This week, an announcement was made regarding a partnership between Mastercard, The Clearing House (TCH), PNC Bank, and ERP systems provider, Rutherford and Associates to launch a Payment on Delivery product.
Here’s a quick overview of Payment on Delivery from the announcement:
With Payment on Delivery, suppliers receive instant access to funds and rich information associated with the transaction, leading to better insights into cash flow. Both buyers and suppliers can improve operational efficiency through easy reconciliation and can eliminate any risk that comes from carrying or storing cash or checks.
Payment on Delivery is part of the Mastercard Track portfolio of business applications, which taps into real-time payment messaging capabilities so that the suppliers’ bank can push a “request-for-payment” directly to the business, and the business can pay immediately – on delivery – with instant reconciliation on the backend. Mastercard plans to partner with ERP providers and banks to expand distribution and adoption of this solution in the U.S.
The first use case where this capability is featured is with wine and spirits distributors. As a regulated beverage, deliveries of liquor often require a payment first before the product can be unloaded from the delivery truck. This takes time to find the business owner, supply the appropriate paperwork, and have them provide payment, which is often in the form of a check.
The rollout of Payment on Delivery takes all the paperwork out of the transaction, provides more data about the transaction for the businesses’ record keeping, and conducts the transaction in real-time through TCH’s RTP platform.
While Mastercard is providing the application, it is interesting to note that in the entire press release, card payments are never mentioned.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
