MasterCard International, Purchase, N.Y., has teamed up with Xign Corporation, Pleasanton, Calif., to make it easier for companies to stop paying by check. The platform integrates MasterCard's Corporate Payment Solutions into the Xign Payment Services Network, or XPSN.
MasterCard member banks can participate as resellers of the combined platform, integrating it with existing systems. "Many of our banks in the last five years have developed their own technology solutions," said Phil Philliou, vice president, eCommerce and Emerging Technologies, MasterCard. Systems for escrow and trade finance could transmit data and payments through the MasterCard-Xign solution.
Xign's XPSN aims to link together the supply chains of trading partners. "They have a platform that brings the buyers and the suppliers together into one place," said Shari Krikorian, director, eCommerce and Emerging Technologies, MasterCard. "Buyers and suppliers don't have to make any changes to their existing back-end systems; they're able to communicate, collaborate and exchange documents using this platform."
If a buying organization creates a purchase order, the Xign system will extract it from the buyer's ERP system and send it over to the supplier. "The supplier looks at the purchase order, flips it into a corresponding invoice, and then sends the goods and the invoice back into the Xign system, where the buyer can ultimately approve it," said Krikorian. Pre-established "tolerance rules" for buyer approval help the buyer to focus only on those invoices requiring additional examination.
Sending payment information through the MasterCard-Xign system opens up additional opportunities for process improvement. Suppose the buyer sends either a MasterCard card number, ACH routing number, or MasterCard RPPS data along with a purchase order. "The supplier is no longer billing the buyer at this point, but advising the buyer of the fact that they've shipped these goods- and here's a receipt," said Krikorian.
However, the buyer's payment remains conditional until the supplier's shipment can be verified against the original purchase order.
The net result for users of the system is that information about the invoice remains closely linked to the information about the transaction. "We can now guarantee 'level 3' invoice data with each and every transaction, because we combined that invoice data with the actual credit card data," said Philliou.
Banks also stand to benefit. "We believe this is going to reinvigorate our members' purchasing card programs," said Philliou. "It's going to make it easier to pay with card by wrapping it up in these EIPP platforms."