Marqeta seeks new business customers with Mastercard B2B solution

The news: API issuer-processor Marqeta integrated Mastercard’s Track Instant Pay solution to streamline B2B payments for its customers, per a press release.

Here’s how it works: Mastercard Track Instant Pay uses machine learning to identify invoices that are likely to be rejected so the rest can be approved for payment without manual intervention.

Mastercard uses straight-through processing to send approved invoices directly to the supplier’s bank account via a Mastercard virtual card—letting suppliers and buyers avoid exchanging bank account information.

Why it’s worth watching: Accounts payable (AP) and accounts receivable (AR) automation is replacing some manual B2B payment processes—here’s why.

  • B2B payments are digitizing. The share of B2B payments made with cash and checks is dwindling as more businesses adopt cards, ACH, and wire transfers to pay their suppliers. Cash and check payments are expected to compose 40.4% of total B2B payments in 2022. Next year, that figure will drop to 38.2%, per Insider Intelligence forecasts.
  • AP/AR processes are a top-of-mind concern for businesses. US small-business decision-makers agreed that AR (41%) and AP (37%) were the financial operations most in need of updating, per data. Existing systems often require manual approval and third-party involvement, which can be time-consuming.
  • Payment providers want to lower the barriers to AP/AR automation. Perceived costs, integration concerns, and other sticking points are keeping small businesses from automating their AP/AR systems. Payment companies can help allay these concerns by educating businesses on the benefits of AP/AR automation and ensuring seamless integration with businesses’ existing management systems.

The opportunity: Helping businesses improve their operating efficiency with Mastercard’s solution can help Marqeta attract more customers.

During its Q3 earnings call, Marqeta CEO Jason Gardner revealed that Block—the firm’s biggest client—had about 18 months left on its contract. With Block looking to offer new banking services for its customers, it’s unclear whether it will renew. This makes it more important than ever for Marqeta to attract new business, which its tie-up with Mastercard can help accomplish.

Related content: Check out our Accounts Payable and Receivable Automation spotlight report to learn more about how tech like machine learning is transforming AP/AR processes.

This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.