MasterCard Distribution Card

Addressing accounts receivables
Associating with a distributor
Distribution Channels
Benefits for the buyer
Controlling risk
Information control and reports

MasterCard Distribution offers a solution that electronically replaces cash and checks used by Retail-buyers for payment of merchandise to their Suppliers/Distributors. The solution offers the outsourcing of the accounts receivables and collection process by providing a payment instrument for buyers, whether card or virtual, with a flexible risk and settlement functionality.
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Many corporations that provide goods and services seek to contract out nonessential duties such as

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

Others are interested in providing their customers with new credit options in order to sell more. The MasterCard Distribution Card fills both needs. Also known as Reverse Purchase Card, Collections Card, or Supplier Card, this new product also offers the distributor the following benefits:

• 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

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The key objective is to streamline the accounts receivables process by improving the cash management process as well as strengthening the vendor relationships with key suppliers. These relationships may vary according to the distribution channels, as they could range from large corporate (B2B) relationships to small retailers buying from large suppliers (B2SME). These relationships will impact the value-add of the proposition.



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

• Enhanced product features
• Aligned purchase flow
• Payment terms similar to bank payment terms
• Seamless transaction (no need to reapply for granting of credit)
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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

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View transaction information using MasterCard Smart Data OnLineTM, 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

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