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September 3, 2014

Mastercard, Basware aims to put an end to late business payments

Over half of businesses admit to having delayed payments to suppliers.

By Vinod

Mastercard has announced a new e-payments initiative as it looks to end the culture of companies being forced to pay suppliers late due to their inability to process payments quickly enough.

The company has partnered with payments solution provider Basware for the launch of Basware Pay, a solution that connects buyer and supplier payment processes faster than ever before, allowing suppliers to get paid early and buyers to enjoy extended payment terms.

Finnish company Basware originally announced it would be teaming up with Mastercard last year, originally to provide MasterCard-acquired financing for Basware invoices.

"More than ever, global businesses rely on a complex network of partners and suppliers, and the ability to interact with agility is key to taking advantage of a fast moving environment," said Hany Fam, President, MasterCard Enterprise Partnerships.

"Integrating invoicing and payments processes can take friction out of the system and boost the broader economy. Combining MasterCard’s global network and innovative technology with Basware’s industry-leading purchase-to-pay platform has the potential to enable transformative change."

The launch of Basware Pay comes with findings released by the company which found that over half (57%) of businesses admitted to having actively delayed payments to suppliers in the past 12 months, despite the vast majority (88%) saying that suppliers should be paid promptly.

The survey, which polled 1,000 decision makers across Australia, Europe and the US, also found that three quarters (74%) of companies see late payment as "a fact of business life" which will always happen, despite 90% acknowledging that payment delays have wider repercussions for businesses, such as the ability to pay staff or reduce investment.

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"When three quarters of businesses have more than 50 suppliers and about two thirds send and receive more than 100 invoices a month, a culture of late payments impacts individual organisations as well as the economy as a whole," said Esa Tihilä, Basware CEO.

"While a certain level of cash hoarding may be understandable given the financial climate, it also reflects inefficient processes and poor practices. Businesses have a responsibility to themselves and their supply chain to unlock value and keep money moving."

 

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