Visa’s Growth Corporates Working Capital Index Reveals 300% Increase in Working Capital Efficiency

Asuncion, Paraguay, November 11, 2024 – From the 58th Annual Assembly of the Latin American Banks Federation (FELABAN), Visa, a global leader in digital payments, announced the results from its second annual global Growth Corporates Working Capital Index, which revealed important advancements in working capital efficiency, especially for growth corporates from Latin America and the Caribbean (LAC). The findings indicate that more than 7 in 10 financing users (75%) from the region reported improved buyer-supplier dynamics by using external working capital and 69% stated being better able to meet customer demand and take advantage of opportunities due to access to financing. 

The study also shows that while the Latin America region worries about potential recession and supply chain disruptions more than other Growth Corporates, CFOs from the region share an optimistic view on the future and the role of working capital as a strategic driver for growth and business performance. Of the interviewed companies, 85% said they were likely to use at least one working capital solution in the next 12 months. 

From a global perspective, more than 8 in 10 CFOs and treasurers took advantage of working capital solutions — registering a 13% increase year over year (YoY)while top-performing companies across regions also demonstrated remarkable financial efficiency, saving an average of $11 million in interest and fees – a YoY efficiency increase of 300%. The Index surveyed nearly 1,300 CFOs and treasurers across 8 industry segments and 23 countries, including 214 companies from Latin America and the Caribbean – a 73% increase from 124 surveyed in 2023. All companies represent “Growth Corporates,” which are organizations that generate between $50 million and $1 billion in annual revenue. 

In the context of the 58th Annual Assembly of FELABAN, which offers an opportunity to learn from and deepen relationships with more than 1,500 industry executives, Visa is reinforcing its commitment to working closely with businesses across the region to support their unique needs as they continue expanding.

“This year’s results from our Growth Corporates Working Capital Index demonstrate that access to flexible and innovative working capital solutions is becoming crucial to power mid-market companies’ growth and help them improve their operational efficiencies,” said Jose Luis Gonzales, head of Visa Commercial Solutions for Visa Latin America and the Caribbean. “This segment is a vital engine for our local economies, and as these companies continue to navigate macroeconomic uncertainties, at Visa we are committed to be an enabler of these businesses, providing best-in-class working capital strategies to effectively address their complex needs and help them thrive in this dynamic digital ecosystem.”

As the use of working capital solutions increases across Growth Corporates globally, CFOs and treasurers have become quite specific about what they expect from those solutions. Latin America and the Caribbean is the region where personalized/flexible products from banks matter the most; Growth Corporates from the region are looking for personalized, industry-specific working capital products (25%) indicating a significant regional focus on tailored solutions. They also expect bankers to offer digital-first and technological innovations (16%) with faster approval processes aligned with their strategic growth agenda and consultation services (15%). 

Virtual cards

With the world becoming increasingly digital, Growth Corporates are also following this trend with virtual cards showing a consistent uptick as an efficient and effective working capital solution. From a global perspective, virtual cards saw a 32% YoY increase in usage while 18% of companies surveyed in Latin America and the Caribbean used corporate/virtual cards, registering a growth of 13% YoY.

Growth Corporates who used virtual card solutions saw higher probability of reduced Days Payable Outstanding (DPO), strategic utilization of working capital, better cash flow predictability, more supplier integration into payment systems and early supplier payment.

The study also finds that 80% of top performers recognize the versatility of virtual cards to act both as a payables and financing solution. Virtual card use is projected to double next year, compared to bank lines of credit, with a projected increase of 67%. 

Additional key findings include:

• While usage of working capital solutions slightly decreased among LAC Growth Corporates (down 0.3% since 2023), 84% of surveyed Growth Corporates in the region used at least one external working capital solution in 2024. The region continues to have the highest Index score, the second-highest utilization rate of working capital solutions and the most strategically used working capital solutions when considering using them to cover planned cash flow gaps.
• “Cautious optimism” defined the business sentiment of the Growth Corporates surveyed worldwide. In 2024, many of them emerged from 2023 determined to fast-track digital transformation initiatives aimed at strengthening their balance sheets.
• Nearly half of Growth Corporates globally showed improvements in their operational efficiencies by using working capital to more predictably manage cash flow and fund strategic investments.
• Business expansion tops the list of working capital solution use cases (14%), followed by use to buy inventory or services (8%) and to invest in company’s assets – capital expenditure (6.6%). 
• Growth Corporates plan to use external working capital more in 2025 and 97% of the most efficient companies expect to use it more strategically than they did in 2024, rather than for emergency cases. 
• Utilization of working capital solutions are set to increase in 2025, especially for retail and marketplaces (+47%), media and technology (+36%) and commercial travel (+25%).

Methodology

The 2024-2025 Growth Corporates Working Capital Index, a report Visa commissioned to PYMNTS Intelligence, is based on a survey of 1,297 CFOs and treasurers across eight industry segments (Agriculture, Fleet & Mobility, Healthcare, Retail & Marketplaces, Media & Technology, Manufacturing & Construction, Professional & Facility and Services & B2B Travel), five global regions and 23 countries. It was carried out between May 21 and July 9, 2024 and included 38 questions on business metrics, utilization of external working capital, plans for the coming year, perceptions of future macroeconomic conditions and other survey concepts.

For more information about the Growth Corporate Working Capital Index, read the report here.

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About Visa
Visa (NYSE: V) is a world leader in digital payments, facilitating transactions between consumers, merchants, financial institutions and government entities across more than 200 countries and territories. Our mission is to connect the world through the most innovative, convenient, reliable and secure payments network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at Visa.com.