TradeCard Inc. is teaming up with MasterCard International to beef up the payment and settlement services it offers U.S. business-to-business marketplaces.
The co-branded venture, announced Wednesday, will let companies that are plugged into participating marketplaces pay for purchases using MasterCard purchase cards or through an arrangement TradeCard has with Thomas Cook. Tracking of transaction settlements will occur through TradeCard's patented system.
Kurt Cavano, chairman of New York-based TradeCard, said, "We are taking the best of TradeCard's proven settlement and workflow technology and combining it with the existing purchase card brand and reach of MasterCard to produce a joint product that any company with any bank on any business-to-business exchange can use to settle a transaction."
The venture has yet to hook up with any marketplaces, but Mr. Cavano said the company is in negotiations with several, including Ventro Corp., a Mountain View, Calif., provider of business-to-business marketplaces for the science and medical industries. TradeCard and MasterCard will pilot the offering in the fourth quarter and formally introduce it in early 2001.
"For the first time our corporate customers will be able to conduct both domestic and international, large and small transactions to conduct true crossborder trading," said Steve Abrams, senior vice president of corporate payment solutions for MasterCard International.
The service will be marketed to MasterCard's purchasing card customers, which Mr. Abrams says make up 40% of the Fortune 500, as well as to business-to-business marketplaces and TradeCard's customers.
TradeCard and MasterCard are open to adding other payment providers and aim to link their technology to as many marketplaces as possible. "We want to get corporate customers to get on marketplaces and tell them they should have this solution," said Mr. Cavano.
The new venture joins a growing number of alliances seeking to fill a glaring void in emerging business-to-business marketplaces: the lack of electronic payment capabilities.
Wells Fargo & Co. and Citigroup Inc., for example, have teamed with three software companies to form FinancialSettlementMatrix.com, which will offer payment processing, letters of credit, global settlements, foreign exchange, and payments to business-to-business marketplaces' customers.
ABN Amro, Bank of America, FleetBoston Financial, U.S. Bancorp, BankServ, and American Express have allied with Ariba Inc. to let customers settle marketplace payment transactions with their banks.
TradeCard is building on an Internet letter of credit processing service it has sold so far to FleetBoston Financial, Comerica Bank, and several Asian banks.
"International trading capabilities are their core competency, and many marketplaces are looking to broaden into the international market," said Avivah Litan a research director at GartnerGroup.
Mr. Cavano said, "We did the hard stuff first and now we have the technology that supports large-dollar international and domestic trades."