Adam Smith originally coined the phrase "a nation of shopkeepers" when describing the framework of a consumer-based economy. However, more than 220 years later, that concept has grown, evolved and expanded so that, rather than being limited to the concept of "trade", it enshrines the idea of entrepreneurship and ingenuity.
And it's this entrepreneurship that, according to the Department of Business, Energy and Industrial Strategy, is powering the United Kingdom's economy with more than 5.7 million small to medium sized enterprises employing more than 16 million people around the country and accounting for nearly £2 trillion in turnover.i
Effectively managing working capital can do more than simply keep this economic engine running. Companies that prioritise their working capital are more nimble and better placed for success during an economic downturn. Banks play a valuable role in helping businesses with working capital, whether it's by creating lines of credit, providing small business loans or working with technology partners that provide flexible payment solutions.
Many companies are unable to use the full extent of the working capital available to them due to their suppliers not accepting card-based payments. This can result in unnecessary lengthening of the working capital cycle due to the longer timeframe needed to go through the invoicing process. Commercial card credit lines have the potential to reduce this timeline, giving businesses much-needed flexibility in their money management.
This is why Visa has partnered with Optal, to help scale their platform solution Invapay. The Invapay platform supports customers looking to pay tax, utility bills, commercial rents and subcontractor payments - recipients which often don't accept credit cards, and are underserved by current working capital solutions such as trade and supply chain finance.
Companies simply need to register their commercial cards on the Invapay platform. They can then quickly and easily debit money from their account onto the platform, which then processes an electronic funds transfer to their supplier.
If you are a financial institution interested in how the Invapay platform can help your business clients, click here to learn more.
i BEIS Small and Medium Enterprises (SME) Action Plan 2019