Mastercard and Pay4You Launch European Spend Management Partnership

Mastercard has teamed with self-service payment portal Pay4You on a spend management solution for European companies.

The collaboration, announced Monday (July 7), employs Mastercard’s Virtual Card Network (VCN) technology, and is designed to guarantee card acceptance, giving corporations a better way to manage their tail spend.

“Tail spend refers to the portion of a company’s expenditures that are not actively managed by procurement,” Mastercard said in a news release. “It typically accounts for 20% of a company’s total spend, including high-volume, low-value transactions that are often overlooked but can represent a significant portion of the total number of transactions.”

By melding Pay4You’s platform with Mastercard’s virtual card technology, companies can lower costs, increase process efficiencies and remain compliant while offering employees a better user experience, the release said.

In addition, the companies say their partnership will help issuers realize new flows on cards that are normally account-to-account (A2A) payments.

“This partnership supports Mastercard’s mission to drive innovation and efficiency in the payments ecosystem,” the release added. “Pay4You will also leverage Mastercard’s latest advances in embedded VCN technology which enables frictionless and simplified on-boarding among banks, platforms, and corporates, to accelerate the adoption of virtual cards.”

The companies are teaming up at a time when many businesses still use outdated methods for their B2B processes, as shown by research from the PYMNTS Intelligence tracker, “Virtual Mobility: How Mobile Virtual Cards Elevate B2B Payments,” done in collaboration with WEX.

As noted here last month, this research spotlights the urgent need for companies to pivot away from legacy payment systems, such as paper checks, which were cited as substantial drains on time and financial resources.

“These outdated methods frequently lead to delays and errors that disrupt everyday operations and compromise cash flow, posing critical challenges, particularly in an uncertain economic climate,” PYMNTS wrote.

The report argues that these inefficiencies require companies to take on excessive staffing and help lead to transaction errors, highlighting a pervasive issue across the corporate landscape. To smooth these roadblocks, the report advocated for virtual cards and mobile wallets as solutions, providing improved security, automation and cash flow visibility.

In addition, the research found that virtual cards “can deliver security, efficiency and return on investment (ROI) to B2B payments, enabling companies to streamline accounts payable (AP) processes, bolster fraud protection and unlock lucrative supplier rebates that drive business growth and improve cash flow,” PYMNTS wrote.