FOCUS - NOV / DEC / JAN 2018 TREASURY ON THE DIGITAL FRONT LINE As a larger number of corporates across sectors respond to increased payment digitization by moving towards a direct-to consumer business model, the treasury function plays a critical role in managing the impact on cash flows and working capital The growth in digital payment methods has transformed the relationship between businesses and consumers, enabling companies to reach their customers directly. This shift away from the traditional wholesale model has clear ramifications for customer acquisition, supply chain logistics and distribution of goods. For instance, companies must rethink how they reach and retain customers and tactically move beyond regularly scheduled product shipments between factories and warehouses to near real-time routes with multiple direct distribution points. The treasury function is in the unique position to understand the cost of acquiring consumers and handle the challenges of uneven payment flows from multiple sources - making early engagement critical to shaping processes. Many opportunities exist for treasury to adapt working capital ratios and capital mix if the business model goes direct to consumer. For example, the treasurer can analyze the possibilities of leveraging subscription services or digital wallets to enable pre-payments. Any implementation would significantly change the structure of working capital internally and even potentially influence industry-wide practices. LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°99 Preparing for the Direct-to-Consumer Payment Model 19