Introduction: How to document a customer’s payment transaction journey.
The essence of a successful transaction in the payments world is the comprehension of the customer’s journey. To ensure efficient dealings with various solution providers, it’s essential to present your understanding of transactions, flows of funds, and customer profiles in a standardized format. By doing so, solution providers can understand and address your requirements uniformly.
The Transactional Journey
Think of a transaction as a traveler embarking on a trip. To successfully document this journey, several key elements must be identified:
- Origin: Where is the transaction starting from?
- Destination: Where is it ultimately going to end?
- Transit Points: Are there any stops or changes in the route?
- Participants: Who is involved in the journey, and what are their roles?
- Purpose: What is the goal of the transaction?
- Cargo: What additional elements accompany the transaction?
Examples of Transactional Journeys
Here are a couple of scenarios to help simplify the concept:
A company in Chicago wants to make a payment to a supplier in China using your platform.
- Origin: The journey begins in Chicago with a US-based business.
- Destination: It ends in China with another business.
- Cargo: The transaction involves an overseas B2B payment from the US to China.
- Participants and Transit Points: Funds are collected from the US, passed through an FX broker or bank, and finally transferred to China. The funds can be received in Yuan, US dollars, or any chosen currency.
A transaction originating from London needs to be split and sent to multiple parties.
- Origin: The journey starts with a UK-based business.
- Destination: The funds are headed to Brazil, the Philippines, and Hong Kong.
- Cargo: The payment is initiated in British pounds.
- Participants and Transit Points: The payment is split three ways. One part is converted into Euros for a Brazilian company, another into US dollars for a Filipino company, and the last part also into US dollars for an individual in Hong Kong.
Understanding and Identifying the Participants
One of the crucial steps in documenting a customer’s payment journey is identifying and defining the participants involved in the transaction.
The Role of Your Company
Ask yourself, what role does your company play in this transaction? Some possible roles could include:
It’s also essential to clarify whether your company will be handling the funds directly or indirectly.
The Nature of the Businesses
Understanding the nature of the businesses involved in the transactions is equally important. Are they:
- Regular businesses?
- Non-profit organizations?
- Financial institutions?
- Licensed money transfer operators?
- Non-banking financial institutions?
Compliance and Documentation
Being aware of the necessary compliance procedures and the documentation you would receive is also important. This includes:
- Conducting Know Your Business (KYB) checks.
- Conducting Know Your Customer (KYC) checks.
- Confirming if the recipient of the funds is also your customer and if you have their KYB/KYC data.
- Understanding the purpose of the transaction.
- Maintaining a list of allowed and disallowed transactions.
Clarifying transactional details is crucial in understanding the customer journey:
- What is the transaction flow? For instance, is it from the USA to China, or vice versa?
- What is the anticipated transaction volume?
- What is the average transaction value?
- How many transactions per month are expected?
- How do you verify the details mentioned in the invoice?
Each of these questions needs to be answered to thoroughly understand the customer journey. The more information we have about the client, the better we can structure a blueprint that addresses their needs effectively.
How to Document Your Journey
You can document your transactional journey in multiple ways. It could be as simple as writing it down on a piece of paper, drawing a diagram, or even recording a video explaining it. What’s crucial is that you capture the essential components of your journey, which will allow us to extract key insights such as the transaction set, flow of funds, types of transactions, involved parties, and regulatory requirements.
To conclude, documenting your customer’s transactional journey is a critical aspect of our requirements. The goal is not just to narrate your transaction, but to tell a story. This storytelling will help us to understand your needs better and thus, serve you more efficiently.
This page was last updated on June 27, 2023.