Mastercard introduced its new near-real-time cross-border product, Mastercard Move Commercial Payments, this week. Although Mastercard didn’t mention its longstanding credit card rival in its announcement, the product clearly has the goal of taking on Visa’s B2B Connect.
Mastercard Move, unveiled at the annual Sibos conference in Beijing, is touted as a way for banks to facilitate near-real-time, predictable, and transparent commercial cross-border payments. The offering aims to simplify operations, optimize liquidity, reduce counterparty risk, and provide end-to-end visibility for banks and their customers. The program is the newest part of the Mastercard Move portfolio of money transfer capabilities.
“We’re primarily looking at trade and treasury payments, not wholesale or the smaller B2B FX payments we do in Mastercard Move already,” Alan Marquard, Executive Vice President, Global Head of Transfer Solutions at Mastercard, told Forbes. “This is really aimed at trade flows, principally in the major currencies in which those happen.”
Visa’s B2B Connect has been offering similar cross-border commercial services for some time now. The efforts are ways for the two credit card giants to compete for cross-border business with networks like Swift and SEPA.
“The card companies aren’t going to sit around and watch the instant payments networks chip away at their revenue,” said Albert Bodine, Director of Commercial & Enterprise Payments at Javelin Strategy & Research. “They are well positioned to disrupt the legacy correspondent banking network for cross-border payments.”
Seeking Advantages
Mastercard Move Commercial Payments processes payments in near real-time, unlike the instant payments promised by other networks. But the payments on these rails are revocable for the sender, which is also unlike the instant payment networks. That could be an advantage for Mastercard.
More important, this is a market that seems poised for continued growth. Cross-border payments have been growing at double-digit rates, according to data from McKinsey.
More than half of global consumers have made instant cross-border payments for goods and services, and approximately 63% of consumers have used instant payment systems to send funds across borders to friends and family. Instant payments are also a prime candidate for cross-border payments, which often face issues with slow settlement times, regulatory hurdles, and fraud.
