Mastercard: Transforming Supply Chains with Embedded Finance

New research commissioned by Mastercard indicates that embedded finance is reshaping procurement and supply chain operations.

The study, which surveyed over 1,100 procurement leaders globally, shows how integrating financial services into non-financial business platforms is helping to address long-standing challenges from supplier collaboration and security to data-driven decision-making.

For supply chain leaders, this evolution could offer a path to greater efficiency and resilience.

Overcoming supply chain inefficiencies

A major hurdle for many organisations is a lack of clarity on the potential return on investment, with 47% of non-adopters citing "unclear value" as a barrier to embracing embedded finance. However, the Mastercard research suggests that current users are realising tangible benefits.

According to the data, adopters report improved visibility of cash flow (73%), cost savings (71%) and greater flexibility with working capital (69%). These benefits appear to increase with time, as long-term users of embedded finance report stronger outcomes in supplier relationships, process efficiency and security.

Manual workflows, particularly in reconciliation and reporting, remain a primary challenge for non-users. In contrast, adopters of embedded finance say the technology directly addresses this issue by cutting manual effort and improving accuracy, with 73% of users reporting benefits in both areas.

The integration of artificial intelligence is also set to deepen adoption, with 78% of buyers trusting AI-driven payment decisions, which can optimise timing and reduce human error.

Strengthening supplier relationships and collaboration

Supplier risk presents a challenge for 75% of purchasing organisations, and embedded finance could offer a direct solution. 84% of adopters state they have found improved cash flow management and stronger supplier relationships as a result of integrating payments into procurement platforms.

This is a critical component of supply chain stability, as a more financially secure supplier network is often a more reliable one, better equipped to manage production schedules and prevent delays. A further 73% of users report a better supplier experience overall.

The digitisation of payments, especially through tools like virtual cards, is a key part of this transformation. The research finds that most buyers, 74%, expect virtual cards virtual cards to represent at least a quarter of their transactions within three years.

These digital capabilities are particularly valuable for companies that handle high volumes of cross-border payments, a common feature of complex global supply chains that involves navigating fluctuating exchange rates. While non-adopters point to limited resources as a barrier, those who have integrated these systems report clear gains - 69% have noticed stronger collaboration between finance and procurement teams.

Bolstering security and regulatory compliance

Perceived risk continues to be a point of hesitation for non-users, with 63% citing trust and security concerns. Yet, users of embedded finance report stronger security outcomes and lower exposure to fraudulent activity, often through integrated features like tokenisation.

Almost three-quarters of adopters (74%) say embedded finance has been important in reducing risk of fraud for their organisation. For businesses with card programmes already in place, the reported improvements to compliance and fraud controls are even more pronounced.

This change towards digitised procurement and payment processes enhances compliance and visibility, helping purchasing organisations to keep pace with evolving regulations across different jurisdictions.

By automating and tracking transactions within a single system, businesses can generate more reliable data for audits and financial reporting. These improvements help free up procurement teams to focus on more strategic work, moving away from manual transaction management and toward higher-value activities like supplier negotiation and strategic sourcing.