Many corporations that provide goods and services seek to contract out nonessential duties such as

• Credit/administration
• Transaction processing
• Billing
• Debt collection

• Enhanced cash flow
• Reduced collections management costs
• Increased sales opportunities
• Stronger financial statements, thanks to debt reduction
• Improved customer loyalty
• Predictability of in-bound cash
• Facilitates bank account
reconciliation

In order for the buyer to benefit from participating in this program, he/she should receive

The Bank and Distributor work jointly to determine the best way to control risk

• The distributor retains credit risk and guarantees payment to its issuer

– Parameters for issuing based on the distributor’s guidelines
– Use restricted to product only
– The distributor often requests different price structures, such as lower discount rate


• The bank assumes the risk

– Uses traditional risk analysis to determine creditworthiness
– Can be used to purchase products that do not pertain to the distributor


• Bank and distributor share the risk

– The issuer decides which buyers will be granted credit
– The distributor guarantees credit to all others

• Risk contracted with third parties

– Contract or sell to an insurance or reinsurance company

View transaction information using MasterCard Smart Data OnLine™, an online information control and reporting application.

Access complete customer information to

• Monitor the program
• Examine and improve operations
• Generate customized informative items, reports, and exports
• Schedule production
• Manage inventory
• Generate sales