Finance
Visa Sees Embedded Finance as Key to B2B Commerce Evolution
As businesses of all sizes across a multitude of verticals seek more efficient ways to manage payments and working capital, embedded finance is emerging as a transformative force in B2B commerce.
That’s the view of Alan Koenigsberg, senior vice president and global head of large, middle market, industry verticals and working capital solutions at Visa, who told Karen Webster that consumer-like experiences online will help bring analog B2B interactions fully into the digital realm.
Koenigsberg — interviewed for PYMNTS’ “What’s Next in Payments” series — emphasized that while embedded finance has been a staple in consumer eCommerce for years, its application in the B2B space is gaining momentum. However, there will not necessarily be a hockey stick adoption curve.
“We’re likely to see larger firms take up the embedded finance mantle, and smaller enterprises will follow suit,” he said.
In the meantime, he said he believes the adoption of certain back-office technologies such as treasury workstations and enterprise resource planning (ERP) systems will present treasurers with data to help them see additional working capital benefits by “doing something different — and then you’ve added value. That’s a big part of what Visa does.”
The Importance of Scale
Koenigsberg highlighted the role of scale in driving the adoption of embedded finance across the financial supply chain. He emphasized that while technology is essential, the real challenge lies in achieving scalable solutions that can meet the diverse needs of various stakeholders.
“The field is littered with non-scale solutions built in a way that was not for that customer,” he said.
He explained that scalable embedded finance solutions must adapt to the specific needs of businesses, particularly in the B2B sector. This approach ensures that financial products can seamlessly integrate into existing workflows, thereby reducing friction and enhancing user experience.
One of the key innovations Visa has focused on is the reassembly of financial products through partnerships, such as with SAP’s Taulia. The partnership brings together Visa’s digital payments technology and Taulia virtual cards, a solution that integrates with SAP’s ERP offerings and business applications.
The importance of scale is also evident in the broader context of working capital management. Koenigsberg pointed out that effective working capital solutions can enhance the financial efficiency of businesses, especially in a fluctuating economic environment marked by rising interest rates and changing market dynamics.
The Working Capital Framework
Central to the discussion of innovations in embedded finance is the concept of working capital management. The recent period of rising interest rates has brought renewed focus to accounts receivable processes, after a decade of developments primarily centered on accounts payable and buyer-led solutions.
“It does feel like a little bit of the ‘Back to the Future’ kind of comment,” Koenigsberg said, noting the shift in focus. However, he stressed that the goal remains to make transactions easier for both buyers and sellers, regardless of their size or relative market power.
Visa’s role in this evolving landscape is as a connector of commerce, according to Koenigsberg. He said the company aims to facilitate connections between financial institutions and between different elements of the financial value chain on a global scale. This position allows Visa to adapt solutions from one market to another, sharing information and making innovations more widely applicable.
Koenigsberg highlighted the importance of industry specialization in developing effective embedded finance solutions.
“The winners here will be industry specialists,” he predicted, pointing to sectors like aerospace and fleet as areas where deep industry knowledge will be crucial for building trust and creating tailored solutions.
The transformation of various verticals has been pushed toward a “tipping point” as younger generations, particularly Generation Z consumers, become more prevalent in the workforce, Koenigsberg said. He suggested that younger professionals entering the business world are questioning why their work experiences don’t match the digital experiences they’re accustomed to in their personal lives.
Technology Challenges
The push for embedded finance in B2B is not without challenges. Koenigsberg acknowledged that while the technology piece can be daunting at first, it’s often the easiest part of the equation. The bigger challenge is changing established processes and overcoming organizational inertia.
To address these challenges, Koenigsberg stressed the importance of making solutions “out-of-the-box ready” for corporate customers.
Looking ahead, Koenigsberg said he sees 2024 as a pivotal year for embedded finance in B2B commerce. With many of the technological pieces now in place and a growing demand for more efficient processes, the time has come for action.
“As we go through the midpoint of this year, it’s time for execution,” he said. “It’s time to go live.”
He emphasized the need for companies to spend more time listening to customers as they build and adapt their solutions, ensuring they’re easy to implement and truly meet business needs.
Finance
Las Cruces finance director gets national honor for ‘exceptional contributions’
EL PASO, Texas (KTSM) — The City of Las Cruces’ finance director has received a national honor recognizing “exceptional contributions to public finance and local government service,” the City said.
Finance Director Lesley Doyle was selected by the Government Finance Officers Association (GFOA) to receive the organization’s “Recognition for Outstanding Public Service.”
