The solution converts existing card limits into working capital for businesses
COVID-19 is proving to be a litmus test of resilience for businesses worldwide. In response to the new normal, InstaReM, the consumer and SMB brand under the global fintech platform Nium has launched the SMB fintech solution BizPay in Australia. BizPay utilizes credit limits in Corporate Cards and converts them into working capital to help businesses make payments, including commercial rent, utilities, or other supplier payments. The announcement comes shortly after the launch of BizPay in Singapore earlier in June.
SMBs often face challenges in securing loans or credits from banks or financial institutions. Even before the COVID-19 outbreak, only 52 percent of SMBs in Australia managed to get the loan needed. Delay in payments caused by the pandemic has further exacerbated credit problems faced by SMBs. While businesses may look to card-based payments to extend payment terms, the high transaction fees and FX markup act as a deterrent for payers as well as beneficiaries.
To help SMBs gain cashflows using existing credit lines, InstaReM’s BizPay enables businesses to use their corporate cards as a funding source for supplier payments. Leveraging InstaReM’s existing remittance platform, businesses would only need to type the name of the beneficiary, the amount and currency of payment, and charge the whole payment to their corporate card for funding. There is no need for the beneficiary to be directly card-accepting or to be onboarded as part of the payment process. Businesses now gain full control of costs by eliminating fees and charges associated with other credit solution options.
COVID-19 has caused significant disruption to working capital cycles and intensified the legacy liquidity concerns of SMBs. In such a situation, a means to generate funds using available credit resources emerges as a promising solution for businesses. Most companies in Australia have an existing corporate credit card system from financial institutions that is used for travel and entertainment expenses. With social distancing measures and travel lockdowns bringing business travel and entertainment to a standstill, BizPay gives companies a chance to utilize their existing card credit lines optimally, while also creating differentiated value for banks and financial institutions looking to generate usage of their credit cards.