Mastercard is bringing together nine business-to-business networks and procure-to-pay solution providers to roll out a new global trade platform, which will help firms manage their supply chains, payments, compliance and working capital.
Mastercard Track, which is set to go live in early 2019, will also be “blockchain ready”.
The first capabilities will be around compliance and payment management, with the intention to expand so that banks can offer financing products to firms that use the platform.
Speaking to GTR, Carlos Menendez, president of enterprise partnerships at MasterCard, describes Mastercard Track as a “one-stop shop” for firms to manage their accounts receivables across multiple networks. The nine partner networks include Basware, Birchstreet, Coupa, the Infor GT Nexus Commerce Network, Ivalua, Jaggaer, Liaison Technologies, Tradeshift and Tungsten Network.
Mastercard Track will essentially connect these existing networks, which are typically buyer-centric, into one platform. This will be of particular benefit to suppliers around the world, which today have to use multiple platforms for different buyers.
“If you are a supplier managing many networks, it can be complicated,” Menendez says. “There is clearly a need, because these networks specialise in certain verticals, in certain levels of services. We’re just a top layer that facilitates the communication to the benefit of the buyer and supplier.”
The nine networks will, in turn, be able to extend Track’s capabilities to their customers.
Mastercard Track forms part of Mastercard’s continued expansion into the B2B space: it sees great opportunities in modernising a market that is still highly inefficient and paper-based. The firm estimates that US$58tn-worth of global business transactions are still done on paper.
Menendez says the launch is “one significant step” in the firm’s expansion journey following the acquisition of Vocalink, a payments firm, in 2017, with “more to come”.
One of the main features will be the Track Trade Directory, which is aimed at giving firms and financial institutions better access to compliance information and making the screening and onboarding of suppliers more efficient. The central directory will provide a permissioned repository of over 150 million company registrations globally and integrate feeds from more than 500 compliance lists. Users will be able to maintain, retrieve and exchange key information relating to themselves and their trading partners.
“We are supplementing existing know your customer systems,” Menendez explains, noting that it generally takes an average of 16 days for a business to onboard a new supplier.
“Track will be a place where you can instantly search, and get a report on the person’s credit rating, or on politically connected people, and then have that information at one time,” he adds.
Another feature is around payments management, giving a view of all payments, purchase orders and invoice information. This way, suppliers will get better visibility into cash flow – when they can expect to get paid and what amounts – across their various networks.
Bringing banks onboard
As a next step in the development, Track will also enable banks, insurance companies and technology providers to extend value-added services, such as trade and supply chain finance, to businesses on the platform.
Mastercard has already partnered with Citi and Barclays to explore a financing capability, and is currently in negotiations with a range of other interested banks.
Menendez says that while Mastercard is currently developing this functionality, it will only be rolled out over time, as firms first need to build up a history on the platform – which banks can then use to better understand credit behaviour and risk.
“Right now, when suppliers want to get a loan, they provide information to an individual bank and it can be time consuming and complicated,” he says. “On Track, the interested company will be able to say, ‘here’s the record of my transactions and when I get paid’, so our partner banks will be able to come in and offer financing much easier on a particular invoice.”
He expects to see banks provide financing via the platform within the first 12-15 months, but foresees that insurance firms will start to offer services much earlier than that.
One of Mastercard Track’s first insurance partners is Aon Cyber Solutions. According to its CEO Jason Hogg, Aon will be “designing value-added services for Track users, including offering insurance solutions to protect against losses associated with B2B transactions, and harnessing our data and analytics services across the Track platform”.
The platform has also been integrated as a module in Singapore’s National Trade Platform, an initiative that will digitise the city state’s trading system and will go live early next year.
Finally, Menendez says the platform can integrate with blockchain solutions as they emerge and mature.
“We are forming connectivity across what already exists, leveraging existing connectivity between buyers and suppliers and networks today,” he explains. “As they build blockchain, those will be embedded too. Track is blockchain ready, and as solutions that can offer value-added service come up, we will plug them into the platform.”