![]() Gig Economy 101 Everything you need to know about the gig economy.Stables envisions the virtual card partnership as a way to enable consumers to increase their use of stablecoins by accessing Mastercard's existing network. Circle, which is best known as a cryptocurrency company, has added more traditional payment methods over the past few years, making a virtual card a way to extend access to retail payments for USDC users. Mastercard is building its digital currency strategy, and supporting payments for stablecoins is a major goal for the card network. Stablecoins are designed to hedge against cryptocurrency volatility by backing the virtual coin with traditional assets such as U.S. The card has debuted in Australia, and Circle plans to expand it to other parts of Asia, Europe and elsewhere in the coming year. Circle's USDC, one of the world's largest stablecoins, is the preferred stablecoin for this account. The card enables users to spend stablecoin balances across Mastercard's merchant network. "It simplifies transactions, and the merchants already accept the card brand."Ĭircle, Mastercard and the Australian fintech Stables recently launched one of the first stablecoin virtual cards in the Asia Pacific region. These types of payments can benefit from a single-use card that can be accessed digitally, said Shipper. There are trends that contribute to greater use of virtual cards for the near future, such as a desire to control corporate spending, payments tied to buy now/pay later, save now/buy later or other products with short-term payment windows such as product trials or subscriptions. Many of these transactions rely on virtual cards, and part of Mastercard's diversification strategy is to enhance payment processing for clients by making it easier to pay without requiring a traditional card. Open banking enables Mastercard to use tokenization to expand digital payments for contractors and gig economy workers, cross-border payments and other purposes. "Open banking is like a fabric that's a connecting tissue over parts of our business," said Craig Vosburg, chief product officer at Mastercard, in an earlier interview. ![]() Open banking refers to using enrollment credentials for payments or online banking to enable data sharing between the enrolling party and other companies, usually involving a user's bank and third parties such as fintechs. Mastercard's use of open banking to drive technology development extends to its virtual card program. The Conferma partnership develops new uses for Visa Commercial Pay, a corporate spend product that counts Wells Fargo, Umpqua Bank and others as clients. virtual card technology company Conferma for four years. This year, Visa also extended its collaboration with U.K. Visa plans to widely deploy AR Manager in 2024. Juniper's research also notes that B2B payments are a major driver of virtual card growth, particularly for fleet operators and health care providers. Visa is trying to address this through AR Manager. Visa contends that businesses are turning to virtual cards, citing Institute of Commercial Payments research that found 84% of merchants want to get paid more quickly, and are using virtual cards as a result.īut the speed of virtual card issuance does not automatically digitize other processing steps, which Visa contends can be particularly complex for supply-chain payments. AR Manager, which began testing in November, retrieves user account details, initiates payments authorization and clearing and provides reconciliation data to a corporate user's enterprise resource planning system. The card network in October launched Visa AR Manager, an internally developed product that enables merchants to accept virtual cards. That compares with the global total of 678 billion traditional in-store or e-commerce card payments in 2022, according to Capital One.īusiness-to-business payments are driving the growth in virtual cards, as firms look to cut costs while improving security, according to Juniper. The number of virtual card transactions is expected to rise from 36 billion in 2023 to 175 billion in 2028, according to Juniper Research, which released new projections in October. The growth of e-commerce and rising complexity in corporate payments are drawing attention to digital cards. Virtual cards also have an account number that is distinct from the one assigned to a physical card, or even a dynamic number that can be changed to limit spending, so it's not simply using a traditional credit card to pay on a mobile app or website. Virtual cards are fully digital - there is no plastic. The use of digital card payments is expanding, leading banks and payment companies to embrace virtual cards, an old technology that's having a resurgence.
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