‘As participants in the credit card ecosystem, we need to stop fixating on and selling rebates and instead focus the working capital benefits of commercial cards,’ CPI panelist and Centime CEO BC Krishna said during a session on innovation
Commercial Payments International (CPI) recently held its annual Global Summit, featuring thought leaders from across the payments and commercial credit card landscape, and representing global firms from banking to accounting to consulting to fintech. Typically held in New York or London, the event was virtual this year due to the COVID pandemic — and as a result, video of the two days’ worth of sessions is available here.
Centime founder and CEO BC Krishna addressed the audience of payments, banking and fintech professionals on Tuesday as part of a panel titled “Innovation Case Studies,” which explored “a series of innovative use cases in B2B payments that have enabled companies to greatly improve their processes and reduce costs.” Co-moderated by Frank Martien of Windward Strategy and Patrick Diemer of Arthur D. Little, the session also included Eric Tak, global head at ING Payment Centre; Spencer Hanlon, global head of travel payments at Nium, and Dante Disparte, chief strategy officer and head of global policy at Circle.
Krishna spoke to the problems small and mid-sized businesses face in managing cash flow, the role of credit as a valuable form of working capital, and the reasons why trillions of dollars in already-issued commercial card credit go underutilized every year.
“Businesses obviously spend ahead of revenue. These are investments that they make — in people, in product development, in market development,” Krishna said. After that cash leaves their balance sheets, they develop products, sell to the market and receive cash from their customers, he continued. “There's always a lag between cash out and cash in. And this lag is what we call the cash flow gap.”
“The shorter the gap, the better it is; the longer it is, the more stress on cash. And today, what we find is that businesses routinely manage that cash flow gap,” Krishna said. If it turns out that slowing payables and speeding receivables “doesn't do the trick in terms of building a thriving, sustainable growing business, what they have to do is to tap into credit — not something that is foreign to all of you.”
“It's very clear that growing small and mid-sized businesses grapple with cash flow issues every day, seek to bridge those gaps and then struggle to gain cost-effective credit. I'd like to make the case that we, as an industry, as participants in the credit card ecosystem, need to stop fixating on and selling rebates and instead focus the value proposition of commercial cards — and cards in general — on the working capital benefits that businesses need, especially small and mid-sized businesses,” Krishna said.
Other panelists spoke to various aspects of commercial card usage, such as the more traditional T&E spend, as well as the “buy now, pay later” phenomenon and regulation that could be forthcoming in that area.
Krishna also is set to address CPI’s upcoming Middle Market Summit on Nov. 18 from 11-11:45am ET. The session, titled “‘Buy now, pay later’ products for the mid-market segment,” will explore:
- Tracking the development of buy-now-pay-later products in the mid-market space
- Understanding the role of BNPL in working capital flows for SMBs
- Innovating BNPL products from the consumer side into the B2B segment
For additional information on last week’s conference and its panelists and participants, visit the