MasterCard Speeds Up Company Payments With Basware PartnershipKasper Viita
Basware Oyj and MasterCard Inc. will start selling a business-to-business invoicing system that allows suppliers to get paid early, while buyers enjoy extended payment terms.
“The solution makes the payment stream more predictable,” Basware Chief Executive Officer Esa Tihilae said by phone. “There’s a potential to make a good business out of this.”
The product, dubbed Basware Pay, seeks to reduce late payments and company cash hoarding. More than half of international businesses have actively delayed payments to suppliers in the past 12 months, according to a survey by the two companies. Espoo, Finland-based Basware, which competes with SAP SE’s Ariba unit, saw the the transaction volume of its global buyer-supplier network grow by 29 percent in the second quarter as electronic invoicing continues to pick up pace.
The new system offers individual transaction tracking and profiling, which suppliers can then provide to underwriters for financing, according to Hany Fam, who oversees strategic partnerships at MasterCard. Underwriters, such as banks, may finance the transactions through MasterCard’s payment system, which is connected to Basware’s network.
“Suddenly, the world opens up in terms of funding sources,” Fam said by phone. “No one has managed to crack this globally with one single unified solution that works the same way across the globe. That’s what we’re doing.”
The new system, utilizing MasterCard’s transaction-processing architecture, is a further step in the two companies’ cooperation. The initial deal was announced about a year ago to provide MasterCard-acquired financing for Basware invoices. The companies didn’t comment on the financial outlook offered by the new system or its customer pricing.
“The upside opportunity is massive, in fact it’s bigger than the upside in the consumer business,” Fam said.