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Mastercard (MA) Unveils Solution to Speed Up Supplier Payments

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Mastercard Incorporated (MA - Free Report) recently introduced an innovative virtual card solution Mastercard Track Instant Pay to ensure accelerated and seamless business payments, thereby benefiting buyers and suppliers. Powered by MA’s open-loop business-to-business (B2B) network (Mastercard Track Business Payment Service), the recently launched solution can be availed across the United States and has plans for further international expansion.

Shares of Mastercard have lost 4% in the last couple of days, replicating declines in broader markets.

Coming back to the latest move, Mastercard Track Instant Pay is the latest addition to MA’s extensive portfolio of B2B products and services. The recently introduced solution is devised through integrating Previse’s (one of the leading artificial intelligence and data science companies) machine learning capabilities with the core commercial solutions and globally stretched payment network of Mastercard.

Consequently, the solution utilizes advanced machine learning and straight-through processing to automate business processes. Automating the otherwise time-consuming manual processes can be of great help to buyers, as it reduces costs, saves time and results in better management of working capital. Mastercard Track Instant Pay does not deprive suppliers of the benefits as well. The machine learning technology can evaluate invoices and detect those that are not likely to get approved. As a result, the remaining invoices can be processed for accelerated payments to suppliers. Meanwhile, straight-through processing ensures digital payments reach a supplier’s bank account directly and safely through a Mastercard virtual card and devoid of any manual intervention.

Initiatives similar to the latest one highlight MA’s sincere efforts to bolster its B2B products and services portfolio. Concurrently, it intends to address and modernize the evolving landscape of the global B2B payments market. In view of a rapidly growing digital economy, integration of automation across the business payment ecosystem has gained immense importance. Mastercard remains focused on capitalizing on the prevailing scenario. Its cutting-edge Mastercard Track solution launched back in 2018 is likely to complement the endeavor amid the dire demand for a solution that strives to offer increased choice and efficiencies to buyers and suppliers.

Such moves undertaken on the part of MA seem time opportune as delayed and inefficient payment processes continue to trouble businesses in the form of cash flow issues along with consumption of more time and costs. Consequently, businesses remain inclined toward availing of solutions that can automate supplier payments via virtual cards.  Research conducted by Mercator Advisory Group (published on MA’s website) found that 90% of virtual card transactions continue to be manually processed, which indicates existing solutions failing to address the dire business needs.

Mastercard has been partnering with several organizations and rolling out cost-effective solutions for benefiting the worldwide B2B payments space. The technology company in the global payments industry has been investing heavily in the B2B payments space and real-time payments functionality. At the beginning of 2022, MA joined forces with BMO and Moneris in a bid to launch Mastercard’s innovative payment service across Canada and thus modernize the country’s B2B payments landscape.

Similar to Mastercard, other companies such as The Western Union Company (WU - Free Report) , Visa Inc. (V - Free Report) and American Express Company (AXP - Free Report) have resorted to either launching B2B platforms or collaborating with renowned financial service providers for easing payments.

Western Union boasts of a robust B2B payments platform. WU keeps on pursuing collaborations with several global financial service providers with an aim to boost its platform and offer enhanced management of international payments on the back of its expansive worldwide network spanning across more than 200 countries and territories. In September 2021, Western Union collaborated with Japan’s KYODAI Remittance in a bid to offer enhanced B2B cross-border payments to corporate clients.

Visa has been making every effort to expand its reach across the vast B2B payment market. To complement its endeavor, V has either resorted to launching innovative digital solutions for replacing age-old processes or pursuing collaborations with several financial institutions. Visa B2B Connect delivers innovative B2B cross-border payments and keeps on adding partners to its network.

American Express joined forces with Goldman Sachs in October 2021 for offering a cloud-based payments solution to large corporate clients, who will be empowered to manage multiple payment platforms and thus result in seamless B2B payments. AXP continues to pursue a host of measures focused on technology upgradations, the introduction of secured digital solutions and assisting businesses in regulating payments.

Shares of Mastercard have gained 6.6% in a year against the industry’s decline of 23.5%. MA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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American Express stock has gained 46.4% in a year. Shares of Visa and Western Union have lost 1.8% and 22.6%, respectively, in the same time frame.

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