Bank of America Merrill Lynch has announced the launch of Accelerated Payments to Asia, a solution that aims to improve the speed and efficiency with which banks and corporations make high value U.S. dollar payments to Asian markets.
The service is designed both for global institutions that send commercial payments to beneficiaries in Asia and for Asia-based institutions whose trade within the region is denominated in U.S. dollars.
“In today’s environment, companies making U.S. dollar payments to and within Asia can face hurdles that ultimately impinge on their working capital management,” says Greg Murray, head of U.S. Dollar Wire and Clearing Products, Global Transaction Services at Bank of America Merrill Lynch. “These hurdles center on the time zone differences between the Asian markets and the U.S. With Accelerated Payments to Asia, we have eliminated those issues, providing banks and their customers a much faster settlement process that also offers improved visibility and control over their cash.”
The current options for banks or corporations to circumvent the time zone delays when making U.S. payments to or within Asia come with complications. For instance, local offshore mechanisms in different countries require companies to hold accounts, thereby fragmenting their liquidity and creating operational complexity.
Another alternative, leveraging branch networks, can add delays since a payment made to a bank’s head office can take several days to reach the end recipient.
Accelerated Payments to Asia uses smart routing technology to recognise payments and pass them through in-country U.S. dollar clearing systems via a single bank account. The service leverages Bank of America Merrill Lynch’s global branch network and technology to process the high value payments in the most intelligent and straight-through manner possible.
“With the proliferation of inter-Asia and intra-Asia flows and the evolving economic demographics of this region, clients increasingly demand solutions that enhance operational efficiencies and facilitate faster payments,” said Faisal Ameen, head of Treasury Products, Asia Pacific.
Ameen added that the service can additionally help financial institutions differentiate themselves since their corporate clients can negotiate better terms on future trading business as a result of faster settlement of funds.
Bank of America Merrill Lynch’s Accelerated Payments to Asia currently captures more than 1,000 different Hong Kong and Greater China-based beneficiary banks and branches, and will be expanded over time to incorporate U.S. dollar clearing systems in other Asian markets.