B2B Payments

In 2019, Mobilize The Commercial Card: JPMorgan

While commercial card innovation certainly accelerated in 2018, progress can always continue. One area of development that J.P. Morgan Managing Director and Head of Commercial Card Product Management Naney Pandit says should be a focus this year is in mobilizing the corporate card.

It’s not altogether an unfamiliar concept, of course. Much attention has been paid to mobile business payments in the fleet sector in particular, with Comdata launching its mobile app, Comdata OnRoad, that links to fleet driver funds, for example.

Some financial institutions, including Bank of America and UMB Bank, have also invested in mobile B2B payments. In September Bank of America announced that it had added mobile wallet support for a suite of commercial card products, now letting corporate card holders use Apple Pay, Google Pay and Samsung Pay. UMB Financial Corporation also spoke with PYMNTS last year about its strategic focus on mobile.

But so far, mobile B2B payments have been slow to take off.

“Business mobile adoption is very minimal at this point,” said UMB Director of Bank Products Uma Wilson, in an interview last September.

Recent Capital One research also uncovered how sluggish mobile payments adoption has been in the corporate setting. Its annual commercial card survey released in May found corporate executives are eager to at least learn about new innovations in electronic B2B payments, particularly as they seek increased efficiencies and value. Yet less than half of survey respondents said they have access to a mobile app that delivers visibility into commercial card spend, or to a mobile app that supports travel expense submissions or management.

That’s despite earlier 2018 analysis from Barclaycard that found travel managers have faced a 29 percent increase in requests among employees to pay by mobile wallet.

Even so, experts predict a steady trickle of mobile payments adoption from corporate payers.

An Accenture Payments report published last month found the rising adoption of virtual cards among businesses is fueling mobile payment adoption in the space. Researchers forecast virtual cards to power a 10 percent annual growth rate of the commercial card market through 2022, with virtual commercial card spend on mobile wallets expected to grow by 43 percent during that time, totaling $42 billion by 2022.

This trend will be driven by value-added features on mobile corporate payments options as “issuers continue to enhance solutions to issue/approve virtual cards from mobile form factors, and corporate travelers become more comfortable with mobile wallet capabilities,” Accenture’s report read, according to Frank Martien, managing director for payments research in North America, in an Accenture blog post.

J.P. Morgan’s Pandit recently told PYMNTS that she would like to see the trickle of mobilized corporate payments accelerate in the New Year. Below, Pandit sounds off on how increased support for mobile commercial card payments will not only boost convenience for corporate payers, but the added benefits of security that mobile wallets provide (and that corporates demand).

Following The Consumer Trend

“Mobile wallets are a convenience available to consumers — they can simply tap or scan their phone at a checkout terminal, and access their card benefits through a mobile app. But employee or commercial cards have lagged behind in offering this same experience — until now. We think 2019 will be a crucial year for this sector. We have encouraged our clients to streamline business purchases for cardholders by enabling commercial card integration to a mobile wallet.  Making it faster and easier to checkout while on business travel, and accessing features that make managing their cards much more convenient.”

Providing Convenience

“Commercial cardholders can purchase items online, in store or in app using mobile wallets including Apple Pay, Samsung Pay and Google Pay with the same tap-and-go convenience. The same features found in the physical card — loyalty rewards, spend controls, and merchant fraud liability protection — can all be accessed through their preferred mobile wallet.”

Enhancing Security

“An added benefit to using commercial cards in mobile wallets is security and protection of card numbers. Mobile wallet transactions are tokenized which means the actual card number is not shared with each transaction. Device authentication, which requires an identification number and/or fingerprint to set up, should also be utilized for an added layer of security.”

What’s Next In 2019

“Mobile wallet payments amounted to $75 billion in 2016, and they’re projected to roll in $500 billion by 2020. As adoption grows, credit card holders will expect all their cards to behave the same, have the same features, and ultimately work in whichever way they prefer to checkout: dip, swipe, tap or scan.

“Companies can help their employees be ready for that by working with financial institutions who can help them modernize their payment experience … Businesses will continue to adopt consumer spending models, and companies will need to carefully select financial partners that understand these innovations.”

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