Visa is pushing further into the B2B payments industry (V)

Visa is promoting virtual commercial cards in Singapore. The card network has teamed up with alternative lender Validus to help small businesses in Singapore use virtual cards to receive working capital and pay off invoices, according to Enterprise Innovation. For small businesses in particular, digital invoicing capabilities are often unaffordable, or too difficult to implement, which means these players are frequently stuck using costly, time-consuming paper invoices. Virtual credit cards allow merchants to pay their invoices online, rather than via check, ultimately saving them time and money that they can then invest back into business development and performance, according to EI.

For Visa, pushing into the digital B2B space could be a lucrative alley for the firm to pursue. B2B payments are still in the early days of disruption — over half of business payments were made by check in 2016, according to AFP. But it’s a massive opportunity, with the industry being worth roughly $18.5 trillion in the US alone last year. For Visa, being at the forefront of B2B could be a massive volume opportunity, which in turn could help Visa grow its business and revenue. And getting into the space now could help Visa gain an early-mover advantage, and put it on track to capture substantial volume moving forward.

As the world around us digitizes, payments are no exception. The way we manage money and make payments has moved from physical channels, like cash and checks, to digital methods, like cards and online platforms. And though that’s been a long-term shift, it’s one that’s occurred rather seamlessly.

This isn’t the case for businesses, where the business-to-business (B2B) payments process is considerably more complex, and as a result, almost entirely analog for the majority of businesses. That makes payments a top pain point for sellers and buyers alike, because the existing process is cumbersome, expensive, and often unsafe. And though digital solutions exist, until now, they’ve been too costly and complex to be accessible to the majority of merchants, particularly smaller businesses — the population that’s hurt the most by the challenges of the existing system.

However, the tides are beginning to turn.

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Visa is pushing further into the B2B payments industry (V)

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