This referenced news release should come as no real surprise for those who follow commercial payments, especially if you have been reading postings on PaymentsJournal for awhile now, since we commented on the original announcement back in late 2019. Now, we have the next step in the process for expanding services related to Mastercard Track beyond the initial trade platform that addressed identity and compliance. This announcement is about the official commercial launch of the Mastercard Track Business Payment Service.
‘This launch brings improved efficiency and working capital management to Buyers and Suppliers of all sizes, which is necessary in the current economic environment more than ever. Track Business Payment Service enables Buyers and Suppliers to manage their payments more efficiently – resulting in better outcomes for both parties. Suppliers can systemically manage how they get paid for different invoices for different Buyers. Buyers can optimize and automate efficiencies in paying Suppliers with improved reconciliation to manage cash flow and capture early payment discounts.’
So the logical question is what does this new service do and where does it fit in the ecosystem? Essentially, the service is a digital platform using API-driven architecture for the exchange of information between counterparties in commercial trade transactions. The Business Payment Service facilitates better payments choices and easier reconciliation to satisfy needs for both buyers and suppliers. If fits where banks and other third party service providers wish to utilize it in the their respective cash cycle product offerings.
In order to gain a bit more insight, we managed to have a word with James Anderson, executive vice president of Global Commercial Products at Mastercard. Mr. Anderson shared that the new service will be marketed through partners mentioned in the press release as well as Mastercard’s traditional bank distribution network. This initial launch in the U.S.A. offers card payments, with ACH and real-time payments rails following on in the near future. When asked about the true value of the service for these third party providers, Mr. Anderson indicated that scaling up their own products and services for a broader global base is a major benefit.
One of the key features of the Business Payment Service is the ability to draw upon both buyer and supplier preferences for situational payments, thereby utilizing a combination of data and analytics to provide intelligent payments choices according to variable circumstances. There is also a provision of rich data for reconciliation purposes on both sides of the transaction. Mr. Anderson was clear that a great deal of Mastercard’s thinking in developing the Business Payment Services was done through the lens of suppliers, a shift from the traditional buyer-centric solutions approach.
“What we’re building with our partners is a fully digitalized and extremely efficient way for businesses to pay and get paid using multiple payment rails so that Buyers and Suppliers each capture new and demonstrable value from their payments activity,” Anderson said. “It gives businesses a way to maintain control, manage cash flow better and be more operationally efficient – all things that are incredibly important for companies navigating today’s economic challenges.”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group