Commercial credit cards have become a trend in the recent years. More and more companies shifted from traditional payment ways to use credit cards.
In recent years, Vietnam has become one of the fastest growing economies in the South East Asia. The nation stands in a strong position to attract significant foreign direct investment (FDI). In order to encourage a further growth, Vietnam has focused more on promoting innovation and driving the adoption of new technologies, with policies in favor of turning the nation into a cashless nation. And Commercial credit cards are the innovation being encouraged right now.
So far, Vietnam has already increased electronic payment acceptance among consumers, merchants, and businesses across the nation. One area that is primed for modernization is the B2B sector, where we have seen incredible growth, and an increasing demand for digitalized payment.
Despite the fact that digitalization is being encouraged, wire transfer has remained the dominant B2B payment channel in Vietnam. This is due to a lack of market awareness surrounding commercial credit cards and the sizable financial and practical benefits that these cards can offer corporations and SMEs. What are the difference of commercial credit cards from traditional credit cards? And how can companies benefit from it?
Streamlined Operations and Business Planning of Commercial Credit Cards
As business in Vietnam experiences unprecedented growth, many companies will be under pressure to streamline operations to realize cost savings and facilitate expansion.
As part of this, business firms need to start integrating payment solutions into their value chains. Digitalization through the use of business cards can help firms’ leaders to quickly itemize and categorize expenses, allowing them to easily identify areas of the business that are costly or inefficient.
In other word, business credit cards can act as a highly effective business planning and operational budgeting tool.
With enhanced reporting solutions, businessmen can also insure against misuse or poor management of employee expenses. Digitalizing company expenditure can allow employers to look at existing expense divisions, such as travel and entertainment (T&E) or daily procurement, and identify potential areas for streamlining or cost saving within the company’s operations.
Attractive Financial Incentives and Cost Savings
Through the use of business card incentives like interest free days and installment payments, SMEs can realize alternative ways to access and expand working capital, and this in turn can expedite a company’s growth. Business cards can also give rise to improved cash-flow forecasting and enable optimization of working capital. For sure, these benefits can also save money for businesses in the long run.
In addition to improved cashflow, there are sizable cashback, promotional and non-financial incentives to digitalizing B2B payments. Visa has negotiated discounts with more than 30 service providers in part of an initiative to bring meaningful benefits to Visa business cards’ holders in Vietnam. By issuing discounts for key useful service providers, businesses may be encouraged to take advantage of new technologies and services that can help the company to achieve further growth.
Better Accounting Processes and Reduced Administration
Another benefit of business cards that is sometimes overlooked is optimization of time and labor within enterprises. A survey conducted by Visa in the Asia Pacific in 2019 discovered that the average SME spends 60 hours per month on administrative tasks such as invoicing, reconciliation and expenses. One of the major setbacks of relying on wire transfer is that processing times for fund transfer and post-transaction reconciliation can be cumbersome, time consuming and leave room for errors and delays. By using business cards, SMEs can save a significant amount of their accounting and finance team’s time, due to fast processing and automatic itemization that is inherent in digital payments. By making these divisions more efficient, companies can unlock time and resource to focus on growing their business.
Business cards pave the way for a modernized economy
Ms. Dang Tuyet Dung, Country Manager for Visa Vietnam and Laos said: “As the B2B economy continues to grow and internationalize, achieving faster and more efficient transactions between enterprises will become a key priority in Vietnam. The seamless and secure nature of digital payments is already empowering businesses with better business planning, sizable cost savings and optimized financial resource.”
With SMEs accounting for 98 percent of the 760,000 enterprises in Vietnam, and with growth being a key priority for small businesses, this sector is primed to take advantage of modernized payments. And with SMEs contributing approximately 45 percent in GDP and responsible for creating five million jobs by the end of 2019, improved processes and capital in this landscape will mean faster growth for Vietnam as a whole as it continues to rise on the regional and global stage.