This case study shows the situation at a European retail organization. It demonstrates how bank account rationalization combined with a brand new view on card acquiring has reduced costs dramatically and substantially improved control over the cash flows from the shops.

Countries: 10+
Currencies: CHF, CZK, EUR, GBP, PLN
Banks: 15+
Bank accounts: 500+

Shop outlets: 500+
Payment terminals: 800+
Payment terminal brands: 10+
Debit/Credit card acquirers: 15+

The retailer had created a large bank account setup during its expansion phase over Europe. Each time a new shop outlet opened a new bank account was opened for this shop. This was to facilitate the easy reconciliation of cash inflows with retail sales in the retail accounting system. A payment terminal setup for accepting debit- and credit cards was setup on a country by country basis due to legacy reasons - back in the time it was simply not possible to do acquiring on a European scale because SEPA was not there. As in many cases technology has been the enabler in this case. SEPA has been a tremendous cost saver for this retailer.

The challenge in this case clearly lies in reducing the number of bank accounts and gain control on a European scale over debit- and credit card acquiring at the same time. The proposed solution is to setup the card acquiring on a European scale. For example all Euro payment terminals all over Europe will transfer into the same single EUR account at the central retailers Treasury. This required finding an acquirer that could do pan-European acquiring. We found them.

And as a consequence of consolidating acquiring volume we were able to reduce the fees with the credit card companies in a single contract. All the payment terminals in Europe had to be replaced with a single unified device, which incurred an investment for the retailer. But from that day onward there was no longer a need to keep up an inventory of payment terminals per country which immediately reduced maintenance cost.

Because of the pan-European acquirere all cash flows from the terminals could now be directed into 1 single account per currency. There was no longer a need for 1 account per shop outlet. This dramatically reduced direct bank cost and has immediately increased liquidity for the retailer. All Treasury needs to do is to monitor the top currency retail accounts from this day onwards.

And the retail accounting? We were able to assign unique identifiers per payment terminal and get that on the bank statements for just as easy a reconciliation as has always been the case before.

Countries: 10+
Currencies: CHF, CZK, EUR, GBP, PLN
Banks: 5
Bank accounts: <50

Shop outlets: 500+
Payment terminals: 800+
Payment terminal brands: 1
Debit/Credit card acquirers: 1

Due to no longer having a need for a EUR bank account in each country per individual shop the number of bank relationships could be reduced to the minimum. This has resulted in a better relationship with the remaining banks. The cost savings from the bank account reduction are structural. More than 450 bank accounts were closed. Not all the accounts could be closed however as a number of bank accounts remained open for physical cash collections and cheque handling.

The consolidation of volume from card acquiring has reduced the fees from the credit card companies leading to structural cost reductions.

Indirect cost savings have been realized on payment terminal management. One single technical device makes it possible to maintain the devices in house and to keep an overal lower stock level of spare devices. The overhead cost has reduced as a consequence. The quality of service and response times to the shop outlets has increased. Fewer payment disruptions increased customer satisfaction.