- JPMorgan teams up with fintech start-up Marqeta to develop virtual credit cards.
- JPMorgan Chase industrial cardholders will be able to use virtual credit cards in the form of mobile wallets such as Samsung Pay or Apple Pay.
- Marqeta offers virtual card technology to Instacart and DoorDash to ease the process for gig economy workers during the delivery process.
- Marqeta raised USD 150 million from an undisclosed investor in May this year and doubled its valuation to USD 4.3 billion.
The Wall Street’s commercial cards team is affiliating with Bay Area start-up Marqeta to launch virtual credit cards. This novel function will allow JPMorgan corporate cards to work as a virtual card in mobile wallets such as Samsung Pay or Apple Pay. This function will start working immediately, instead of waiting for a corporeal version in the mail.
John Skinner, Head of Commercial Cards at JPMorgan, said, “this is another way of getting virtual company cards into the hands of those who need them very quickly.” Further, he added, “we know there’s a need for this product — what Covid-19 has taught us is that there are more use cases for this than we imagined.”
This virtual card was primarily designed for contract workers or gig economy workers, who need to pay expenses but were not qualified for a corporate card. Thus, gig economy workers use “virtual cards” in the delivery process. Also, the digital version may add some expenditure parameters and per diem totals, as well as limitations on where a worker can splurge.
Owing to the pandemic situation, several Americans have adopted the work from home (WFH) policy; therefore, Skinner said this plan of digital cards might work by helping individuals who don’t have access to their offices where a corporate card might normally arrive. Nevertheless, owing to the pandemic, contactless and digital payments are accepted across the globe, thus boosting the overall demand for virtual cards.
Further, Skinner added, the feature of digital payments will be added by 2021 and will be available only for commercial cards. “He did not say if the bank has plans to expand to its Chase, consumer side.”
Marqeta offers similar technology for Instacart and DoorDash, which issue virtual cards to delivery workers who pay for groceries or carryout orders in person. Square also prefers Marqeta for a physical and virtual debit card launched in the form of Square Cash. For plastic business, Square revealed a debit card in January 2019.
JPMorgan had a history of buying or partnering with fintech companies. In December 2017, JPMorgan acquired WePay, a Silicon Valley-based start-up. In this case, Omri Dahan, Chief Revenue Officer at Marqeta, said, “it would have taken years for the Wall Street giant to build a similar product in-house.”
Further, Dahan added, “These big financial institutions are tied to the legacy systems that they have built on top of for years, it’s hard for them to access modern technology. Thus, we can give them access to that, without a massive lift on their part.”
Marqeta generates money in the same way Mastercard and Visa does. That means the company applies fees on every transaction made by consumers. Although, the company did not state the financial specifics of the JPMorgan agreement.
Recently, Marqeta raised USD 150 million from an undisclosed investor in May, thus doubling its valuation to USD 4.3 billion in a few months.