Visa climbs onto fintech payments train

Visa said it was well advanced with plans to further promote use of its digital card-based payments infrastructure and products into areas such as business purchasing and procurement.

Visa executives said that their company was already running a strategy in Australia and New Zeqaland to "bridge the gap between traditional purchasing cards and trade finance instruments" for its medium to large corporate clients.

And Deloitte released a survey, run on behalf of Visa, which it said revealed frustration with current payment processes amongst both suppliers and those responsible for settling accounts, with many still struggling to "cut out paper" from the process.  

Richard Miller, Deloitte's director of payments advisory practice, said Deloitte surveyed finance or procurement professionals at 150 companies in Australia and New Zealand and found many firms where the payment mechanism, while maybe being made electronically, still required a lot of manual processing - "causing a lot of frustration".

The survey report says electronic payment methods such as card-based  solutions were "consistently evaluated as being better, faster and cheaper than alternative mechanisms".

Miller said centralising payments allowed firms to ensure employees bought the "right" goods and services from contracted suppliers at contracted prices.

"These card and digital account payments can be more than 70 per cent more cost effective than a traditional purchase order process, particularly when you consider the downstream benefits such as better data for analytics and reporting (reported by 63 per cent of buying organisations)," he said.

"And when it comes to being paid, more than 7 in ten (73 per cent) of the survey respondents rated faster payment as an important benefit of accepting cards, with 49 per cent saying that cards reduced the cost of doing business and 68 per cent experienced a reduction in administration."

The report shows card-based payments have increased three to five times faster than the overall growth in economic activity in both Australia and NZ, through increased adoption and by opening up new spend categories.

It says the emphasis CFOs and other professionals are putting on cash flow analytics has evolved, promoting the accounts payable section from "an invoice processing factory" to a more advisory role in financial management, such as cash flow management and production planning with very real benefits.

Despite these advantages, the report says many companies are reluctant to move to card-based payments systems for B2B purchase orders and payments.

Suppliers said they didn't accept cards, most citing the acceptance fee which is similar to the 0.9 per cent charged for Visa's consumer credit cards.