MasterCard launched a small-business spending portal that mimics the capabilities of big-business expense systems.
The MasterCard Business Network charges $9 a month for the expense-management feature, though there is also a free version. The portal, which works with any MasterCard account, also provides discounts negotiated by Forrest City, Calf.-based Rearden Commerce.
"This is a product that enables small business and middle-sized companies to get the power of purchasing of large companies, to get the technology and automation that large companies enjoy," says Eugene DeSilva, a senior business leader in MasterCard's global commercial products group.
Without such a system, "these companies don't have the human resources, the technical resources and the capital to be able to leverage technology and automation," he says.
The network is in expanded beta, with mainstream launch by the fall, DeSilva says. MasterCard plans to offer an app for iPhone, Android and Blackberry handsets by the end of 2012. The smartphone app will be limited to the features that work best with smartphones, like alerts and approvals, but all features will be available for tablets, he says.
DeSilva says the network's features can be maximized in one business trip. Through the portal, a user can book travel and hotel reservations, and then use the system to email details to clients. After the trip, the portal lets the user enter expenses for reimbursement. If user needs to make an emergency purchase, such as to replace a stolen laptop, that purchase can be made through the portal.
MasterCard pays a licensing fee to Rearden, says Rearden vice president of product management Randy Reynolds. There is also a revenue-sharing arrangement in place, Reynolds says.
The portal provides discounts on 650,000 products, but none for travel and dining, Reynolds says.
The MasterCard Business Network appears to serve a demand in the increasingly competitive rewards program sector, says Aite Group senior analyst Nancy Atkinson.
"Small businesses have really been asking for and hoping to have a bit more of the card capabilities that larger businesses have," she says. "It looks like a lot of what the network provides will give them that, at least in terms of taking advantage of volume discounts and being able to set travel policies."
Banks are often unwilling to offer a commercial card to businesses with less than $10 million in annual revenue, she says. Commercial cards are "really where you tend to get those controls," she says.
"It's one thing to create travel policies, it's another thing to have a card that will help enforce those policies," Atkinson says. "On the corporate travel and expense side the cards can do that."