This release in businesswire announces a new service to be incorporated into the Mastercard Track Business Payment Service, the open loop network launched a couple of years back. We have been following developments for the network, which started in 2017-2018 as an information sharing network for trade between buyers and suppliers but has been adding capabilities (and users) for the past two years. In this latest development, the service has added the capability to automatically issue virtual cards against invoices.
‘Slow and inefficient payment processes continue to create challenges for businesses. Lengthy payment terms and late invoice payments impact cash flow for suppliers, while manual invoice approval and check processing is costly and time consuming for buyers. Other payment methods, like ACH, require buyers to safeguard sensitive bank account information, adding another layer of complexity. Research shows a growing demand from businesses to automate supplier payments with virtual cards, but existing solutions aren’t meeting these needs, with 90% of virtual card transactions still being processed manually.’
Although we have not yet received a briefing, it seems as though the new capability allows for the automated intelligent review of invoices, during which a decision is made (using machine learning algorithms) as to whether or not a virtual card should be issued for payment and settlement. This of course presupposes that the supplier has been set up for a buyer-initiated card scenario, which then allows for straight-through processing of the payment, which should be the goal of any receivables department. So it will be interesting to hear about adoption, since most virtual cards are still initiated by the supplier using CNP terminals. So this should be a popular feature, assuming the up front supplier acceptance flow is easily implemented.
‘“Delayed payments create significant challenges for businesses financially and operationally, especially in today’s environment,” said Ron Shultz, executive vice president, New Payment Flows, North America at Mastercard. “Track Instant Pay helps solve these pain points by enabling buyers and suppliers to automate their manual payment processes, unlocking valuable time, working capital and choice. This innovative new solution is the latest step in our ongoing commitment to support multiple payment rails and mission to modernize B2B payments.”…
Mastercard Track Instant Pay combines machine learning capabilities from Previse, an artificial intelligence and data science company, with Mastercard’s core commercial solutions and global payment network to transform how businesses send and receive payments. The solution is part of Mastercard’s comprehensive suite of B2B products and services designed to reduce complexity and risk, cut costs, and automate processes for businesses around the world.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
