The Soltesz
Payment Framework

The 8 Steps of the Soltesz Payment Framework

1. Collect Information

The first step is to gather all information about the group structure and its companies, including jurisdiction, activity, prices, details about shareholders, directors, contracts, providers, and more. The importance of this step is to create a complete picture of the group in question. By thoroughly understanding all aspects of the group and its companies, we can better assess risks, ensure compliance, and make more informed decisions. 

 

2. Create a Visual Group Chart

In this step, we draw a visual map of the group structure, showing how different companies and their key personnel are connected. This visual representation helps clarify the relationships between entities and how funds flow through the organization. It allows businesses to identify potential risks, bottlenecks or inefficiencies within their structure and understand interdependencies that might affect overall payment and banking flows and pose risks. 

 

3. Relationships and Key Personnel

Businesses are driven by people, and understanding the roles of key personnel (directors, shareholders) is critical. The actions and risk profiles of individuals behind the business can impact the company’s overall risk assessment from a payment and banking perspective. For instance, if a director is associated with high-risk activities in other companies, it could raise concerns for banks and other financial institutions who might provide services on higher fees even to the low-risk activity company in question. This step is crucial because it highlights how individual behaviors can influence the company’s and, therefore, the whole group's risk profile. 

 

4. Fees and Taxes

Understanding the fees charged by banks and payment providers, as well as tax implications, is fundamental to managing costs. Many businesses focus solely on taxes without considering the overall payment and banking strategy, which can lead to higher expenses in the long run. For example, a company might incorporate offshore to reduce taxes, but this could lead to higher banking fees due to the high-risk nature of offshore entities. Groups have to plan their taxes in accordance with their payment and banking costs, which helps them avoid unexpected expenses and optimize payment and banking risks and flows. 

 

5. Terms and Timelines

Different payment providers and banks offer various settlement terms and timelines. Assessing how these terms and delays can impact a group’s overall liquidity and cash flow highlights operational bottlenecks and potential risk areas. For example, a payment provider may offer attractive fees, but if they take longer to settle transactions, it can seriously affect the company’s ability to pay suppliers, leading to lost opportunities or increased costs. Understanding these timelines helps businesses maintain healthy cash flow and avoid disruptions, making this step critical for operational efficiency. 

 

6. Hedging and Foreign Exchange (FX)

International operations use multiple currencies, and fluctuations in exchange rates can significantly impact profits. Implementing hedging strategies are vital and known but when a business maintains funds in foreign currency accounts, it also needs to consider other risks, such as the safety and stability of the bank where the funds are held or the tied up liquidity in multiple currencies, which can lead to cash flow challenges. Carefully planning for currency flows is a balancing act. 

 

7. Comprehensive Risk Assessment

An operation-wide risk assessment is vital for addressing all possible risks, such as technological, compliance, and security risks, helping to create backup and contingency plans for all possibilities. Businesses also need to implement strict due diligence checks on all their banks and financial providers, balancing cost savings with risk exposure. For example, regulatory differences based on jurisdiction could mean that using an offshore bank might be cheaper but might pose significant risks in terms of regulation, safety or even settlement timelines. 

 

8. Ongoing Monitoring and Evaluation

"One thing is constant - the change" - continuous monitoring and reevaluation is essential in an ever-changing environment. As the group or company expands in volume, activity, and jurisdictions, its payment and banking needs will also evolve. The payment and banking landscape is also dynamic, offering new innovations, fees and terms, adhering to changing regulations. Businesses must regularly assess their payment and banking strategy to ensure it remains optimal and aligned with their current operations. Regular assessments of payment flows, provider relationships, and risk exposures help to make sure that the payment and banking strategy continue to support sustainable growth. 

 

Each step in the Soltesz Payment Framework is interlinked and essential for maintaining a strong, efficient, and risk-optimized payment and banking strategy.By following this structured approach, businesses can reduce costs, improve user experience and security, optimise developments, and manage risks more effectively, improving overall operational efficiency.