The rather tepid pace of change as it relates to mobile adoption in North America for commercial cards has finally started to reverse and pick up some momentum. We have been discussing this lagging expectation for several years, most recently in the commercial cards forecast report earlier this year.
Once again the ongoing pandemic has driven increased demand for a touchless experience at the POS. This release was picked up at businesswire and announces the collaboration between Mastercard, TSYS (part of Worldpay) and Extend, the New York based-startup specializing in digital payments infrastructure and virtual cards.
‘The new mobile virtual card solution addresses the growing demand for digital, contactless commercial payments, which has been amplified by the changing nature of work and business expenses during the pandemic, and the rise of the work-from-home economy. Previously, one of the main barriers to wider adoption of virtual cards has been the inability to load them into a mobile wallet for use at physical point-of-sale terminals. With this new solution, employees or contractors can load their virtual corporate card into their mobile wallet to easily initiate contactless payments with their mobile device.’
So this announcement comes on the heels of another network partnership announcement that highlighted several modular digital B2B payment system enhancements, with mobile being one. As we also know however, there are two sides to every coin. So as one side of mobile commercial card usage, issuing, is becoming widely available, another side, the point-of-sale, remains a bit confused, as is neatly summarized in this posting.
Once that works itself out over x period of time (which should be on an accelerated path as well), it is likely to replace the vast majority of physical plastics, although contactless cards will likely persist, although more so on the consumer side. The virtual card also provides more safety and control than issuance of physical cards, with additional utility among contract labor and non-frequent travelers, etc.
“‘This solution provides a more secure, reliable product that will help financial institutions and businesses streamline B2B payments by increasing their flexibility to pre-approve and manage transactions on a much more granular level than before,” said Gaylon Jowers, president, TSYS Issuer Solutions and senior executive vice president, Global Payments. “From new employee onboarding to last minute or first-time travels, our unique ability to tokenize the virtual account number, combined with the technology and innovation of Extend and Mastercard, opens up a multitude of new use cases for virtual cards in corporate payments.”
“Over the last several years we’ve seen a tremendous uptick in virtual card interest across the industry, but until now, they were irrelevant for in-store purchases,” said Andrew Jamison, CEO, Extend. “This partnership with TSYS and Mastercard has really eliminated the last thing holding virtual cards back from fully penetrating the market and showing us how much potential they really have.’”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
