It’s been three years since Mastercard started its Send offering for card-based push payments. In the tech world, that’s a long time, but in the banking space, things can move a bit more slowly – which means Mastercard Send is still breaking into new use cases beyond its original intent. One key area that wasn’t on the road map three years ago? B2B.
Shari Krikorian, senior vice president at Mastercard Worldwide, told PYMNTS that Send started out with a consumer focus, powering person-to-person (P2P) push payments.
The program launched in response to marketplace demand for a product that could do exactly that. Yet as that demand morphed and expanded, said Krikorian, the company found that Send needed to do and be more – even if that meant straying from the original plan.
In a recent interview with PYMNTS, Krikorian explained why Mastercard decided to explore the B2B space, what use cases it has unlocked over the past three years and the potential growth ahead.
From P2P to B2B
At first, Mastercard’s focus with Send was on commercializing the network transaction to be able to push money to consumers. That capability took off in a few Eastern European markets, as well as a handful in Asia Pacific. Banks were connecting to the network and started offering P2P push payments.
In those early days, Krikorian said, Google was using Mastercard Send for wallet cash-outs and P2P transfers, while Allstate embraced the ability to send insurance payouts to its customers faster than ever. Send, she said, helped shape the appetite for real-time, card-based push payments that is now being seen across all of North America.
But as a P2P product, it had its shortcomings. It was Allstate, one of Send’s earliest customers, that asked the question that pushed the product into a whole new category: “Why can’t we use this solution to disburse emergency insurance claims?”
That fell outside the realm of P2P, but Krikorian said the company took a can-do approach to give the market what it wanted. She said Mastercard worked to adapt its rules and began to embrace additional use cases, keeping an open mind to other verticals it could serve.
Send always aimed to solve needs in the insurance space, both for the disburser and for the consumer. As it got into the B2B space, Mastercard added the ability to push funds to small businesses. For example, a large insurer can disburse funds to a small auto repair shop that has a Small Business debit card in order to pay out a claim directly for their insured customers.
It was Allstate, one of Mastercard's first Send customers, that first asked about the ability to deliver emergency insurance payouts faster. This creates value for the recipient by getting the payment into their bank account when they need it. With electronic payments, funds are delivered faster, more conveniently and more efficiently than a paper check, which also makes them more readily available to the business, Krikorian said.
But sometimes, insurance isn’t just about covering one person’s car accident or another’s flooded basement. There are emergency aid scenarios, such as natural disasters, in which many, large or repeated payouts must be delivered. For instance, Mastercard worked with the American Red Cross to enable Houston area residents and others affected by Hurricane Harvey last year to receive emergency aid payouts to facilitate cleanup and get communities back on their feet.
Since branching into this vertical, emergency insurance and emergency aid have become two of Send’s most significant use cases, Krikorian said.
Another of Send’s top use cases has been on-demand payroll. Today, this has an application in the gig economy – enabling, for example, drivers of ride-sharing services to collect payments as soon and as often as they want for a fee of 50 cents.
However, Krikorian said the greatest potential value is to the small and micro-businesses.
“On-demand payroll is big,” says Krikorian. “It reflects where the world is going in terms of freelance workers and 1099 workers.” She said that’s why Mastercard is working on rapid merchant settlement to enable small and very small businesses to instantly tap into their proceeds.
Consider an artist with her own business. To grow it, she will first need to be able to accept card payments in order to invite the greatest possible number of sales. A payment service provider will typically set up micro-businesses like this to accept card payments.
Then, say this artist has a booth at an art show one Friday. She sells several paintings throughout the day, accepting various types of cards. At the end of the day, rapid merchant settlement would enable her to collect her earnings immediately – and spend them just as quickly, if she needs to stock up on paint and canvas to work over the weekend.
Rapid merchant settlement would also support sending funds to SMB debit cards and bank accounts, Krikorian added, providing micro business owners with the same convenience enjoyed by consumers who can have funds pushed instantly to their bank accounts.
Krikorian said Send has grown from just looking at Mastercard’s own transactions on its own branded cards in a very specific use case, to enabling new use cases like disbursements and micro-loans.
The U.S. market was the next evolution, she said, and the company plans to do P2P, disbursements and a variety of other use cases in that market to provide a full-service value proposition to its customers to reach any consumer, not just those using Mastercard-branded products.
She said Mastercard is also working on growing and expanding Send in markets around the world to ignite card-based push payments.