The combination of virtual payment cards and mobile wallets gained further ground with the launch of a new service from Mastercard and digital card platform Extend. The service enables the delivery of virtual cards to mobile devices, where they subsequently can be used to make contactless payments—an area of growing demand amid the ongoing Covid-19 pandemic, which has changed corporate spending patterns and given rise to hygiene concerns around traditional touch-based payments methods.
The service features virtual card numbers generated by payment processing technology specialist TSYS and loaded onto mobile devices via the Extend app. From there, the virtual cards flow into mobile wallets for contactless purchases. The card numbers are tokenized by Mastercard's Digital Enablement Service, rendering them useless should they fall into the possession of fraudsters, the companies said. Cards can be issued for single-use and multiple uses, with available controls including specific time frames, amounts and approved merchant categories.
"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 Extend CEO Andrew Jamison said in a statement.
That shift primarily was due to the onset of the Covid-19 pandemic, which many observers believe has finally broken the deadlock long plaguing contactless payment adoption: merchants were reluctant to install contactless acceptance technology without proven customer demand, while consumers saw little upside to adopting a payment method that wasn't widely accepted by retailers. Hygiene and social distancing considerations have changed that equation for merchants and consumers, each of which now have an incentive to adopt contactless solutions.
Even before the pandemic, mobile wallets were seen by many as an effective complement to virtual cards, providing a physical "home" for such cards and solving longstanding issues around virtual card delivery and use—especially for hotel check-in, a process which long had been plagued by complications around virtual card acceptance.
Specialists such as Conferma Pay and GraspPay for several years have been active in the mobile delivery of virtual cards, but several more mainstream payment players have entered the space as of late.
Last month, Visa and Conferma announced a suite of corporate virtual payments services, including a platform that delivers Visa virtual cards to mobile devices. Earlier this year, the two companies forged a partnership to boost virtual card issuance by banks.
U.S. Bank also has emphasized mobile virtual cards, signing deals in recent months with travel management and expense providers SAP Concur and TravelBank to distribute the issuer's U.S. Bank Instant Card product through the mobile channel.