Visa & Validus partner to provide virtual card solutions for SMEs

As published in SMB World Asia:

Visa has partnered with Validus, a FinTech platform, to provide small and medium enterprises (SMEs) with virtual card solutions to help scale their businesses. The partnership seeks to unlock capital for SMEs to reinvest in their products and services.

The solution has been adopted by GroXers Inc Pte Ltd, an F&B distributor in Singapore.

Through this partnership, Validus works with Visa to facilitate immediate cash flow to SMEs, who have unpaid invoices in their payment cycles. By clearing invoices for SMEs using a Visa virtual commercial card, Validus helps SMEs expand faster and have a faster turnover for their products and services.

The food & beverage (F&B) businesses, have to deal with a large number of buyers ranging from multinational corporations (MNCs) to smaller retail outlets.

This large volume of invoices present a unique problem for banks, which may be reluctant to discount invoices payable by SME customers. Validus mitigates this risk for the suppliers.

Validus also facilitates the tracking and management of invoice repayments via a tech solution as opposed to the traditional manual approach, which is time-consuming and prone to error. This is enabled by Visa’s commercial card solution and the fintech solution that Validus provides. This programme is part of Visa’s ongoing efforts to support SMEs in Singapore and across the world.

According to Vikram Kshettry, Head for B2B Partnerships and Small Business Asia Pacific at Visa, “Small businesses often face challenges such as access to capital to fund their business growth and this makes them vulnerable. Similarly, suppliers for these businesses may be challenged to provide adequate credit, as they do not have the skills to underwrite higher credit lines. It is essential that businesses are able to access credit from specialist lenders to invest in their businesses, and for suppliers to be paid on time. The presence of such lenders, who can respond faster to business needs, is key to Singapore’s continued SME growth.”

GroXers Inc, a leading enterprise run by well-known Singaporean entrepreneur, Nichol Ng, stated that the solution has freed up their cash flows considerably.

“We have been looking for a solution that bridges the gap between our cash flow and account receivables and this is our biggest untapped asset. It is interesting to see how this solution has enabled us to receive our money faster and more seamlessly. At GroXers Inc, 100 per cent of our receivables from B2B retailers are now on credit card payment. We genuinely feel that in today’s economy, we should free our time and cash flow to focus on growing our business,” said Nichol, who is also Managing Director of GroXers Inc’s sister companies FoodXervices Inc. Pte Ltd, PlotX Inc Pte Ltd, LogiXtics Inc Pte Ltd, and X Properties Inc Pte Ltd.

According to Ng, FoodXervices Inc is also considering using the same solution.

Validus and Visa will look to increase their commitment to supporting SMEs in Singapore across a range of industries. This includes businesses that specialize in the distribution sector (e.g. Food & Beverages, FMCGs, consumer durables), services industries (e.g. construction, Information Technology, real estate, property management), and manufacturing (supply of goods from SMEs to large corporates).