Introduction

As the global economy has grown more connected, the doors have opened for small- and medium-sized businesses (SMBs) to do everything from reaching a global clientele to paying employees around the world.¹ But with these opportunities come increased complexity and novel challenges for SMB owners, whether it be understanding how to access capital to sustain and grow their businesses, decipher their priorities amid a deluge of information from different sources, or streamline their operations and controlling their cash-flow management.

The most challenging part? SMB owners are often dealing with all these problems on their own and wearing every hat from accounting to IT.

But nothing great is made alone, which is why Visa Direct and its partners are giving these business owners a helping hand by equipping them with groundbreaking technology so that they can spend more time running their businesses and less time managing financial minutiae and waiting for their money.      

 “Having visibility and total control over how to best manage cash flow is a necessity for companies of all sizes,” says Richard Meszaros, Vice President and Head of Cross-Border Money Movement for Visa Direct NA. “Visa collaborates with many key payments players across the ecosystem such as Veem, Payouts Network, and Wave to bring more control, choice, and optionality to the SMBs they support by offering eligible cards and Visa Direct to enable real-time² payments to send money around the world.”

Having visibility and total control over how to best manage cash flow is necessity for companies of all sizes.

— Richard Meszaros, VP and Head of Cross-Border Money Movement, NA, Visa Direct

Veem enables businesses to pay and get paid globally, centering on a simple experience where businesses have a range of payment options for managing their payables/receivables and controlling their cash flow. Payment facilitators like Payouts Network are expanding merchant toolkits to be able to pay a global community of vendors and suppliers, thus helping small businesses manage their cash flow. There are even full-service SaaS platforms like Wave that are empowering SMBs to take charge of their financial operations all in one place. Each of them is solving complex issues for small business owners and empowering them to take control of their financial futures.

What do all these tools have in common? They are enabled by Visa Direct to provide transparent and fast money movement solutions for a global community of small businesses.

Cash flow is king

One of the most stressful times in a small business owner’s career is the gap between a customer making a purchase and the money hitting their bank account. It can be an excruciating delay for budding and veteran entrepreneurs alike and puts a business’s cash flow in a sort of limbo. Being neither here nor there can prevent business owners from being able to reinvest that capital back into their company.

“The new generation of small business owners expect things to be fast. They want to hear why something like payment disbursements take so long,” says Marwan Forzley, CEO of Veem. Forzley knows that with the digitization of technology, the expectations of business owners have shifted just as much as those of consumers. “When we talk to people, they’ll say, ‘I sent an email, and it shows up on the other end in an instant. How come payments don’t work like that?’” 

The new generation of small business owners expect things to be fast. They want to hear why something like payment disbursements takes so long.

— Marwan Forzley, CEO, Veem

Veem takes its cues from that always on, always connected philosophy of consumer technology. If you can send money to your friend with a few taps on a phone, why shouldn’t business owners be able to do the same thing when they need to pay a vendor or send an invoice? “As a business owner, you’re looking for ways to get money as fast as possible,” says Forzley. “It doesn’t matter where you are or whether the payment is domestic or cross-border. It’s just so important that you collect your money as soon as possible, and so delivering the payment fast to their customer is a game changer.”

Real-time cash flow management can be a vital component of a healthy business. Consider the pace of traditional merchant settlements where it can take days before a customer’s payment hits a business bank account. These transactions can take days because of the traditional batch transaction processing prevalent in banks today, and for cross-border transactions they may need to hop between multiple banks to clear, increasing the time to receive funds in their account. These transactions also bounce back and forth among three separate financial institutions: the customer’s bank, the business owner’s bank, and the merchant acquirer itself. All that communication can take time, but a new generation of platforms is using groundbreaking technology to speed up those processes and get money into the hands of business owners quickly and safely—two areas where Visa Direct thrives.

It doesn’t matter where you are or whether the payment is domestic or cross-border. It’s just so important that you collect your money as soon as possible, and so delivering the payment fast to their customer is a game changer.

— Marwan Forzley, CEO, Veem
One other advantage of these new technologies? Merchants can pay and receive their money by using their eligible debit credentials rather than their bank routing info.² “The demands that we hear are easier, faster, better data, and better security. We focus heavily on making sure that our solution is turnkey,” says Keith Smith, president and CEO of Payouts Network. “We aren’t increasing their technical debt. That’s a requirement with SMBs. They want the power of the big companies, but they want to scale it down to what they can use without taking up their time.”

Legacy systems often force SMBs to wait business days between a customer transaction and the money being available in the business’s bank account. A Visa survey of Brazilian SMB owners found that 60% of reported cash flow issues stemmed directly from payout speeds; merchant settlements were the leading cause of the lag.³ Visa Direct enables payments in real-time,² not days, which can help alleviate those cash flow issues faced by SMBs around the globe.

These delays have material impacts on how business owners run their operations and can create unnecessary stress for entrepreneurs who are already dealing with thin margins. And that can be especially harrowing when the world gets a little unpredictable. “When there were all those issues with global supply chains, there were a lot of suppliers that refused to ship anything until they got paid. And the sooner they get paid, the quicker they were able to deliver,” Forzley says.

