MasterCard’s New B2B Trade Platform

September 17, 2018

In partnership with Microsoft, MasterCard has just announced a new B2B digital platform designed to simplify global trade for small businesses. The platform, called MasterCard Track, is powered by Microsoft Azure. It works by connecting suppliers and buyers with lenders and other networks.

MasterCard pointed out that while digitalization has played a major role in other areas of the business-to-business industry, transactions, administration, and expenses are still inefficient. Despite the innovation seen in consumer payments over the last 5 years, the global business-to-business market remains mostly on paper. Administrative costs have reached $500 billion, according to MasterCard Track, and $58 trillion in transactions, or nearly half the value of business-to-business transactions, are done on paper.

MasterCard Track has an initial partnership with nine business-to-business networks and procure-to-pay providers. Starting in 2019, customers of the organizations can maintain, exchange, and retrieve important information about themselves and trading partners through the platform’s Track Trade Directory, a secure repository.

MasterCard Track’s nine partner networks include Invalua, Jaggaer, Basware, BirchStreet, Coupa, Liaison Technologies, Tungsten Network, Tradeshift, and the Infor GT Nexus Commerce Network.

Each network specializes in a specific vertical in specific levels of services. Currently, suppliers must use several platforms to reach different buyers. By connecting these networks into a single platform, Track will facilitate easier communication for buyers and suppliers.

The goal of the system is streamlining B2B transactions for every small business. Suppliers only need to enter company information once with the ability to monitor cash flow across several networks. Buyers can spend less time finding and verifying suppliers. MasterCard Track will connect all types of payments, including bank transfers, card-based payments, and account-based payments within the platform and link invoice and purchase order information.

The first capabilities of Track when it launches will focus on payment management and compliance to expand to the point that banks can provide financing products to a small business or supplier using the platform. Track notes that it takes a small business an average of 16 days to onboard a new supplier. With Track, a business can instantly search for a supplier, receive a report on the supplier’s credit rating, and get other valuable information at once to streamline the process.

The next phase of development of Track will allow banks, technology providers, and insurance companies to extend value-added services on the platform. MasterCard has partnered with Barclays and Citi to explore this financing capability. Before the feature is rolled out, companies must build up a history on the platform that banks can use to assess risk and credit behavior. Once fully integrated, banks will be able to review a company’s transaction record and when they get paid for faster, easier financing on invoices.

Banks are expected to begin offering financing via Track within 12-18 months but insurance companies will likely offer services earlier.

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