Payment processing milestone: Automated reporting for IKEA’s largest franchisee

In the swiftly changing world of international commerce, the importance of forming strategic partnerships to ensure easy, secure, and inclusive payments for all consumers has never been more crucial. Aiming to jointly revolutionize payment processing across Central and Eastern Europe, INGKA group (the largest franchisee of the IKEA with more than 300 stores globally) and Raiffeisen Bank International AG (RBI) have forged a strategic cooperation. This partnership enables INGKA to leverage RBI’s cutting-edge centralized card acceptance solution, tailored specifically to the needs of the INGKA Group, and spanning over eight IKEA markets in the CEE region.

Recognizing the critical role of efficient financial reporting and reconciliation in card acceptance solutions, INGKA and RBI have embarked on a journey to design and implement a bespoke ERP/reporting and reconciliation system with an aim to build a robust data foundation across the markets where INGKA and RBI collaborate.

This innovative collaboration offers mutual benefits. The INGKA Group stands to enhance operational efficiencies, improve accuracy, and gain deeper insights into financial transactions. Meanwhile, RBI has the opportunity to integrate into INGKA's core infrastructure, supporting IKEA in creating additional value within this partnership.

Today, we have the privilege of speaking with Samuel Langsford, Inbound payments specialist, at INGKA Group treasury. Sam supports global treasury compliance and integration towards the transformation of ERP system for INGKA globally. Join us as we delve into the journey behind this project, the challenges overcome, and the transformative impact it is having on INGKA's global business operations.

INGKA Group has embarked on an operational transformation in order to benefit from simplicity, standardization, and digitalization of its financial flows and reporting. In doing so, additional requirements have been placed on our financial payment suppliers to support us with daily, automated, line level transaction reporting, so that we can automate our reconciliations. For INGKA this means saving manual effort, identifying leakage in financial flows, and improving data quality available to our wider organization. Ultimately, we bring our payments reconciliation up to a best-in-class level. To support us, RBI has enabled a robust, secure and reliable data reporting channel which we can leverage, plugging into our standardized payment data lakes. With this data we deliver on our transformation and improve our understanding of payments in CEE countries, as it is happening. Already we identified improvements to the operation of settlement that RBI has diligently affected at speed.

We move from a legacy position of batch level reconciliation, leveraging PSP data only. Now we reconcile multipoint, automatically, all the way from sale to receipt in bank. Having the new reporting available automated from RBI is a crucial keystone in the reconciliation flow that we did not have or utilize before.

RBI is INGKA's preferred payments partner for card payments in a number of CEE markets, and to earn this position, a number of pre-requisites already existed, including a strong and secure operating platform, unwavering commitment to sustainable business practices. But now INGKA moves forward with operational transformation, new advanced reporting data pipelines are a must in order to become or indeed remain part of the preferred suite of INGKA payment suppliers. We are happy to maintain the strong relationship we already had that moves forward with us in step.

INGKA set out on transformation in order to simplify, standardize and digitize our financial flows and reporting. We have been able to meet these needs, and also identify business operational improvements that were not visible to us before. Every effort towards a goal has byproducts we can take advantage of if we look well enough.  

There is a great richness of detail coming from RBI as standard, which not all acquiring banks are able to provide. Despite a notoriously complex industry to report under, RBI manages to detail specific interchange ++ breakdown on a per transaction basis. We also see a high degree of categorization of card types, allowing us to perform intricate analysis and eliminate overcharged fees by the various parties.

As a base, the implementation of this system has allowed INGKA in the relevant markets to save manual effort, identify leakage in financial flows, and improve data quality available to our wider organization. We have also been able to highlight efficiency improvements in operating set up and standardize our configurations across market geographies. Our local and global stakeholders alike have been able to enjoy the benefits of these changes.

At INGKA we strive for simplicity as one of our key values. Implementing and maintaining direct data pipelines from payment partners is not a simple task. So we make an extensive effort to keep our stakeholders shielded from this complexity, by consuming the RBI data flows into a universal data lake that is serving as a single source of truth for payment data not just for all cards and all countries, but for any payment product across the INGKA world. That means not only do our stakeholders have access to a wealth of new information, faster that ever before, but they need only visit one place to go to get it. For us to achieve this, the systems available from RBI are crucial to be able to map into this web and to stay resilient, to appear to INGKA users as only the information they want, in a simple way.

The complexity involved in implementing such a system cannot be underestimated. We learned quite quickly that there is no such thing as off the shelf in payments world because every need is different, and every, merchant, and acquiring bank has its own platforms to work with. So our timelines were ambitious, but nonetheless met with the committed effort we received from our RBI counterparts. We also learned by the end of the process, what a great benchmark for data can look like. We are applying this as the bar to reach as we continue to roll out the transformation.

Now we have met the prescribed needs of INGKA's transformation project, we can begin to really explore the full analytical capacity of the data we are receiving. INGKA treasury is now beginning to build out a payment data information foundation, in order to support our internal organization as a "Payment data as a service" solution. We hope that can realize more value that we couldn’t anticipate until we experiment, ask questions, and engage our organization to the exciting new tools and data available.

Our transformation is a necessary step in order to maintain competitiveness while margins are being squeezed from every direction, and opportunities like AI will fail to be achieved without quality and timely data to leverage. Manual reporting and financial leakage will be themes of the past, as businesses make a relentless move into simplification, standardization and digitization of back-end operations, or the ones that don’t will find themselves too inefficient to carry on profitably. With this in mind, suppliers must already think of automated data reporting as a hygiene factor that will not necessarily win business but prevent losing it. To merchants not yet on the journey. Now is the time to reach out to your payment partners and roadmap this future world together. Transformation is a constant, whether you are driving it or watching it leave you behind.