The stage is set for contactless payments in commerce, for plastic to remain in the wallet, and for consumers to embrace digital wallets.
As workforces become more decentralized, as far-flung employees still have to pay suppliers and vendors — and perhaps even travel (someday) — the stage may be set, too, for technology to help transform the way employees spend corporate money.
To that end, U.K. FinTech Conferma Pay said Wednesday (May 6) that it has teamed up with Visa to integrate the payment network’s virtual cards into the Conferma Pay mobile app, provisioning commercial cards to their phones’ digital wallets.
In an interview with Karen Webster, Simon Barker, CEO of Conferma Pay, explained that the announcement heralds the first time key attributes of virtual commercial cards — including expense controls and seamless data reconciliation — are being tied to tap-and-go payments, with the ease of use that mark contactless consumer payments.
He noted that Conferma Pay’s niche is as a “virtual card distribution platform,” paving the way to integrate virtual cards into the employee’s pocket — or in this case, through digital wallets such as Google Pay and Apple Pay.
Up till now, spend management has been tied to what Barker termed the “invisible bank,” where employees typically will spend money using their own (plastic) cards, and then claim those funds back through expense reports (where reconciliation can be time consuming and messy).
To get a sense of how it can all add up, consider the fact that transactions have averaged more than $30 each or roughly $1.6 billion a month in the U.S. alone. Tighter control of employee spend can eliminate the ad hoc transactions and unplanned spending that can cut into margins, he added.
Stage Set For Contactless Shift
The Wednesday announcement coincides with a macro environment that has, in the age of the coronavirus, increasingly turned companies’ attention to not just margins, but safety, too.
“There’s the desire not to be handing things over,” said Barker, “and anything that removes interaction” will likely be embraced by corporates and employees alike.
“It’s just more appropriate than ever,” he said, of the shift to virtual cards and mobile wallets.
The issuers are ready, too. As Barker told Webster anecdotally, one issuer based in the U.K. has estimated it has done more in just the past few weeks in shifting to digital channels than had been seen in the past seven years.
There’s been increasing focus on the constraints that come with issuing physical cards. For example, some issuers may have been unable to actually physically print the cards themselves (due to supply chain issues) or call centers have had to be closed.
"The digital channels become the one thing that they can control and that they can keep moving forward on,” he said of the issuers. “So, we've seen a lot more focus for our type of services over the last four months."
The Mechanics And The Roadmap
In terms of mechanics, employees use the Conferma Pay app to provision virtual commercial cards to their phone’s digital wallet.
Conferma Pay’s mobile app captures total spend in a single record (eliminating the need for receipts and expense reports), which, transmitted to the card program manager, offers transparency into individual member spend.
With the mechanics of the platform model, said Barker, spend management and reconciliation of data happens in real time by using the same reference numbers within an organization (tied to different projects, for example, or categories of spend). Along the way, B2B and travel and entertainment (T&E) spend are integrated into a single point of contact.
In this way, he told Webster, “you manage the spend management piece upfront before it’s actually ‘spent.’”
Spend management done in real time has particular appeal for firms that want to remove the risks of having physical plastic cards (and relatively high credit limits) in the hands of their employees and contractors out in the field.
Barker said that beyond the contactless use cases, the virtual cards can also be used in an eCommerce setting, as it is tied to the same 16-digit and CVV data that would be used in card-not-present transactions.
In this way, he said, the employee who is working from home who needs to buy provisions for work from online can do so through the same processes that mark everyday consumer-focused commerce.
Conferma Pay and Visa said Wednesday the solution is now available globally to Visa’s commercial bank clients, enabling employees to use their virtual cards to pay wherever contactless payments are accepted via tap to pay.
Barker told Webster that initial partners include more than 50 banking partners around the world tied to the company’s virtual card platform, issuing Conferma Pay-generated cards across 197 countries globally.
As Barker told Webster, “virtual cards give you a lot more control, a lot better data, and a lot better reconciliation.”