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Citigroup Inc. this week further entrenched its relationship with MasterCard Worldwide by becoming the nation's second major bank to offer MasterCard Payment Gateway services to its business-to-business customers. Wells Fargo & Co. last year was the first to harness MasterCard's service, which streamlines electronic payments by automatically integrating them within corporate banking customers' existing accounts-payable systems (CardLine, 10/9/07). Rick Hanna, Citibank's global head of commercial cards, says its new service, dubbed Citibank Paylink for Cards, provides greater transparency of electronic B2B payments and reduces time-consuming steps for corporate clients. Shari Krikorian, MasterCard vice president, tells CardLine that, although Wells and Citi so far only are using the purchasing card function of the MasterCard Payment Gateway, the system is designed to enable users to integrate all types of electronic payments, including automated clearinghouse and wire payments, with the same ease. "We think many banks will eventually move toward centralizing all types of payments within one system," Krikorian says. American Express Co. and JP Morgan Chase & Co. each offer their own versions of centralized e-payment services for corporate customers. However, bank adoption of such centralized payment systems has been slower than expected, Susan Feinberg, a senior research director with TowerGroup, tells CardLine. "It's taken longer for banks to offer integrated-payment systems, and their use of them has been narrower than providers like MasterCard might have hoped," she says. "But overhauling internal payment systems doesn't happen overnight. For MasterCard, getting Citi to use its Payments Gateway is a big coup. Its next goal should be getting banks to integrate ACH payments alongside (purchasing card) payments."
