MasterCard Bets On Basware as E-Invoicing and Network Partner


Yesterday MasterCard and Basware announced a new global partnership focused on linking MasterCard’s global payment network with Basware’s e-invoicing customers and supplier network. Here are some of the highlights from the press release:

“MasterCard and Basware will  … [provide] a single global payment solution to guarantee that suppliers receive payment fast upon invoice approval, while lengthening payment terms for buyers. The e-payment service is enabled by the Basware Commerce Network, which is connected to the MasterCard global payment network and leverages MasterCard’s unique suite of payments products.”

“Basware's Commerce Network already processes over 50 million invoices annually, totaling more than US$420 billion across 900,000 trading partners in 100 countries. This scope and reach is combined with MasterCard's international payment network covering over 150 currencies across more than 210 countries and 20,000 financial institutions.”

Spend Matters received a briefing from MasterCard and Basware on the announcement and partnership last week. It was a curious and fruitful discussion, because the superficial level of detail contained in the press release and accompanying presentation that were sent ahead of time said little about how the two would work together. And it did not begin to do justice to what is really happening behind the scenes of the two partners in terms of their overall vision for the relationship, the exceptional nature of the solution fit, product integration and planning, and joint go-to-market strategy, in addition to the serious due diligence it appears MasterCard did with Basware before entering into the partnership.

Hany Fam, President of Global Strategic Alliances at MasterCard, shared some useful details on the vision behind the two providers. It is, in fact, far closer and perhaps even more reaching than what Ariba and Discover are working on from an integrated supplier and payment network perspective, compared with the largely bank/financing source + application + network approach of many of the other relationships in the market. Take for example what OB10 originally was up to with American Express before the Tungsten news. At the very core of this relationship will be MasterCard’s commerce and payment plumbing sitting alongside Basware’s e-invoicing capabilities (and data) and network.

In explaining the relationship, Hany told Spend Matters: “In the past, most bank/finance and P2P partnerships relied on financial relationships in this space that attempted to make financing capital available as the primary focus. In contrast, we are talking about using the network and functional and treasury assets of MasterCard to make this partnership effectively – all of it. We are not displacing any financial institutions but rather attempting to make transactions that much more likely with this partnership. Our aim is nothing short of effectively having a payment solution that is workable and effective for every stratum of buyer and supplier on the network in close partnership with Basware."

While Basware and MasterCard did not yet want to share the technical integration details of the partnership, they did offer some further insights into the relationship during the discussion:

  • Spend Matters has learned that Basware is MasterCard's global partner in the P2P and supplier network space.
  • MasterCard noted that the partnership will be a two-way one. It will take Basware into its corporate relationships and “approach large ecosystems in the financial and commercial banking worlds to provide integrated solutions to companies.”
  • The two providers will pursue vertical and industry specific opportunities based on areas of strength and market share today (e.g., automotive).
  • Through its network and integration with Basware, MasterCard will have full visibility into “the status of invoices” and when an invoice is “undisputable” after it has been approved to pay.
  • Financing rates and APRs will be based on geography, buyer credit ratings, supplier related elements, and other factors, but MasterCard and Basware have noted they “are not in the process to talk about extending credit.” Rather, their “goal is to enable speed and visibility to our partners which can allow dynamic approaches to govern payments and visibility through the integrated aspects of the partner solutions.”
  • In short, MasterCard’s goal is to “take risk out of payments – creating certainty” through the partnership; they will be able to do this based on the visibility that the Basware platform and network can provide into invoice, related document (e.g., PO, receipts, ASNs), and payment details. MasterCard will leverage similar technology and architecture to what it has done to enable real-time payments and visibility in such industries as the travel sector.

Stay tuned for additional analysis of the Basware/MasterCard relationship on Spend Matters Plus/PRO in the coming weeks.

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