What is treasury management?

Treasury management is the strategic oversight of an organization's financial resources, focusing on optimizing liquidity, managing financial risk, and ensuring the company can meet its financial obligations.

For fintech companies and payment service providers, treasury management encompasses cash flow monitoring, working capital allocation, foreign exchange risk mitigation, and payment infrastructure optimization.

How treasury management works

Treasury management operates through systematic monitoring and control of cash inflows, outflows, and financial positions. Treasury teams forecast liquidity needs, manage bank relationships, optimize fund allocation, and implement controls to protect against financial and operational risks.

Core functions include:

• Cash management: Maintaining sufficient liquidity for daily operations
• Risk management: Protecting against currency, interest rate, and credit risks
• Investment management: Deploying excess cash to generate returns
• Funding operations: Securing capital for business needs

For global companies, treasury management also includes managing multiple currencies, coordinating payments across jurisdictions, and navigating different banking systems.

According to the Association for Financial Professionals, treasury management ensures organizations have necessary funds to meet operational needs, invest in growth opportunities, and mitigate financial risks.

This differs from broader financial planning by focusing specifically on liquidity, payment operations, and immediate financial stability rather than long-term strategic finance.

Treasury management in cross-border payments

Cross-border payment operations create specific treasury management challenges.

Traditional international transfers involve:

• Multiple intermediaries
• Settlement delays of 2-5 business days
• Foreign exchange spreads of 2-5%
• Limited visibility into fund status during transit

According to the Bank for International Settlements, these constraints force companies operating payment infrastructure to maintain liquidity across multiple markets.

This requires:

• Prefunding accounts in different currencies
• Managing correspondent banking relationships
• Forecasting foreign exchange exposure
• Coordinating payments across time zones and banking hours

Industry estimates from the International Monetary Fund suggest approximately $4 trillion globally is locked in prefunded foreign currency balances, representing significant opportunity cost.

Treasury teams address these challenges through strategies like cash pooling (concentrating funds from multiple accounts), netting (offsetting payables and receivables to reduce transfer volume), and hedging (using financial instruments to protect against currency fluctuations).

Payment companies also implement real-time reporting systems, automated payment reconciliation, and predictive cash flow models to improve visibility and control.

Stablecoins in treasury management

Stablecoins are emerging as treasury management tools for companies handling cross-border payments.

Digital currencies pegged to traditional assets like the US dollar offer:

• 24/7 settlement
• Transaction costs measured in cents regardless of transfer size
• Programmable payment capabilities

According to PwC, stablecoins address operational pain points in cross-border payments, contractor disbursements, and liquidity management. Research from EY-Parthenon in June 2025 found 13% of financial institutions and corporates globally already use stablecoins, with 54% of non-users expecting adoption within 6-12 months.

Regulatory framework

The regulatory environment has evolved to support institutional adoption.

The GENIUS Act in the United States established comprehensive federal oversight, 100% reserve requirements, and confirmed that payment stablecoins are neither securities nor commodities. The European Union's MiCA regulation provides similar clarity for European markets.

According to the Association for Financial Professionals, organizations using stablecoins for treasury operations rather than issuing their own do not require specific licenses, simplifying compliance.

Implementation requirements

Implementation requires:

• Integration with existing treasury management systems
• Establishment of wallet custody protocols
• Coordination with accounting teams on treatment of digital assets
• Selection of compliant stablecoin issuers and blockchain networks
• KYC/AML procedures for digital asset transactions

Treasury management systems and technology

Modern treasury management relies on specialized software that:

• Integrates bank accounts
• Automates payment workflows
• Provides real-time visibility into cash positions
• Enables forecasting

Treasury management systems connect to enterprise resource planning platforms, accounting software, and banking APIs to centralize financial data and automate routine processes.

Real-time visibility enables treasurers to oversee when and how cash moves through various accounts, allowing accurate forecasting of future shortages or risks. Without immediate visibility into cash flow, teams cannot anticipate future cash needs or optimize working capital allocation.

Technology improvements

Technology improvements include:

• Automation of reconciliation
• Machine learning for cash flow forecasting
• API-based bank connectivity
• Integration with blockchain infrastructure for digital asset management

These systems reduce manual errors, free treasury staff to focus on strategic analysis rather than data entry, and provide leadership with analytical tools for financial decision-making.

Requirements for payment infrastructure providers

For payment infrastructure providers specifically, treasury technology must:

• Handle high transaction volumes
• Support multiple currencies and payment methods
• Provide granular reporting for reconciliation
• Maintain audit trails for compliance

The system architecture often includes real-time balance monitoring, automated alerts for threshold breaches, and integration with fraud detection systems.

Treasury management statistics for 2026

The treasury management landscape is evolving rapidly as companies adopt new technologies and strategies:

• $4 trillion locked in prefunded foreign currency balances globally, representing significant opportunity cost according to the International Monetary Fund
• 13% of financial institutions and corporates globally already use stablecoins for treasury operations per EY-Parthenon research
• 54% of non-users expect to adopt stablecoins within 6-12 months according to the same EY-Parthenon survey
• 2-5 business days standard settlement time for traditional cross-border transfers per the Bank for International Settlements
• 2-5% typical foreign exchange spreads on international transfers according to PwC
• Seconds settlement time for stablecoin-based treasury transfers operating 24/7/365

These statistics highlight the inefficiencies in traditional treasury management and the growing adoption of digital alternatives that reduce costs and improve capital efficiency.

Treasury management in payment infrastructure companies

Companies providing payment infrastructure face distinct treasury management requirements. Beyond managing their own cash flow, they facilitate fund movement for customers, which creates additional considerations around settlement risk, regulatory capital requirements, and liquidity provisioning.

Payment service providers must:

• Maintain adequate reserves to cover settlement obligations
• Manage timing differences between receiving funds from payers and disbursing to payees
• Comply with money transmitter regulations requiring minimum capital
• Optimize the cost of holding liquidity across multiple markets

They also coordinate relationships with banking partners, manage exposure to partner financial institutions, and implement controls to prevent fraud and operational errors.

Hybrid payment infrastructure

The hybrid approach of combining traditional banking rails with stablecoin networks creates new treasury management capabilities.

Treasury teams can:

• Route payments based on cost and speed optimization
• Reduce trapped liquidity in prefunded accounts
• Improve settlement predictability through blockchain transparency
• Access markets where traditional banking infrastructure is limited

This requires treasury operations that can:

• Manage both fiat and digital asset positions
• Implement controls appropriate for irreversible blockchain transactions
• Coordinate between traditional banks and cryptocurrency infrastructure
• Maintain compliance across multiple regulatory frameworks

The Association for Financial Professionals notes that treasurers must evaluate trustworthiness of issuers and custodians, assess counterparty risk, and ensure treasury systems can connect to wallet providers and exchanges.