As tech companies such as PayPal, Alphabet and Apple were announcing new initiatives with regards to peer-to-peer payment services, Visa and Mastercard were focusing on business-to-business payment services, an area which is more lucrative and much larger. Earlier in the month both companies announced new platforms for business-to-business payments with a view to capturing a larger market share.
Mastercard’s platform, which is known as Mastercard B2B Hub, was developed in collaboration with AvidExchange, a firm which specializes in automating payment and invoicing procedures. Currently, AvidExchange boasts of approximately 5,500 customers in North America.
$124 trillion market
Speaking during an industry event, Hund-Mejean said that Mastercard’s B2B Hub will be aimed at small and medium-sized businesses and will be flexible to suit the needs of various customers.
“[The platform allows] medium-sized companies to digitally take an invoice and pay it through various means. So this is not just card payments. This can be check. This can be ACH. This can be card,”said Hund-Mejean.
Automated Clearing House
Mastercard recently acquired VocaLink and this gave the company its own ACH payment rails. Available in about 50 of the world’s most economically developed nations, the ACH electronic payment network handles approximately half of the entire payment volume. Though payments made through ACH can take a couple of days to process, through VocaLink payments can happen within minutes via what is known as Fast ACH.
A few days after the launch of the B2B Hub, Visa Inc also launched its own platform for business-to-business payments that is known as Visa Ready Program for Business Solutions. Visa’s platform allows for collaboration with other payment and financial technology firms.
According to the president of Visa Inc, Ryan McInerney, some of the most lucrative opportunities in the business-to-business payments space includes the area of corporate travel. At the moment making, complying and reconciling travel payments is chaotic. To solve the problem Visa developed a virtual card that is single-use and which can only be presented for authorized purchases at authorized vendors. Since there is deep integration of the payments, reconciliation across the entire spending of a corporation is easy. Visa has also development a solution where payments are automated after electronic invoices have been presented.