Mastercard using AI to enable instant B2B payments

Mastercard's global business-to-business payments network, launched more than two years ago, has added the ability for businesses to pay suppliers instantly via virtual cards.

Mastercard Track Instant Pay uses machine learning to evaluate and approve supplier invoices that contain all necessary information, creating the option to reduce payment cycle times from 30 days or more to a single day, the card network said.

The move, the latest advancement for Mastercard Track Business Payment Service, could help relieve suppliers’ cash-flow crunches as the global supply chain sputters back to life following pandemic-induced disruptions.

“Track Instant Pay addresses the problem of suppliers waiting 40 to 60 days to get paid, because even with electronic payments it often takes buyers that long to manually match invoices with purchase orders before determining they’re good to pay,” Ron Shultz, Mastercard’s executive vice president of new payment flows for North America, said in an interview.

Mastercard was working on developing an instant supplier payment system before the pandemic hit, and COVID-19 intensified demand, Schultz said.

The new system relies on technology from Previse, a London-based company formed in 2016 that uses AI to score a corporate buyer’s likelihood to pay an invoice.

Through a combination of AI and machine learning, Track Instant Pay analyzes invoices and identifies those likely to be rejected, enabling the rest to be authorized the same day they’re received, Shultz said.

“Supplier payments are sent directly and securely to a supplier’s bank account via a Mastercard virtual card with no manual intervention,” he said.

Mastercard is one of many companies working to modernize B2B payments, many of them leveraging payment card rails.

One is CoreChain Technologies, a startup launched in New Haven, Connecticut in 2020, which is building a B2B payments network that uses blockchain technology.

“Our approach at CoreChain is to leverage digital assets like stablecoins to accomplish that settlement value exchange in real time, enabling the supplier to access those ‘good funds’ immediately, while simultaneously receiving reconciliation,” said Chris Aguas, CoreChain’s founder and CEO.

Aguas sees rising competition competing B2B payment networks.

“We believe the future will see the emergence of multiple networks of B2B payments in the coming years,” Aguas said, adding that only a handful will likely succeed at scale.