MasterCard Forms Payments Partnership with Basware
MasterCard and Finnish software company Basware Oyj are partnering on a business-to-business (B2B) invoicing system that allows suppliers to get paid early, while buyers enjoy extended payment terms.
“The solution makes the payment stream more predictable,” said Basware chief executive officer (CEO) Esa Tihilae. “There’s a potential to make a good business out of this.”
The product, named Basware Pay, seeks to reduce late payments and company cash hoarding. According to a survey by the two companies more than half of international businesses have actively delayed payments to suppliers in the past 12 months,
Basware, which competes with SAP’s Ariba unit, reported that the transaction volume of its global buyer-supplier network grow by 29% in the second quarter of 2014 as electronic invoicing (e-invoicing) continued to pick up pace.
The new system offers individual transaction tracking and profiling, which suppliers can then provide to underwriters for financing, according to Hany Fam, who oversees strategic partnerships at MasterCard. Underwriters, such as banks, may finance the transactions through MasterCard’s payment system, which is connected to Basware’s network.
“Suddenly, the world opens up in terms of funding sources,” said Fam. “No one has managed to crack this globally with one single unified solution that works the same way across the globe. That’s what we’re doing. The upside opportunity is massive, in fact it’s bigger than the upside in the consumer business.”
The new system, using MasterCard’s transaction-processing architecture, further develops the two companies’ cooperation. The initial deal was announced last year to provide MasterCard-acquired financing for Basware invoices.