“Credit as a Service” debuted today from payments company MSTS to let online sellers provide their own branded lines of credit to buyers.

Payment and credit services provider MSTS today introduced a cloud-based service designed to let companies offer on-the-spot credit lines to online buyers that satisfy credit risk requirements.

MSTS, a subsidiary of World Fuel Services Corp., has operated for decades in the payment and credit services industry. It handles about $5 billion in volume and provides clients with credit underwriting and risk management services in more than 190 countries.

MSTS took its business to another level today with the launch of Credit as a Service, or CaaS, a cloud-based system that connects to credit rating services, payment networks and e-commerce platforms.

CaaS was designed to cost its client sellers between 1% and 1.75% of value per transaction, says president Brandon Spear. By comparison, credit cards typically charge transaction fees within a range 2% to 3%.

MSTS designed CaaS for companies involved in trucking fleet management, manufacturing, e-commerce, and retailers that sell to corporate clients.


“The most interesting space for us now is in the traditional retail space,” Spear says. Many merchants, particularly electronics retailers, who have long sold to individual consumers are branching out to sell to corporate buyers purchasing large quantities of computers or other equipment for large offices or hotel chains, he notes. Spear adds that the average transaction value for electronics clients is between $6,000 and $7000.

“But those new corporate customers are coming with expectations that, if they’re going to buy on a regular basis, they want some incentive—like volume discounts or extended payment terms,” Spear says.

Demand is strong for such payment services, experts say. “The demand is definitely there as enterprises everywhere increasingly pursue digitalization across all of their back-office processes,” says Gilles Ubaghs, senior analyst with research and advisory firm Aite Group.

MSTS, Ubaghs says, faces the challenge of ensuring that its technology holds up under heavy and long-term usage, “but they have a lot of experience here which should reassure the market.”


He adds, however, that MSTS will have to “move quickly to take advantage” of an investment cycle among companies that are modernizing their commerce capabilities and for whom the new CaaS service would be a good fit.

John Bruno, senior analyst for B2B e-commerce at Forrester Research Inc., says the new MSTS service could be particularly useful in certain areas, such as in providing new payment/credit services for business customers in physical stores or branches operated by distributors. It can also be useful in e-commerce platforms, he adds, but notes that the online world offers multiple alternatives in payment and credit services.

CaaS clients can set their risk management and credit terms to have the system offer credit lines typically of 60 or 90 days to buyers meeting those terms.

It takes MSTS about two weeks or more to set up a new client with CaaS, depending on the number of API integrations MSTS must complete to connect a client’s e-commerce site with payment systems, credit rating services and other systems. MSTS can also integrate CaaS to a merchant’s store point-of-sale system. An API, or application programming interface, is a set of software instructions for sharing data among disparate software systems.


MSTS wasn’t free to name companies signed up to start using CaaS. But its website lists as clients of its other services truck manufacturers Peterbilt and Kenworth, engine manufacturer Cummins Inc. and workwear manufacturer Red Wing Shoe Co.

The broader B2B payments market, meanwhile, is also changing, Ubaghs says. “Industry consolidation across payments is rife, and vendors and service providers of all types are increasingly focused simultaneously on end-to-end service capabilities, and the development of cloud-driven open API capabilities,” he says. “Growing numbers of vendors want to be able to do everything, and MSTS will need to stay dynamic to keep up with the broader market.”

Spear says it’s already working on building out CaaS. MSTS designed CaaS to work across currencies, languages, and regulatory requirements in dozens of countries. CaaS for now is available in 32 markets, including 22 in Europe, the United States, Canada, Mexico, Australia and New Zealand, Singapore and Hong Kong. Over the next few years, MSTS plans to nearly double that number, including new markets in Central and South America, the Mideast and Asia, Spear says.

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