Mastercard takes next steps toward real-time bill pay

Mastercard is testing two new bill payment services, with an eye on improving speed for consumers and businesses.

The first initiative is called Payment on Delivery, which is a B2B service being piloted with PNC Bank, and is part of Mastercard’s Track portfolio of business applications. The service leverages the RTP network from The Clearing House for real-time payments clearing and settlements. The second initiative is the start of a pilot program for the consumer-facing Bill Pay Exchange serviced it announced in October 2018. It has since added 10 billers to Bill Pay Exchange.

“Some of the existing B2B payment mechanisms in use today in the U.S. are slow and inefficient for businesses to process on their payables and receivables. Payment on Delivery is a great example of solving an inefficient process,” said Ron Shultz, executive vice president of new payments flows for North America at Mastercard.

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In piloting Payment on Delivery, Mastercard will focus on industries with complex distribution networks and supply chains solving for several challenges including paperwork-intensive manual processes and complicated reconciliations due to the heavy use of cash and check.

Mastercard’s first pilot is planned to be live by the end of 2019 and will center on alcohol distribution with PNC Bank and ERP provider Rutherford. B2B invoices with be sent to businesses using the request for payment feature on the RTP network, which is expected to be a major driver according to The Clearing House. Once Mastercard is satisfied with the service's performance in the regulation-ridden wine and spirits distribution industry, it plans to expand into other verticals.

On the consumer front, Bill Pay Exchange has added Avidia Bank, Aliaswire and Transactics. These billers will roll out Bill Pay Exchange to their clients as a way to bring bill pay back to the banks.

“This will bring consumers back to the bank websites, which have lagged in investment over the past few years and improve the overall bill pay experience. Now it’s just ‘pay and pray’ that your payment makes it to the company and is credited correctly to your account,” Shultz said.

Bill Pay Exchange provides an automated biller set up, electronic bill presentment, choice of payment and transparency in the billing process (such as confirmation of when the payment is received).