In an effort to aid businesses in their payment mechanism, Mastercard Inc. (MA - Free Report) has announced a new business-to-business payments solution in the Asia Pacific. To this end, it launched Mastercard Track Card to Account Transfer, which will enable businesses to use commercial cards to pay their suppliers regardless of whether they accept card payments.
This new payment facility by Mastercard will help businesses manage cash flow and automate payments, thereby eliminating manual work and expanding payment options since suppliers can receive card payments from buyers directly in a bank account.
Mastercard Track by Mastercard was launched in 2018, which focuses on real-time data collection and faster payments to facilitate business-to-business (B2B) payment solution via its global suite of products and services. The various solutions provided by Mastercard Track are Mastercard Track Business Payment Service and Commercial Purchasing Card that address complex challenges for Suppliers and Buyers.
Per the company, Mastercard Track helps supplier and buyer partners tackle the systemic challenges of business-to-business payments, reinventing the way businesses send and receive funds so that B2B payments can keep pace with innovation and liberate enterprises from the inefficiencies throughout the system.
The company developed a robust B2B solution with the acquisitions of the U.K.-based automatic clearing house (ACH) company VocaLink in 2017 and the payment company Nets in 2019.
Mastercard Track is a program that aims at extending the company’s reach in the vast B2B payment market. Global B2B payments market value was $125 trillion in 2019. According to ResearchAndMarkets.com, the global digital B2B payments market has observed stable growth in the past few years and is further expected to see a rise at a staggering rate during the 2020-2024 forecast period.
Growth in the global digital B2B payments market will be bolstered by a host of drivers like expanding real-time payments, increasing adoption of cloud-based solutions, escalating smartphone penetration, the emerging B2B e-commerce industry, swelling business process automation, rising urbanization, growing cross-border payments, etc.
B2B business payments all the more gained a centrestage, given the financial and operational stress due to the sluggish business activities caused by the coronavirus outbreak. This, in turn, induced small businesses to suffer fund crunch associated with late payments and slow processing of cash and checks. At a time when solid liquidity is the need of the hour, a single payment delay is enough to topple the operations of small businesses. As a result, this glitch prompted many small-time players to turn to digital services for expediting their payment mechanism.
A Mastercard survey highlighted that owing to better speed, security and transparency, more than half (57%) of small business players are increasingly opting for digital services regarding their business-to-business (B2B) payments since the onset of the pandemic. Also, nearly two-thirds (64%) of small businesses are actively trying to dissuade clients from using cash and checks.
Another company Visa Inc. (V - Free Report) is also expanding its reach in the B2B market via its Visa B2B Connect, which is a non-card based payment network that enables seamless bank-to-bank, cross-border business transactions.
Year to date, Mastercard has gained 14.8% compared with the industry growth of 4.9%.
The stock carries a Zacks Rank #3 (Hold), currently. Some better-ranked stocks in the same space are Envestnet Inc. (ENV - Free Report) and Equifax Inc. (EFX - Free Report) , each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings of both Envestnet and Equifax surpassed estimates in the last reported quarter by 25.53% and 22.14%, respectively.
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