CEMEA Spearheads Growing Adoption of Working Capital Solutions
The reliance on digital payments solutions is expected to gather pace in 2024, with implications for the growing but underserved Growth Corporates that help drive global economies. Visa’s newly-released 2023 – 2024 Growth Corporates Working Capital Index (WCI) expects 92% of CFOs will increase their use of working capital solutions, with the largest rise in usage expected in Central and Eastern Europe, Middle East and Africa (CEMEA)1.
The WCI this year surveyed 873 CFOs and treasurers across 23 countries2 and sheds light on how the right working capital solutions can fuel the steady growth of middle market companies. It also anticipates the working capital requirements for these businesses in the year ahead.
Global Businesses Adapt to a Changing Landscape
This year’s report highlights that there has been a global shift in the adoption of diverse forms of working capital, noting a 30% increase3, and that the most successful businesses globally are making solutions work for them and boosting savings. In the context of a rapidly transforming consumer payments landscape, the WCI highlights five notable trends, whether driven by increasing digital sophistication or changing customer needs:
• Automation and Digitisation – increasingly consumer-oriented solutions and models will be favoured in B2B payments with innovation accelerating to meet changing consumer demands.
• Embedded Finance – digital players are championing one-stop-shop financial services platforms as businesses anticipate greater integration of these offerings in existing workflows.
• Demand for Working Capital – the working capital value proposition will continue to change. A renewed focus on cost reduction and operational efficiency is prompting many companies to make strategic shifts in the ways they use working capital.
• Artificial Intelligence – Generative AI will continue to unlock new efficiencies in ways of working and customer engagement. Looking ahead, however, concerns remain around risk identification and fraud prevention in the adoption of such technologies.
• Global Money Movement – the need for supply chain resilience has driven a surge in cross boarder payments and has highlighted the need for transparent and globally accessible transactions.
CEMEA Leads on Growth Potential
In CEMEA, specifically, there are a unique set of challenges and opportunities that face the region as it continues to make commercial and technological leaps forward. The WCI identifies the region as having the greatest potential for growth, with the overall number of working capital solutions being employed expected to see significant increases.
The report identifies five key trends in the application of working capital solutions by CEMEA companies:
• Strategic Utilisation of Working Capital Solutions – over one-third of growth corporates in CEMEA use working capital solutions for emergencies, missing strategic benefits. Proactive use, however, can increase financial efficiency, with CFOs improving days payable outstanding by 67%4.
• Adopting Virtual Card Solutions – CEMEA's rapidly developing digital landscape is prompting a preference for digital solutions such as virtual cards, offering enhanced security, spending oversight, and streamlined expense management.
• Diverse Range of Advisory – 40% of CEMEA firms prioritize working capital consultants over other advisors, outpacing Europe and North America in this trend, while 31% favour fintech providers, highlighting a shift towards specialized financial advisory5.
• Emerging Focus on Supply Chain Financing – CEMEA's growing interest in supply chain financing aims to boost liquidity and resilience. Companies are seeking innovative models for supplier payments that can provide flexible payment terms, while optimizing their own working capital.
• Challenges in Financial Tool Adoption – although CEMEA is taking huge technological strides forward, the adoption of financial tools still faces hurdles, with misconceptions and poor management expected to continue restricting access for many.
Looking at the year ahead, the WCI paints an optimistic picture for the global and regional uptake of working capital solutions to enable further growth for businesses and, at its core, Visa is working tirelessly to meet the requirements of businesses today. Visa is constantly evolving its solutions in this sector, driven by its commitment to ongoing innovation and partnership within the financial services sector as it strives to bridge gaps and create the working capital solutions of the future.
Stay current with the latest payments insights from Visa Navigate CEMEA - subscribe today.
All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.
12023 – 2024 Growth Corporates Working Capital Index, Visa
22023 – 2024 Growth Corporates Working Capital Index, Visa
32023 – 2024 Growth Corporates Working Capital Index, Visa
42023 – 2024 Growth Corporates Working Capital Index, Visa
52023 – 2024 Growth Corporates Working Capital Index, Visa
Share Feedback