CareCredit - Women's Health April 2024

Mastercard Teams With 4thWave to Tap a $7 Trillion Payments Market


Mastercard teamed with Banking-as-a-Service (BaaS) provider 4thWave to streamline B2B payment flows.

The partnership targets businesses in Europe, the Middle East and Africa (EMEA), as well as Asia, according to a Tuesday (Jan. 9) press release. It will use 4thWave’s supply chain finance platform for managing B2B payments to help Mastercard’s commercial customers.

“Around 72% of organizations experience strained vendor relationships due to inefficient invoice and payment processing, leading to sub-optimal supplier relationships,” the companies said in the release. “Mastercard is creating a paradigm shift in the B2B payments landscape, putting an end to the operational and financial challenges shaped by inefficient processes and multiple varying point-of-origin payment systems.”

The collaboration is designed to bolster Mastercard’s In Control for Commercial Payments (ICCP), a tool that helps to streamline B2B payments and uses “unique, dynamically generated virtual account numbers to make payments to suppliers” more secure and flexible, per the release. In addition, Mastercard’s straight-through processing (STP) will help increase virtual card account acceptance to deliver money for transactions to suppliers’ bank accounts.

The commercial payments market in the EMEA and Asia regions represents a $7 trillion opportunity, with B2B account payables and receivables making up more than 85% of these flows, the release said.

PYMNTS looked at some of the challenges of modernizing the B2B payments process earlier this month, noting that the traditional choices between building or buying solutions or launching a partnership, were seeing a paradigm shift.

“Historically, building custom solutions was seen as a way to maintain control over the entire payment process,” PYMMTS wrote. “However, the complexities of embedded finance and AI-driven systems often require expertise that might be outside a company’s core competencies.”

At the same time, buying prebuilt solutions can provide a faster route to modernization, but it may lead to less flexibility and customization. Off-the-shelf solutions may not completely align with a B2B company’s unique needs and processes.

“That’s in part why within the current landscape, strategic partnerships are gaining prominence,” the report said. “By collaborating with FinTech firms and technology providers, B2B players can leverage external expertise, access cutting-edge solutions, and stay agile in the face of rapid technological advancements.”

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