The award recognizes Doyle’s leadership during a critical financial period for the City.
She stepped into the role of finance director as the City’s FY25 audit identified a projected beginning balance shortfall of more than $10 million in a community of nearly 120,000 residents, the City said.
Doyle led a coordinated effort to communicate the financial situation clearly to City departments, executive leadership, and the City Council, while working with the budget team to close the gap without reducing essential services.
Josie Trevino, assistant finance director, credited Doyle with building a culture of trust and collaboration between the Finance Department and other City departments from the beginning of her tenure.
Doyle came to municipal government after a career in public education, transitioning from a school district into City finance leadership.
“In her first year, she met the challenge with confidence, emphasizing open communication, transparency, and proactive problem-solving. Her leadership has helped strengthen relationships across the organization while fostering a positive and supportive workplace culture within the Finance Department,” the City of Las Cruces said.
“The balance of technical skill and genuine care for people is what makes Lesley’s leadership unique,” Trevino said.
The GFOA has published Doyle’s recognition on its website, and her story will also be highlighted during the upcoming GFOA newsletter and highlighted at the annual GFOA conference.
Finance
Former top Treasury adviser warns that HMRC plans to track personal finances with AI
A former senior Treasury adviser to Gordon Brown has warned that HMRC is on the cusp of using artificial intelligence to track people’s and businesses income and expenditure without them knowing.
Dr Chris Wales, who was a member of Mr Brown’s Council of Economic Advisers for more than six years, has sounded the alarm while launching a chilling book on the conduct of the Spanish tax authority, Agencia Tributaria.
He is set to join former Labour Treasury minister Baroness Dawn Primarolo at an event next week flagging up how the Spanish model of dealing with tax evasion is about to arrive in the UK suggesting that the door is opening for a “surveillance state.”
In a preview of the future, Dr Wales has claimed that confidentiality in personal life – not just finances – “will simply go out of the window” and asks whether there are adequate safeguards in the UK to prevent HMRC from emulating its Spanish counterpart.
He said: “From 1 January, every single invoice will go through the tax agency in Spain. The Inspector can already obtain all your utility bills and will soon find out which clinic and pharmacy you use and what you buy there, which restaurants you eat at, where you purchase wine and groceries, what kind of car you have, how far you drive and where you park, what flights you take and which hotels you use. Information security? A thing of the past.”
He went on: “I am far from being a libertarian, but I see great danger in the direction in which tax authority powers are going, particularly because the process doesn’t seem to involve our active consent. There is little parliamentary debate about it. In Spain it is simply out of control. In the UK, let’s see.”
Highlighting the CONNECT AI program already used by HMRC in the UK, Dr Wales claimed that the UK is now close to following Spain’s lead.
He said: “HMRC has been using sophisticated information technology for years including an AI system called CONNECT which, as early as 2023, was said to contain more than 55 billion taxpayer-related data items.
“It will be much bigger today with these billions of pieces of information about taxpayers capable of being sorted quickly by AI.”
Dr Wales, who is now senior research adviser at International Centre for Tax and Development, added that HMRC also declines to say what algorithms it uses, under the pretext that if you publish them people will “game the system”, a claim that he suggests does not stand up to scrutiny.
“The system is understood to be used to target evasion. For tax authorities, everyone is a potential tax evader. This means that they believe they have a legitimate reason to collect data about all of us,” he said.
Finance
Boyle Heights warehouse fire: Where neighbors, victims can seek financial assistance
More than two weeks after a fire broke out inside the Lineage warehouse in Boyle Heights, many neighbors have received N95 masks and air purified while mobile health clinics are set up in their area.
But some neighbors said the massive fire that sent toxic fume into the air and created a horrendous stench of rotting food has cost them out of pocket.
Neighbors said they missed days of work while spending extra money on property cleanup. One woman said she spent hundreds of dollars on air purified before they became more widely distributed.
Lineage, the company that operates the burned warehouse, donated $2 million to the California Community Foundation (CCF) so the money can be distributed to the community. The organization said it’s split the money between different organizations.
At least 10 of them are listed as providing financial assistance.
The Boyle Heights Chamber of Commerce said it’s offering small business grants funded, in part, by the group, Inclusive Action for the City.
“We’re hoping that for brick and mortars: it would be up to $3,000. And then for our vendors, it would be up to $1,000,” Miriam Rodriguez with the Boyle Heights Chamber of Commerce said, adding the application is “very straightforward.” “It’s intentionally made that way so that there’s not a lot of requirements. We’re not asking for legal status. We’re not asking for pages of documentation.”
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