The Master(Card) Strikes Back

Mastercard, The avenging P-card, which quietly has second place marketshare to Visa -- at least by my numbers, which are a couple of years old -- is making a big investment in building a more complete P-to-P offering (with an emphasis on the latter P) with its latest partnership with Ariba. Just announced this morning, the deal brings Mastercard and Ariba together to "connect enhanced transaction data from the MasterCard global data repository with Ariba Supplier Network, resulting in integration of purchasing and corporate card programs available for companies."

I'll give my version of what the deal means in a second, but if you want the PR spin, here it is: "By combining enhanced data from the MasterCard global data repository with Ariba Supplier Network, companies will be able to eliminate many of the inefficiencies commonly associated with invoice reconciliation and expense reporting, streamline reconciliation and accounts payable processing, improve control over maverick spending, and enhance overall policy compliance."

To summarize my version of the deal, once implemented, it sounds to me like it will allow companies to tighten the loop between procurement and AP by feeding Mastercard level 3 data -- which if it is complete, should include such fields as the purchase amount, date, merchant category code, quantities, product codes, descriptions, sales tax amount, customer code (for accounting), order number, and zip codes / freight / duty (if necessary) -- into the ASN. What this means in practice is that it will allow companies using both a Mastercard P-Card solution and the Ariba ASN to get item level detail into expenses. For procurement teams wanting to more aggressively tackle T&E expense categories, this type of information is critical.

From what they've told me – again, I've not demoed the actual solution yet -- the offering will flag exceptions in real-time with alerts and notifications to enable transaction process visibility. In addition, the card details will be automatically routed into the Ariba Analysis package -- for those who have it -- to enable aggregation by supplier to identify category T&E partners to drive better sourcing strategies. And by enriching the reporting with additional field spend information such as hotel folio data and tax information, companies will gain a better perspective into total cost and category spend breakdowns.

All in all, I must say it is deals like this which get me excited in today's market. T&E is a huge opportunity (as Amex and Rearden know as well). But MasterCard, as a silent giant in the P-Card space with 32% marketshare (to Amex's 28% and Visa's 40%), is not going to sit still and watch its bigger-sibling and acquisitive rival drive the day. Personally, I'm still waiting for the Centurion P-Card so I can impress my fellow bloggers with my larger spending limit in picking up bar tabs (after all, those bottles of Bells IPA and Duvel can add up). Call me superficial, but the plonk-factor is cool (even if I'll sacrifice reporting, analysis, and category strategy development on the backend).

- Jason Busch