- Key insights: Mastercard has rolled out advanced B2B analytics, which allows the card network to ingest accounts payable data from a business and present it back to that business to make working capital more efficient.
- What's at stake: AI is being embedded in every corner of the payments ecosystem, including supplier payments, which is one of the biggest pain points for large corporations. Mastercard estimates that the total addressable B2B payments opportunity is around $80 trillion.
- Forward look: The card network will eventually roll out the product for accounts receivable payments, after first focusing on accounts payable use cases.
MIAMI — Mastercard is embedding artificial intelligence into supplier payment analytics to help businesses get a better picture of accounts payable.
The payment network at Sibos Monday rolled out Advanced B2B Analytics at, a card acceptance analytics platform that helps businesses find more efficient ways to pay their suppliers. Johannesburg, South Africa-based Absa Group and UAE-based Emirates NBD are among the first financial institutions to offer the product to its customers.
"We believe there's an $80 trillion opportunity to help corporates and small businesses re-engineer the way payments are made today between buyers and suppliers," Marc Pettican, Mastercard EVP of Global Corporate Solutions, told American Banker at the conference.
"If you look at most account payable and account receivable departments, you'll be met with a mountain of paper, huge reconciliation challenges, significant working capital challenges, and cash flow challenges for both buyer and supplier," Pettican said. "Data is one of the things that really fuels a change that's needed in the industry, and it is giving corporates visibility of data that can help inform the decisions between the buyers and suppliers."
For example, the platform can help Mastercard's customers identify their own clients that accept credit card payments, and then move those supplier payments away from traditional rails such as checks, ACH or cash to the card.
"If they move [the supplier payment] to a card product, they generate a working capital benefit, and therefore that becomes very powerful from a buyer's perspective," Pettican said. "It's also very attractive to the supplier because the supplier potentially can get paid earlier than the terms that they're accepting." Invoices typically carry a 30- 60- or 90-day term.
Mastercard is also exploring how to incorporate the platform into businesses accounts receivable workflows, according to Pettican.
The idea is that Mastercard will be able to provide insights on how often a company chases payments it is owed or if it has bad debt from one of its customers.
"Consistently,when we talk to suppliers, over 30% payments just don't hit the terms that [suppliers] afforded, and they get no benefit when [the payment] turns up late," Pettican said.
According to Mastercard, about 71% of suppliers face working capital challenges, and 96% of its customers believe AI is going to play a role in changing the way they operate their AP/AR businesses.
One of AI's core benefits is payment routing, according to Aaron McPherson, principal at AFM Consulting.
"One of the advantages of card [payments] is that it has this whole structure for disputing a transaction that you don't have with a wire," McPherson told American Banker. "That's one reason why people might want to use it besides the delay and settlement."
