JPMorgan Chase is tapping on fintech startup Marqeta’s tokenization technologies to dilemma virtual credit cards to its bank’s commercial customers, both firms announced Tuesday.
The companies said the new performance, which is available early next year, will incorporate with JPMorgan’s present systems and enable immediate issuance of cards to mobile pockets for your bank’s commercial card customers. Marqeta’s tokenization technologies is utilized by companies including Instacart and DoorDash, whose gig employees use the cards to pay for groceries or takeout orders.
- “Marqeta’s drive to pocket performance will add a fresh dimension to virtual payments,” John Skinner, head of cards in JPMorgan Chasesaid in a statement. “With Marqeta, our cards could be enlarged to new use cases such as easing obligations to disaster relief volunteers for recruiting spend where appointment applicants could be issued a card in their cellular wallets for traveling expenditures .”
“This opens up huge new possibilities for companies looking to streamline payments and provide innovative services to their people,” Omri Dahan, chief revenue officer at Marqeta, said in a statement. “To bring this product to a company of JP. Morgan’s scale and have it utilized in a new way is tremendously validating of its market potential.”
The partnership will expedite the process of getting company cards into the hands of those who need them, Skinner told CNBC.
“We know there’s a need for this product — what COVID has taught us is that there’s more use cases for this than we imagined,” he said.
In general, virtual cards and contactless payments have seen a spike in use during the coronavirus pandemic.
About 31 million Americans tapped a Visa contactless card or digital wallet in March, up from 25 million in November, the payment network reported at the end of April. Overall use of contactless payments in the U.S. has grown 150% since March 2019, Visa added.
Mastercard reported contactless transactions were up 40% worldwide in the first quarter of 2020.
On a call with analysts in April, Mastercard CEO Ajay Banga attributed the trend to consumers “seeking for a quick way to get in and out of stores without exchanging cash, touching terminals, or anything else.”
Greg Mahnken, a credit industry analyst at Credit Card Insider, predicts 65% of cards on the market will be contactless by the end of the year, according to Business Insider.
“Going contactless in this environment, if there’s ever been a time to do so, that’s now,” Upgrade co-founder and CEO, Renaud Laplanche told Banking Dive in April, following the launch of the challenger bank’s brand new contactless card.
Laplanche explained the pandemic directed the fintech to roll the card out weeks before schedule.