Mastercard has introduced Open Finance Business Solutions to assist Australian SMEs in their expansion by facilitating secure real-time data sharing.
Motivation and Context
A recent report from the Productivity Commission suggests that a mature data-sharing system could result in substantial economic gains, with potential for up to USD 10 billion in annual benefits. Mastercard’s move aligns with the Government’s updated Consumer Data Right framework, prioritizing small business cases in areas such as accounting, lending, and payments.
Addressing SME Challenges
A significant portion of Australian SMEs face difficulties related to cash flow management, limited credit access, and complex onboarding and compliance processes. Mastercard’s new solution aims to ease these challenges by enhancing customer onboarding, enabling smarter payment methods, providing automated insights, and promoting fairer lending.
Mastercard’s Approach
By becoming an Accredited Data Recipient at the unrestricted level, Mastercard leverages the Business Consumer Disclosure Consent (BCDC) platform to help businesses in Australia access Open Banking. The BCDC model streamlines the onboarding process and removes barriers for business participation.
This service is integrated with Mastercard’s global network, connecting partners with banks across the region. This collaboration forms the basis of Mastercard’s Open Finance Business Solutions, designed to provide significant benefits to SMEs through a growing ecosystem of partners, delivering tailored solutions based on local business needs.
Benefits for Australian Small Businesses
Australian SMEs will benefit from increased access to funding as lenders can assess the financial health of businesses using real-time consented banking data. Additionally, Mastercard’s platform optimizes the management of business finances by offering secure and timely access to bank transaction details, which can be seamlessly integrated into accounting platforms.
The solution supports more efficient business payments and loyalty programs through real-time bank account verification and transaction aggregation. This simplifies merchant onboarding processes while also integrating with compliance measures, facilitating easier AML and KYB requirements for businesses looking to scale.
