Embedded finance is finding another major use case as payment companies look beyond traditional banking services. Rather than focusing on consumers, the latest effort targets businesses that move goods around the world every day. Visa and Airwallex believe bringing financial services directly into logistics software could remove long-standing payment bottlenecks.
Embedded finance expansion
Visa (NYSE: V) and financial technology firm Airwallex have partnered to expand embedded finance into the freight industry. The companies plan to integrate payment and financial services directly into logistics software, helping businesses simplify cross-border transactions, improve cash flow and access working capital more easily.
Visa is contributing its expertise in commercial payments and risk management, while Airwallex is providing its embedded finance platform and cross-border payment technology. The partnership also expands their existing B2B payments relationship and could pave the way for similar fintech solutions in other industries.
Tackling payment friction
Although logistics has embraced digital technology, payment processes have often remained slow and fragmented. According to Visa and Airwallex, payments take an average of 42 days to reach the invoicing company, while manual processing and administrative work account for nearly 20% of transportation costs.
Alessandro Figueroa, Visa’s Head of New Verticals & Partnerships, said many freight businesses still rely on inefficient payment systems. He believes combining Visa’s commercial payments expertise with Airwallex’s technology will help platforms simplify payments, improve working capital and deliver greater value to customers.
Airwallex also sees the partnership as an opportunity to speed up access to capital. General Manager Christos Chamberlain noted that money tied up while cross-border payments clear could instead fund the next shipment. He added that the collaboration could also pave the way for similar embedded finance solutions in other complex business sectors.
