Virtual Payment on Demand
It took me a bit to land on this precise title. I wanted to convey the notion of ephemeral as well as the notion of accessibility without revealing what is in fact truly behind the title: cards.
I decided to leave « cards » out of the title because it conveys too many pre-conceived ideas we attribute to it. And the idea of an ephemeral mode of payment is generally not what comes first to mind.
We associate cards with a physical, generally plastic, object. One with a bunch of numbers and perhaps a chip that we securely carry around in our leather wallets to pay for what we buy. One that carries our signature on the back for reasons we no longer know.
We also associate cards with envelopes from our banks. A rectangle stuck on a letter with instructions to activate the card and tons of conditions. “Please sign on the back of your card and call the number visible on the sticker, visit one of our ATMs or sign in to your online account to activate it before use”.
We also think of statements coming by snail mail. Scissors when our card has expired or was fraudulently used.
But cards have gone a long way. In fact little besides its visual rectangular form have remained.
The new card format is in my mind much closer to ACH / wire instructions than cards as we knew them. I am of course talking about Virtual Cards. Virtual Cards are a smart electronic way to pay. An intelligent monetary bond to a contract. Whatever the type of contract.
Imagine today’s virtual card simply as the payment instructions for a contract. The contract can be directly with a supplier or with you as the intermediary. It can reflect a one time purchase or a recurring one.
And so each contract gets its own virtual card. A payment method to fulfil the delivery of a product or service.
What makes them more powerful than ACH or Wires is their distributed nature. The advantages are large:
Virtual Cards get issued at the point of purchase, with real time approvals, by-passing the laborious invoice processing chain of its ACH / Wire counterpart.
Virtual Cards remove bottlenecks from the centralized ACH / Wire payment processes that remain in the hands of few.
Virtual Cards empower the organization to manage budget in real time with stricter controls with immediate feedback than the slower ACH / Wire solution
Virtual Cards have grown tremendously in use over the past ten years. The format is expected to grow at an even faster pace moving forward. And as soon as users accept the idea of one card = one contract, adoption will likely skyrocket to the benefit of buyers and merchants alike.
