Virtual cards continue to gain traction in commercial payments, and it’s no surprise. As corporate card products grow more popular, virtual cards provide enhanced security and greater control, without compromising the familiarity of making a credit card payment. The technology has been particularly valuable for corporate leaders who need to retain management over the ways employees spend company cash.
But there is often one major drawback: Actually using the virtual card in a remote setting can be a challenge, as support for virtual cards to be loaded onto a mobile wallet is not ubiquitous.
On Monday (Nov. 30), Mastercard announced a new virtual card offering for corporate clients that aims to address this pain point, as more remotely-working employees require mobile-friendly ways to make payments on behalf of their organizations. The new functionality is powered by partners TSYS and Extend, where virtual cards are generated upon the TSYS platform and then linked into the Extend app for mobile wallet use.
Speaking with PYMNTS, Mastercard’s Adam Jones, senior vice president of travel and expense (T&E), said the current payments landscape is primed for a mobile wallet-friendly virtual commercial card solution. Mastercard has seen “significant growth” in contactless payment volume, he noted, with contactless payments now accounting for about 40 percent of all in-person Mastercard transactions this year.
“You start to see cardholders expecting to be able to pay digitally,” he said. “It becomes part of the cultural expectation. And if you marry that within the commercial space, there’s exactly the same expectation.”
Retaining Control – Remotely
Certainly, the global pandemic has accelerated the expansion of corporates’ expectations for digital payments, with work-from-home requirements positioning employees to require ways to make purchases without needing to physically be handed a plastic card. The virtual, mobile nature of Mastercard’s newest offering is also key for professionals who wouldn’t normally have access to a physical company card – for instance, contractors, or individuals coming in for an interview – with COVID-19 further intensifying the need for contactless solutions.
“The COVID-19 pandemic has accelerated the demand for contactless, digital payment options, including among commercial and business card users,” said Scot Yarbrough, senior vice president, TSYS Issuer Solutions. “However, for years businesses have sought to create a more seamless, secure and controlled experience around corporate card issuance and spending.”
While those digital features are valuable for the individuals actually making purchases, virtual cards also provide a significant value proposition to controllers in charge of managing employee spend, said Jones.
These managers have historically acted as the centralized point of control to provide physical cards for workers who need to make purchases. As Jones noted, that role is evolving to meet the more sophisticated needs of not just handing an employee a card, but actually retaining oversight of how that card is used.
Virtual cards‘ ability to land in a user’s mobile wallet immediately – and also to implement control over how much is spent, with whom and when – is particularly valuable for these managers, especially those who need digital solutions to oversee employee spend in a remote setting.
“They can understand from a trip-level, or an expense-level, exactly what is required on behalf of the contractor or the employee and the corporation,” he said. “They’re therefore able to create a payment journey that best fits the requirement of that transaction.”
Transparency And Security
While consumers’ increasing use of mobile and contactless payments has undoubtedly influenced corporates’ adoption of these technologies, igniting change in payment behavior can often be far more challenging in a corporate setting than at the individual consumer level.
One of the biggest roadblocks to igniting change lies in corporates’ elevated security requirements. Not only do managers need to retain control over how employees are spending company money, but they have also traditionally faced the challenge of making sure physical cards don’t fall into the wrong hands.
On this front, virtual cards offer another important value proposition for corporates.
“Powered by TSYS’s virtual payment solution, businesses can now provide corporate card users with greater access through mobile payment options accepted at more locations, while at the same time asserting more control through on-demand and single-use expense authorization,” said Yarbough. “Consumers have come to accept and expect enhanced payment experiences through digital innovation – and now business card users can too.”
Mastercard is wielding its Digital Enablement Service for its new mobile virtual card solution, which tokenizes virtual card numbers (VCNs) and renders them useless in case a hacker or malicious actor obtains the information.
That tokenization is critical to businesses’ adoption of virtual cards, according to Jones. When driving any shift in business payment behavior, not only must solutions be seamless and easy to use, but they must also be secure.
The ability to marry convenience with security is the sweet spot of commercial payments – and one in which mobile virtual cards are finding ample opportunity to gain traction within the enterprise.
“With the simplification of the issuance process, those controls are put in place inherently with a virtual card. And then you bring that into a physical interaction whereby I can use that mobile option at a physical point of sale, and I’m able to pull together those needs for frictionless engagement,” Jones said. “If you can do that in a manner that is fast to adopt, simple to understand and intuitive for the card user as well as the administrator, it will ensure that you satisfy their requirements and achieve expedient use of the program.”