While nearly 60 percent of business-to-consumer (B2C) payments have migrated to eCommerce over the past decade, over 70 percent of business-to-business (B2B) payments are still made with paper checks. Numerous obstacles impeded the penetration of B2B ePayments, but now a new generation of the corporate purchase card—an unheralded concept dating back to the early 1990s—will overcome many of these obstacles. While corporate purchase cards are almost 20 years old, the technology behind these cards underwent a dramatic overhaul.
Today’s commercial markets demand a faster response to change than ever before. It is clear that great opportunity lies in the rapid growth of complex global supply chains. Global eCommerce has made it easier for buyers to source the products and services they need to make their businesses competitive and keep them growing. However, one of the biggest obstacles to further streamlining the supply chain is payment. Both buyers and suppliers seek faster, lower-risk, automated methods to make and receive payment.
This is why an unheralded approach that was introduced into the B2B payment ecosystem in the early 1990s—the corporate purchase card—is now emerging as a catalyst for eCommerce growth. The technology behind these cards, which are not really cards at all, has undergone a dramatic overhaul with next-generation purchase cards, offering the type of fast and secure electronic payment that businesses have long been searching for. As a result, purchase cards are now poised to move from a purchase mechanism for miscellaneous supplies, travel and entertainment to comprehensive procurement devices.
This paper discusses new developments in corporate purchase cards and shows why they are emerging as a viable alternative to conventional B2B payments. It highlights innovations in the new MasterCard ® Payment Gateway (MPG), which was successfully piloted and launched with the help of First Data experience with B2B initiatives and purchase cards, while showcasing the benefits for buyers, suppliers and other stakeholders in the B2B value chain. There is, however, one potentially troublesome pothole on this road to better, faster B2B payment: chargebacks. But before we look into that, let’s first see how this new generation of purchase cards is benefiting both buyers and suppliers.