The same goes for downstream payment flows, such as when SMB owners need to get money into the hands of their employees or customers. Payouts Network is helping small- and mid-sized businesses financially empower their teams by giving them tools like instant payouts for tipped employees, which can help attract talent and reduce turnover. Payouts Network also helps SMB owners build bonds with their customers by doing everything from quickly funding incentive programs to providing real-time² refunds in different industries like travel. These payouts can be delivered direct-to-card for eligible cards as well, giving customers an easy way to get paid in their local currency without the hassle of conversions.

A new kind of business

Businesses themselves are transforming, too. Small business leaders have more and more choices about how they want to sell their goods—and many are choosing to forego having a brick-and-mortar operation in the first place. Helping these “micro-preneurs” find their business footing is one of Wave’s goals. The all-in-one financial platform empowers SMBs to do everything from running their own accounts to processing payments and invoices. Those tools can be especially helpful for SMB owners who are used to wearing every hat in their business; by putting everything in one place, Wave is providing those micro-preneurs with a team’s worth of resources.
“A lot of the people we help don’t have the benefit of somebody on the team who does the accounting and bookkeeping and somebody who does the sales and invoicing,” says Reza Rahimi, Senior Director of Financial Capabilities and Payroll at Wave. “It’s a one-person operation running everything, and it’s super valuable when they can see business insights for the first time or look at cash flow. They’re able to finally see how their business is doing. A lot of them even get surprised by how much money they were making or losing in the first few months.”

A lot of the people we help don’t have the benefit of somebody on the team who does the accounting and bookkeeping and somebody who does the sales and invoicing. It’s a one-person operation running everything, and it’s super valuable when they can see business insights for the first time or look at cash flow.

— Reza Rahimi, Senior Director, Financial Capabilities & Payroll, Wave
Even though a new generation of entrepreneurs is causing a paradigm shift, they’re still dealing with the same issues that have plagued SMB owners for years. These include the slow pace of disbursements and frustrations with international payments. Visa commissioned a survey of 750 U.S. based marketplace sellers that use global marketplaces (both domestic and cross-border sales) to determine their payout preferences, and 67% of those surveyed said that waiting for payouts affected their ability to do business while more than half of those surveyed said that they would switch to a marketplace with a real-time payout option.⁴

“It’s clear that these online marketplaces may need the infrastructure to pay their sellers quickly and easily, domestically and cross-border, ⁵ as well as offer more payment options–whether that be directly to their eligible debit card, bank account, or wallet.⁶ Marketplaces can meet these demands with the help of Visa Direct and its network of enabling partners,” says Yanilsa Gonzalez-Ore Senior Vice President Visa Direct NA and Global Ecosystem.

That problem doesn’t just concern domestic entrepreneurs. According to a report from Americas Market Intelligence commissioned by Visa, approximately 40% of the cross-border disbursements transactions initiated by the over 2,700 interviewed Latin American individuals in the study took more than a week.³

Every business needs access to their money in the way that works best for them, and the new ways of doing business require a new generation of platforms and money movement networks to power them. Visa Direct helps platforms like Wave give their customers speed, transparency, and security for push-to-card transactions, whether they’re a long-established business or an entrepreneur just getting started.

The future is built by small businesses

The world has changed significantly for SMBs over the past few years, and business owners are still navigating new opportunities and challenges. Payouts Network, Veem, and Wave are all working to brighten those dark spots on the map, and by working with Visa Direct, they’re giving business owners access to a connected, secure, and transparent network around the world. 

“Visa Direct is the network when it comes to moving money fast and being able to reach the masses,” says Keith from Payouts Network. He points to Visa Direct’s ability to help steer through complex compliance issues for international customers as one way the global network is helping propel SMBs forward. “Visa Direct has helped us connect all the dots and develop a comprehensive solution that doesn’t put a tremendous extra burden on us. If we were trying to do it on our own, it would be a probably unattainable task. But with Visa Direct we’re able to execute that relatively quickly.”

Visa Direct is the network when it comes to moving money fast and being able to reach the masses.

— Keith Smith, Founder & CEO, Payouts Network

Visa Direct and our enabling partners are supporting small businesses around the corner and around the globe. But that support goes way beyond helping SMBs accept payments; together with our partners we’re helping create an improved financial system that gives SMBs the tools they need to thrive in a modern economy. From seamless payment experiences that help businesses expand their customer base to fast payment settlements that help them do everything from paying bills to expanding operations, Visa Direct is changing the game for SMBs around the world.

SMBs are the lifeblood of the global economy, and the challenges they’re facing are more complex than ever. Visa Direct is helping a new generation of entrepreneurs unlock those doors and usher in a new global economy in the process.

Footnotes

  • ¹ Use cases are for illustrative purposes only. Program providers are responsible for their programs and compliance with any applicable laws and regulations.
  • ²Actual fund availability depends on the receiving financial institution and region.
  • ³ Americas Market Intelligence commissioned by Visa. Faster Money Transfers in Latin America: Insights for success in the digital era. Surveyed 2,700 consumers and 1,000 SMBs in 7 LA countries. March 2022.
  • ⁴ Visa-commissioned Reshaping Online Marketplaces with Real-Time Seller Payouts survey (August 2020). Conducted by Raconteur.
  • ⁵ CROSS BORDER DISCLAIMER  Actual fund availability varies by receiving financial institution, receiving account type, region, and whether transaction is domestic or cross-border.
  • ⁶ WALLET DISCLAIMER Visa Direct Wallet capability is under development and not yet commercially available.