Debit and credit cards. I think it’s fair to say most people give little consideration to their use beyond drawing on funds to spend with a merchant. It’s a simple, transactional relationship in every sense. But things are changing. A new wave of innovation is helping banks and fintechs overcome long-standing payments challenges and provide a greatly-improved, intuitive customer experience.
Indeed, Instant issuance, utilising virtual cards, is bringing tangible, life-enhancing benefits to businesses and consumers alike. Pushed into smartphone wallets, these cards are capable of exceeding traditional plastic card functionality in a range of ways to deliver a fresh approach to common situations, such as insurance claims and expenses management. Additionally, consumers often love the timesaving aspect of virtual cards, which have the ability to go live as soon as an account is approved, whilst businesses can benefit from cost savings and get to feel good about reducing their impact on the planet by doing away with plastic. It’s a genuine win-win proposition.
But what is instant issuance and how does it work?
Instant issuance allows users to complete face-to-face contactless transactions as well as make online and in-app purchases using mobile wallets such as Apple Pay and Google Pay. Like physical cards, virtual cards share an account number and sort code – and feature the long card number or 16-digit card number, expiry date and CVV. The key difference is the ability to withdraw cash from an ATM, which is perhaps less of a priority for people who aspire to live contactless lives. From a security perspective, virtual cardholders are protected by tokenization, which converts sensitive information into a unique token or digital ID that can be securely deployed into different devices or stored in the cloud.
How instant issuance is bringing unrivalled innovation to card programmes
To help illustrate how instant issuance represents the next phase of payment card innovation – taking us beyond simply issuing a conventional bank card, I’d like to walk you through three common life scenarios.
The first scenario is in the airport (coronavirus notwithstanding). In these tumultuous times, flight delays and cancellations are a fact of life. If you’re an airline operator, as part of your customer journey strategy you might want to provide a drink and a meal to passengers on a delayed flight – or a hotel if cancelled. By issuing a virtual card to these customers via their digital wallet, you remove the costs and inconvenience associated with vouchers and paperwork. This is a live solution operated by our partner Stranded Flight Solutions.
The second scenario considers the benefits of instant issuance to insurance providers. It might be holiday plans unravelling due to an illness that requires treatment in a foreign medical centre, or a car accident that leaves a policyholder stranded. Issuing a virtual card straight into a smartphone wallet, perhaps restricted to designated merchants, removes customer pain points such as the anxious experience of having to submit receipts to claim back costs.
Scenario three demonstrates instant issuance’s worth from a HR perspective. Virtual cards may be ideal for covering the costs of expenses such as a job candidate’s rail fare or hotel charges. Or maybe you’re sending staff on a training course. A one-off virtual card is a great way to help employees avoid spending on their own cards before claiming the money back. Transaction details can also be viewed by your accounts team in real time and receipts photographed and submitted digitally at the point of purchase, streamlining bookkeeping processes.
As we can see, simple and effective, instant issuance represents a huge opportunity to an incredibly diverse range of card programme propositions. One example is the Czech buy now, pay later solution Twisto, which also has a growing presence in the Polish market. This remarkable business has set its sights on being completely plastic-free by 2025, whilst still allowing its customers to shop at bricks and mortar and online merchants, as well as being able to share payments with friends. Could your card programme write the future with a similar innovation path?
Taking instant issuance innovation to the next level
It’s incredible to see instant issuance beginning to change the way we manage spending, both as consumers and business owners. As the first payments platform to bring to market technology that allowed virtual cards to be instantly provisioned and tokenized into a mobile wallet, I like to think Marqeta’s expertise in this area goes deeper than most others’ and is growing fast. In fact, we recently established a partnership with global investment banking and financial services icon J.P. Morgan to offer tokenized cards to all of its commercial card programmes in the US from next year.
When you understand their transformative potential, virtual cards are instantly appealing. We’d love to talk through some exciting use case scenarios that will bring fresh innovation to your business – and ensure your customer and employee experience offerings are best-in-class.