UPS started the project in April 2016, with an aggressive timeline of moving 80 percent of global cash balances by October of that year. That meant only a six month implementation timeframe to stand up the system and get bank connectivity to the first 200 accounts within banks located across 10 countries. That’s when they seriously engaged with Reval and Fides to plan this global roll-out.
UPS uses the SWIFT Network for all payment processing, leveraging the Fides BIC and their own corporate BIC. The option to use Fides’ BIC to make connections with the first wave of banks made it possible for UPS to meet its aggressive regulatory compliance-driven project implementation timeline. Fides was also able to assist UPS with getting its own BIC established, lightening the work for the treasury team.
There was no mechanism in place whereby UPS could pool their cash in one location and invest it from that location. Through Fides, they were able to set up payment connectivity to all of the various accounts that could concentrate cash plus many other accounts that weren’t part of their polling structure – and have it all connect back into their Reval TMS. In Reval, they can set target balances and triggers such as when a specific account has more than $10,000 in it, the excess will automatically be transferred, via a payment message through Fides to the SWIFT network, to their concentration accounts.
Now, instead of having someone in Vietnam have to log onto a website and tell region treasury how much cash they have in their bank and how much money they need, the system automatically calculates that information. Standard Chartered in Vietnam sends an MT942 message through the SWIFT network to Fides to Reval, Reval sees that they have $2M in that account. It also sees that the target balance is $100,000 so it initiates a wire to move that money again through the SWIFT network and through Fides up to UPS’ in-house bank. The process is completely automated compared to somebody putting in a request and region treasury having to physically wire the money.
Fides also provides converters to UPS for MT101 payments and ISO messages. These converters are an added benefit of the Reval-Fides partnership for UPS: Reval can support a large number of native MT101 tags, but each bank is different. Fides can automatically convert the messages and send them on their way, allowing UPS to make payments with banks that would otherwise be impossible.