Growth corporates demonstrate 300% increase in working capital efficiency

Over four out of every five growth corporates (81%) adopted at least one working capital solution in 2024, according to Visa’s second annual global Growth Corporates Working Capital Index. Beyond increased adoption, top-performing companies saved an average of $11m in interest and fees – a year-over-year (YoY) efficiency increase of 300%.

Visa surveyed nearly 1,300 CFOs and treasurers across eight industry segments and 23 countries, all representing growth corporates - organisations that generate between $50m and $1bn in annual revenue.

Beyond the increased adoption of working capital solutions, virtual cards saw a particularly high uptick. These solutions offer on-demand working capital solutions that provide access to funds as corporate needs require. Virtual cards saw a 32% YoY increase in usage and were intrinsically linked to top-performing Index scores. Surveyed growth corporates who used virtual card solutions saw higher probability of reduced days payable outstanding (DPO), strategic utilisation of working capital, better cash flow predictability, more supplier integration into payment systems and early supplier payment.

The Index notably highlights that CFOs and treasurers of growth corporate businesses want relationship-based banking and personalised working capital solutions tailored to their specific industry, spending habits and business needs. Five out of eight industries represented by survey respondents cited lengthy approval processes and uncertainty about approval outcomes as their most significant obstacles, as respondents expressed the need for bankers with both the lending experience and working knowledge of their industry and region to design working capital solutions that fit their business requirements. And the stakes are high: 90% of respondents reported negative consequences when working capital access was denied or took too long.

This year’s report also found that more than half (58%) of top performers surveyed improved their working capital ratios, as evidenced by 51% shorter cash conversion cycles and 28% shorter days payable outstanding.

Strategic use cases drove 62% of working capital use. CFOs and treasurers were 35% more likely to use solutions to invest in company assets and 37% more likely to have invested in organic growth and expansion, than last year. Top performers surveyed achieved a 21% increase in their net profit margins and a 14% increase in their working capital ratios.

Developing markets and specific industries experienced remarkable gains. North America’s agriculture sector saw a 17% Index surge, healthcare in Europe and Asia-Pacific (APAC) led with 16% gains, and retail in Central Europe, Middle East and Africa (CEMEA) witnessed a 26% increase in Index scores.

“Growth corporates have unique needs and capabilities that often fall through the cracks between small businesses and enterprises,” said Lauren Hewings, Visa’s Head of Working Capital Solutioning. “This valuable segment, which really represents tomorrow’s enterprises, has historically lacked access to customised, industry-tailored products and solutions from their financial institutions; however, increasingly, they are demanding them from their financial institutions as they seek flexible, on-demand methods for optimising cash flow to drive strategic growth.”

 

Eurosystem seeks improved cross-border payments by interlinking fast payment systems

The Governing Council of the European Central Bank (ECB) has decided to launch initiatives to help improve cross-border payments within the EU and beyond. The work, which builds on the Eurosystem’s TARGET Instant Payment Settlement (TIPS) service, will include the following:

• Implementation of a cross-currency settlement service in TIPS. The service will allow instant payments originating in one TIPS currency to be settled in another TIPS currency and in central bank money. Initially, euro, Swedish kronor and Danish krone will be available for settlement.
• Exploratory work on linking TIPS with other fast payment systems. This will include developing links with partners outside the EU to improve cross-border payments globally.

The decision supports the G20 roadmap for creating a faster, cheaper, more transparent and accessible global payments ecosystem, while ensuring secure and reliable instant payments. It also contributes to the goal of the Eurosystem’s retail payments strategy, which aims to help European consumers and businesses make and receive payments involving partners outside the euro area.

 

Nium adds Swift real-time payments connection

Nium has announced that financial institutions can now leverage Swift capabilities and their existing Swift infrastructure to connect to Nium’s global real-time payments network. This connection is designed to provide an efficient and cost-effective solution for financial institutions to connect to Nium’s global infrastructure, eliminating the need for API integrations. Cross-border payments initiated via Swift can be completed on Nium’s network, resulting in faster settlement, end-to-end transparency, and full traceability for most popular corridors. 

For global businesses, navigating disparate financial systems and message formats can be a barrier to market expansion. The lack of standardisation, coupled with the need for tailored integrations, often limits access to new opportunities. However, as the industry moves to more standardisation, Nium is looking to serve as a payment messaging facilitator, supporting existing messaging formats, while bridging the path to new standards. This connection supports Swift MT message formats and ISO 20022 messaging, the new standard of cross-border payments worldwide. 

The firm says that more than 80% of payments completed on its network will settle within 15 minutes. Nium receives MT/ISO messages and uses its global infrastructure to route these messages through local clearing and real-time payment rails. It ensures that Swift’s GPI tracker is updated in real-time, allowing institutions to continue leveraging this existing solution for payment traceability. 

 

Nacha adds LexisNexis as preferred partner for official registrar of routing numbers

Nacha has welcomed LexisNexis Risk Solutions as the exclusive Preferred Partner in the category of Official Registrar of Routing Numbers. With its up-to-date routing data, LexisNexis Risk Solutions joins a group of organisations working with Nacha to enhance the ACH Network's efficiency and reliability.

Account validation providers that fail to keep current with routing number changes end up relying on outdated information which can result in a valid routing number being inaccurately rejected. That, in turn, blocks the creation of ACH payments. By partnering with Nacha, LexisNexis Risk Solutions is allowing more participants in the ACH Network to access accurate, up-to-date payment information, ensuring that payments are processed in a timely manner and reducing the likelihood of failed payments.

The LexisNexis Bankers Almanac Routing Transit Number (RTN) File enables efficient banking information searches for setting up, investigating and correcting payments. It offers data on financial institutions and payment routing details for nearly 10,000 US financial entities and more than 100,000 branches and locations. The American Bankers Association designated Bankers Almanac, now part of LexisNexis Risk Solutions, as the registrar more than one hundred years ago. Today, it continues to serve as the official registrar of routing numbers in the US.

“Accurate ACH payment routing relies on the availability and use of accurate and up-to-date routing data,” said Michael Herd, Executive Vice President of ACH Network Administration at Nacha. “We look forward to working with LexisNexis Risk Solutions as a Nacha Preferred Partner to enable ACH Network participants to have the best and most up-to-date routing data.”