Visa, the world’s largest credit card company, is looking into B2B payments collaborations with fintech companies to bolster its corporate card-based solutions. Payments to suppliers, reconciliations, and GST-based payments will be among the services available.
The company seeks long-term collaborations with corporate and B2B suppliers across the whole value chain. Visa India and South Asia’s group country manager, Sandeep Ghosh, told ET that the credit card company is looking into investing in fintech businesses.
“In the recent last few years, there has been an adoption of corporate and commercial cards for statutory payments like GST, procurement where businesses are understanding the benefits of adopting card-based payments and it is a big opportunity,” said Ghosh.
The company is currently looking for fintech startups that specialize in dynamic underwriting solutions. Visa hopes to make credit available to more small and medium enterprises (SMBs) through its credit card products.
Visa took part in the $25 million Series D financing of PayMate, a B2B payments automation platform, in July 2019. SMBs may automate their procure-to-pay (P2P) payments with the help of the business, which also engaged an ex-Visa employee as an independent director.
Clear, formerly Cleartax, is one of Visa’s current competitors in the segment. Xpedize, a Gurugram-based supply chain finance firm, was recently purchased by the Bengaluru-based financial SaaS and tax filing startup.
Clear has been able to enter into credit agreements for SMBs and B2B payments, comparable to Visa’s strategy.
Visa and Mastercard, two of the most well-known credit card companies, have long been active participants in India’s fintech environment. Mastercard invested in Instamojo, a B2B financial platform, last year. Before that, the credit card corporation took part in a $5.4 million fundraising round for fintech SaaS startup Signzy in 2020.
In 2020, Mastercard also invested in the IPO-bound PoS unicorn Pine Labs. As previously stated, Visa has partnered with startups to offer co-branded debit and credit cards. Open, a financial startup, is another example to consider.
Visa teamed with the financial unicorn Open in 2019 to develop a business card for small businesses and startups, similar to what it is doing now. Visa was also a partner with fintech giant Paytm for the latter’s debit card rollout in 2019.
Visa and B2B Fintech startups
B2B payments account for a fifth of all card payments in India, according to Visa. Before the pandemic, most of these costs were accounted for by corporate use cases such as staff travel and entertainment.
Supplier-related settlements and payments to SMBs and vendors accounted for over four-fifths of card-based B2B payments after the pandemic, according to Visa. Since employee travel and entertainment expenses have dropped to 20%, the credit card company wants to improve its B2B game.
“In comparison to Europe and other economies, the B2B flow is still an underserved sector in India,” Ghosh added. “India is well-positioned for future adoption of digital payments.”
B2B payments are expected to account for nearly half of all transaction volumes on Visa’s network in the country, with B2C accounting for the remainder.