Mastercard Incorporated MA recently collaborated with BMO Financial Group, a financial services provider, and Moneris Solutions Corporation, a payment solutions provider. Through the partnership with the two Canada-based companies, MA’s innovative solution called Mastercard Track Business Payment Service can be availed by Canadian business clients from early 2022.
Shares of Mastercard gained 0.7% on Jan 14.
Mastercard Track, which will be the first-of-its-kind open-loop commercial solution in Canada, intends to simplify and accelerate the processing and managing of business-to-business (B2B) payments. If executed rapidly and at lower costs, such payments are a boon for organizations. Thus, the solution aims to overcome the complexities prevailing amid B2B payments via automating processes and reducing costs for customers.
In addition to enhancing B2B payments, the innovative service of Mastercard first commercially launched in 2020 promotes the hassle-free exchange of payments-related information between buyers and suppliers. Additional benefits for buyers include enhanced working capital, effective utilization of resources and strong relationships with suppliers. Meanwhile, suppliers can exert greater control over payments, improve cash flow management and bolster operational efficiencies as a result of the latest tie-up.
Initiatives similar to the latest one reinforce Mastercard’s sincere efforts to address the evolving landscape of the global B2B payments market. In view of a rapidly growing digital economy, the transformation of business models and integration of automation across the business payment ecosystem has gained utmost priority. Mastercard has been striving to capitalize on the prevailing scenario on the back of its innovative Mastercard Track solution. BMO and Moneris seem to be apt partners for complementing MA’s endeavor as both share the mutual aim of bolstering the efficiency of B2B payments.
The latest tie-up comes at an opportune time. Mastercard has been committed to addressing the headwinds currently prevailing in the payment processes, which have been troubling Canadian businesses for quite some time, through collaborations. This is quite evident from the recent partnerships. The processes are often subject to tedious manual reconciliation work. Per a small business study conducted by MA, 40% of the country’s businesses stated that they have been grappling with cash flow issues stemming from delayed payments, and sluggish processing times for cash and checks. Late payments impact businesses and the COVID-19 pandemic-induced volatilities have further aggravated the scenario.
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. In August 2021, MA partnered with the leading digital procurement software platform Penny Software for launching the Mastercard Track Business Payment Service across Saudi Arabia and the greater Middle East and North Africa (MENA) region.
Similar to Mastercard, other companies such as The Western Union Company WU, Visa Inc. V and American Express Company AXP have also resorted to either launch B2B platforms or collaborated 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 over 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. For complementing its endeavor, V has either resorted to launching innovative digital solutions for replacing age-old processes or else 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 15.1% in a year against the industry’s decline of 14%.
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MA currently has a Zacks Rank #4 (Sell).
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Shares of Visa and American Express have gained 6.5% and 37.9%, respectively, in a year. Western Union stock has lost 16.1% in the same time frame.
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