The move from plastic to pixels may be a slow one. Changing consumer behavior is no easy feat, as we’ve seen with slow user adoption of Apple Pay at the register. Might technology close the gap between making a new payments method available and spurring people to use it?
In an interview with PYMNTS’ Karen Webster, Dave Matter, chief product officer at Marqeta, delved into the ways that the company is seeking to bring a mobile-first mentality to payments cards. As has been previously reported, the company said that developers would be able to use its network tokenization technology to make it easier to pay with Apple Pay.
Previously, users had to enter card details via cameras on their devices or were forced to manually enter card info. The embrace of instant issuance technology means that cards can be issued directly into a digital wallet, minimizing the steps needed to get the card into Apple Pay.
“We’ve expanded on the experience that people have with tokenization,” Dave Matter told PYMNTS. “Now, virtual cards can be immediately issued within an app. And those payment cards can be added to a digital wallet in real time.”
Matter said that developers are bringing the “concept of purchase financing at the point of sale” (POS) onto Marqeta’s platform. In this event, consumers would go to a store to buy a new TV, decide they want a loan to pay for it and fill out a simple loan application on their phones. As soon as the loan is approved, they can instantly get a virtual card in their digital wallet.
“So, by the time they get to the counter,” said Matter, “they simply tap and pay just like any other transaction” across existing technology already in place, from POS to apps to mobile devices.
This stands in stark juxtaposition to the clipboard and pen and arduous paper-based process in place with a traditional application to get a card and then subsequently buy the items. Not to mention, many consumers these days aren’t interested in traditional credit products.
For the big box merchants, financing solutions have traditionally been embedded deep in the terminal, which mandates a lot of integration, where complexity reigns and errors are common.
Today, with geolocation, a lender knows that you are headed into Best Buy, for example, and they can prompt you with a message or an offer such as, “If you are thinking about making a big purchase, consider using our application.’”
When Karen Webster asked about physical interaction between users, devices and terminals, Matter said that Marqeta’s aim is to reduce those touch points.
“Marqeta has a vision for a future of frictionless payments — the fewer steps a consumer or business has to take to make a payment, the better,” he said. “With tokenized cards instantly issued into digital wallets, we’ve simplified the process of making a payment. Marqeta supports tokenization and in-app provisioning for Apple Pay and Android Pay.”
From a merchant perspective, Marqeta is simplifying the path to sale — removing hurdles to completing a sale.”
Tokenization and instant issuance also have value beyond point-of-sale financing.
“Marqeta operates deeply in the on-demand delivery space,” said Matter, “and instant issuance may prove a boon to workers. When people sign up to be a courier with an on-demand delivery company like Instacart, for example, they fill out an application and then go through training to learn what to do and how to pay for the groceries or other items they’ll be delivering.
“The time between registering to be a courier on the app and then to hit the ground running can be reduced as soon as the courier is approved within the onboarding app — at that point, they’ll be able to start performing deliveries … immediately,” said Matter.
For example, an on-demand delivery company could issue a virtual card, push it to a digital wallet like Apple Pay and then train an individual by sending them to do a first order and pickup, via digital wallet transaction at Whole Foods. In this case, tokenization and instant issuance to digital wallets facilitates the onboarding process and simplifies payment to merchants. Matter said
“We also see instant issuance to digital wallets improving payouts to workers,” Matter said. “It’s a full circle of added value.”
By pushing digital payments to workers via tokenized cards and digital wallets, workers can be paid “more incrementally” as they perform tasks, via Marqeta’s DISBURSE solution. This faster, simpler payment method could lead to greater worker satisfaction and loyalty.
No payments conversation is complete without a discussion about fraud, and so Matter noted that the Marqeta Platform has powerful dynamic spend controls and even allows companies to decision transactions based on their own fraud rules and algorithms with Marqeta’s Just-in-Time “JIT” Funding feature. JIT Funding allows firms “to play a role in deciding whether or not to authorize a transaction — in fact, cards don’t even have any funds on them until the transaction is approved. Once the transaction is approved, funds are loaded ‘just in time.’” This can reduce fraud and errant spending, due to additional layers of authentication.
Looking out at the short-term road map for the company, Marqeta recently released Marqeta.js, which he noted is “the world’s first JavaScript library” for PCI-compliant virtual card presentment within web and mobile apps. Virtual cards need to be provisioned, he said, and all sensitive PCI data is still hosted securely.
“Marqeta is drastically reducing overhead tied to that data and making it easier for developers to integrate with virtual card technologies,” Matter said.
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