16th year, the awards program recognizes excellence in finance and treasury management and honors treasury units in top companies around the world. While we always like to brag about our innovative teams here at Visa, we are always pleased when they are recognized by industry experts.
This year, our team earned the top place in this category for reducing Visa’s settlement liquidity expose through implementation of a new netting application which they submitted to the AHAs for consideration. The application they developed which led to the win is one that allows Visa to consolidate payments to and from some of its largest financial institution customers without impacting their operations.
To put that in perspective, Visa operates a massive wholesale funds transfer settlement network – making and receiving over 2,000 payments daily from the financial institutions that issue our cards and pay merchants. Given that total settlements top $3 trillion annually, the benefits from netting the payments of its largest clients and making or collecting just one payment daily for each financial institution would be huge.
The challenge for Visa treasury and IT was to enable a single net settlement transaction daily but keep the components of the settlement transparent to the FIs so that their legacy systems could continue to post them all as usual. This meant reinventing the entire settlement process. Visa treasury met its exposure reduction goal, and as a result, was also able to improve the company’s liquidity and working capital management. This approach can also be used by others in order to net payments with counterparties even though the existing individual payments are with decentralized or unrelated business units within the counterparty.
Congratulations to our treasury group for their notable accomplishment.
Posted by: Erica Harvill, Visa Corporate Relations on November 15, 2011 at 3:28 pm