Mastercard plans to reduce the friction of payments between large companies and suppliers in the United Kingdom (UK) by introducing a new business-to-business (B2B) service.
Mastercard has partnered with HSBC to launch its business-to-business (B2B) service known as Mastercard Track Card to Account Transfers in the United Kingdom.
The service enables businesses to use their commercial card programme to make payments to any supplier, regardless of whether they accept card payments. It enables businesses to manage cash flow, eliminate manual work and expand payment options, as suppliers usually receive card payments directly to their bank accounts.
HSBC becomes one of the first issuers to introduce B2B service to the UK
HSBC is one of the first issuers to offer Mastercard Track Card to Account Transfer to its business customers in early 2022. The bank’s customers can use this service to reduce payment friction and manage risks more effectively.
Kelly Devine, division president of Mastercard UK and Ireland said, “Mastercard is focused on putting an end to the operational and financial challenges created by inefficient processes in B2B payments. With the new Mastercard Track Card to Account Transfer solution, we are offering even more choices to banks in how they provide and adapt value-added services to their business customers”.
“In these difficult times, it’s critically important for businesses to have flexible and dependable payment options for smooth cash flow throughout the supply chain,” Devine said.
Brian Tomkins, global head of commercial cards at HSBC said, “This enhancement is a further step forward in the convergence of B2B cards and traditional payments. Mastercard Track Card to Account transfer combines the security and working capital benefits of HSBC’s virtual cards with real-time payments”.
“We’re allowing our customers to make early payments while utilising the credit terms on their underlying card account for extended days to pay. A number of customers are already benefiting from the service and we expect to see continued growth in this space with more Mastercard Track ecosystem use-cases to come.”
Nearly two-thirds of suppliers witnessed increased payment times from large businesses and 50,000 small businesses closed due to this reason
According to Mastercard, the average payment times for large companies to pay the suppliers has increased to over 37 days during the pandemic, while the number of invoices that are paid later than 60 days reached a four-year high.
As a result, 62% of small businesses either witnessed an increase in late payments or their payments were frozen completely. This can have a huge impact on the ability of businesses to survive in the market. The Federation of Small Businesses (FSB) estimated that 50,000 small businesses close each year due to delays in payments.
The new card-to-account transfer service is integrated within the Mastercard Track suite of products and services to enable businesses to reduce complexity and risks and minimise costs. The new service allows customers and banks to offer a working capital solution that provides greater efficiency in cash flow and accounts payable processes.