To change the status quo — to upend the way it’s always been done — the mantra goes, “think outside the box.”
Or in payments, think beyond the rails.
To that end, Alan Koenigsberg, global head of new payment flows at Visa Business Solutions, said in a Masterclass interview with Karen Webster that the B2B space represents a landscape ripe with opportunity.
To get a sense of the size and scope, consider the fact that there is $120 trillion in annual B2B spend across the globe, he noted.
Of that tally, roughly $4 trillion takes place via card payments.
“The rest of it is wire payments with foreign exchange, domestic wires, as well as cash and other types of transactions and checks,” Koenigsberg told Webster.
For Visa, he added, the focus has been on streamlining the way B2B payments are made, with an emphasis on serving a range of financial institutions.
Koenigsberg’s comments came against a backdrop of Visa’s recently launched Visa B2B Connect, which is now live in 62 countries around the world. The company said Visa B2B Connect exists as a brand-new, end-to-end global payments network that helps its financial institution clients move high-value payments cross-border for their corporate clients — directly from the origin bank to the recipient bank. Funds are settled either same or next-day.
Visa’s B2B-focused initiatives, noted Koenigsberg in the Masterclass interview, show that “when we think about the whole [B2B] payments business, we don’t only think about cards. We think about what we can do ‘beyond the card.’”
And in bringing new solutions to FIs, which in turn bring them to their own corporate clients, he said, it is important to view what more can be done through the lens of the relationship corporates have with their banks.
Through the last three to five years, Koenigsberg added, the continued emergence of FinTechs means that a number of what he termed “strong point solutions have come to market to help banks or enterprises address B2B payment flows.
“There is an aggregation effect that needs to happen,” he said, “to take those point solutions into a basket of integrated payables and integrated receivables solutions that can be purveyed across all segments of banks — and, of course, across all verticals of corporates.”
And in bringing such integrated solutions to end clients, Koenigsberg noted that it is crucial for banks to demonstrate that returns on investment will be significant, representing an improvement to existing B2B payment processes that is not just better for buyers and suppliers alike, but is “a step change better.”
The embrace of integrated solutions has benefits up and down supply chains, Koenigsberg said, and for all stakeholders in the B2B payments realm.
“Whether you buy it, build it or you partner to deliver these solutions, we think it brings together an industry that includes Visa, financial technology companies and their partners around the world that are really looking to help drive change … and to identify challenges that haven't even been articulated yet,” he said.
Looking at the B2B space over the past decade, Koenigsberg told Webster, “we’ve made a lot of progress, and there is still much more to be made.”