Streamlined payment system readied

Credit card giant MasterCard International and TradeCard, an online international trade payment services provider, are combining forces to offer business-to-business trading exchanges a payment and settlement service for major and minor domestic and international transactions, according to officials at the companies.

The joint effort will combine the compliance and “workflow engine” services of TradeCard with the purchasing card platform of MasterCard, said Kurt Cavano, chairman and CEO of the New York-based TradeCard, a hosted service that transfers payments between buyers and sellers via the Internet. The agreement marks a “pivotal point for TradeCard,” Cavano said. He also said that TradeCard foresees “a giant shift” among b-to-b exchanges away from the manual processes now in use.

Offering few specifics, the companies will conduct pilot testing of transactions via b-to-b exchanges during the fourth quarter of this year. The duo expects to launch the service early next year. “We have had conversations with a number of exchanges,” Cavano said, declining to name which ones will take part in the pilots.

The forthcoming service will support XML and direct links to ERP (enterprise resource planning) platforms.

The combined card to come will widen the list of options that Purchase, N.Y.-based MasterCard can provide to its business customers, which already includes the WebPurchasing program, which is sponsored by Clarus, MasterCard, and Microsoft and is targeted at browser-based, corporate buyer purchasing, said Steve Abrams, senior vice president of corporate payment solutions at MasterCard. The new card will extend MasterCard’s financial service offering “to new heights” in terms of the dollar amount that it will represent and will incorporate the services of TradeCard, particularly access to its discounted cargo insurance, freight forwarders, and its transaction-tracking service. “We’ll be able to facilitate superlarge transactions,” Abrams said. “How we facilitate settlement will be described at the time of the pilots.”

Working together, the two companies will be able to offer customers a new view into MasterCard’s “global repository” of transaction data, Abrams said. “We’re hoping to be able to integrate TradeCard transactions … so that corporations will have access to all of their transactions,” he said. The two companies are in the process of creating relationships with third-party systems integrators that will work with exchanges to help provide support for the new payment system.

The new service will not require that b-to-b buyers and sellers have prearranged banking relationships, but they will have to be members of TradeCard, Cavano said.