When it comes to digitizing business payments in the way that we’ve observed the digital transformation of retail — well, everyone talks about it.
Getting there, and rendering payments invisible, is another thing entirely.
Chad Wallace, two months into his new role as executive vice president of business solutions at Mastercard, told PYMNTS’ Karen Webster that there is significant low hanging fruit in business payments ripe for modernization — no matter if a firm is making a payment or receiving a payment.
For middle market firms, he said moving away from the legacy of paper checks and automated clearing house (ACH) payments can be done more adroitly through partnerships.
“We at Mastercard are focusing in 2022 and beyond on a couple of things — namely, the experience of the end corporate, where we create a solution for them that is distributed through one of our banking partners or one of our issuers. It’s a B2B2B model,” he said.
Beyond commercial products, the payments giant is leveraging various assets across the organization that can be packaged and delivered to those partner firms. Along the way, he said, technology can help buyers and suppliers “meet in the middle.”
Wallace said that by leveling the playing field between those two sides of the B2B equation, the parties can agree on discounts if buyers are going to pay early, for example. Along the way, they create buyer/supplier networks that get transactions done faster and more safely.
To better serve commercial clients, banks are more willing to partner with FinTechs — and vice versa — in ways that allow them to focus on their core competencies and add partners’ products and services to complement their overall existing suites.
At a high level, it’s become imperative to think about delivering corporate solutions wrapped in a consumer-like experience — and embedding new functionalities in as many corporate applications as possible to make payments an integral part of workflows. Payments, in other words, become invisible.
Some Technological Changes
That aspirational goal is getting closer to reality. The technological changes that have marked the last few years have been an enabler for Mastercard to integrate its own offerings into a range of financial institution (FI) and FinTech solutions.
Integrations are no longer file-based, Wallace told Webster — now they are rooted in application programming interfaces (APIs). He said those integrations, when done with speed and streamlined, create real-time insight into cash flow visibility and payment processing.
“And this, ultimately, gives peace of mind to the corporate, overall,” he said.
Offerings including Mastercard’s Track Instant Pay — a virtual card solution that can authorize immediate payments — can get suppliers paid instantly. The payment network’s own analytics improve supply chain dynamics and can determine whether suppliers can and will deliver goods at the quality and quality that has been agreed upon.
See also: Mastercard Launches Instant B2B Payments
Wallace noted that Mastercard Send can help companies move money across borders with greater efficiencies.
Leveling the Playing Field
Looking ahead, he said, there’s a confluence of rails that will continue to serve the B2B payments space, as real-time payments gain greater traction.
Buyer supplier networks (such as those recently introduced in the U.K.) will give suppliers flexibility to be paid in the ways businesses want across those rails and with net terms, he said, regardless of whether buyers choose card or non-card options on their own end of the transaction.
Wallace said the networks and rails can level the playing field between large buyers and smaller suppliers, or conversely, large suppliers and smaller buyers. Corporates are looking at how real-time data can help them make decisions, make payments more quickly and have finality that funds have settled with beneficiaries. Being able to do all that electronically gives these companies safety and security, he said.
As to the long term arc toward the consumerization of B2B payments, Wallace said: “We have a great experience where I can basically do everything I need to on my iPhone. Why can’t that be as easy in corporate America?
“It’s an evolution that has to happen over the next few years and in the various different tools that corporates use today.”