Last week, MasterCard one of the largest payment networks in the world and Basware, a provider of procure-to-pay (P2P) and eInvoicing solutions announced a strategic partnership to bring to market a new electronic payment (ePayment) vehicle. Andrew Bartolini and I had the pleasure of speaking with Esa Tihila (CEO of Basware) and Hany Fam (President of Global Strategic Alliances at MasterCard) regarding this exciting announcement. As many of you may know, Basware has always been in the P2P space but like many others in this market, the “pay” part of the process was left out of the equation. Well, that just changed in a big way for Basware through this partnership. In fact, through Basware’s other partnership with BravoSolution, they will be able to deliver a full Source – to – Settle solution.
For an area that has traditionally lacked in innovation, there has been a fair amount of activity this year (e.g., Ariba and Discover). While the traditional forms of ePayment (ACH, card, wire) have been growing over the past few years, there is still an abundance of check payments in the market. New mechanisms for ePayments have been a long time coming and this particular partnership aims to change things up and deliver much needed innovation.
Just to provide some context of the potential opportunity that lies in front of these two companies, Basware’s network processes 50 million invoices annually, totaling more than US$420 billion across 900,000 trading partners in 100 countries. MasterCard’s international payment network covers over 150 currencies across more than 210 countries and approximately 20,000 financial institutions. The two companies intend to partner at a global level with deeply integrated capabilities/technologies. Another important differentiator is the fact that this is not another card offering, it is a business-to-business connection that leverages the MasterCard network and its clearing/settlement infrastructure with financial institutions. An infrastructure that will potentially be made available to corporations.
The suite of solutions that MasterCard and Basware will bring to market are aimed at all types of organizations from small businesses to large multinationals and will be focused on three main categories – transaction solutions, processing solutions and enhanced services. While the pricing structure still has to be finalized, it was made clear that the pricing is going to be aggressive. According to the two leaders, this partnership will be bringing patented and proprietary payment capabilities to market, for example, the ability to initiate single-use transaction numbers for each invoice, something that is not being done today.
Additionally, once the two companies have an integrated set of solutions available, third-party financial institutions (and possibly other solution/service providers) will have access to tools allowing them to leverage the real-time information on invoices and approvals. This will enable them to offer financial instruments and create further efficiency in the financial supply chain.
All in all, a very exciting partnership that we will certainly be keeping track off, expect to hear more on this over the next few months.
Looks like 2014 is shaping up to be a big year for B2B payments!
