Eye on Virtual Cards: A New API And New Software Promise to Ease a Heavy Burden

Three companies on Thursday released technology aimed at streamlining virtual cards, digital versions of familiar plastic credit cards that banks can issue to consumers and businesses.

Switch Inc. unveiled a version of its Cardsavr card-on-file technology that issuers can integrate now. The new release automates the entry and updating chore for virtual cards, a process Switch says is tedious for consumers and a drag on virtual card adoption.

The Seattle-based company says the Cardsavr application programming interface already manages card-on-file tasks across “thousands” of merchant sites. In February, a version of the API emerged to help consumers manage the new credentials associated with replaced cards.

Now Switch says its latest card application should ignite banks’ issuance of virtual cards, which are tied to particular merchants and often restricted with specified spending limits. The cards, which typically consist of an account number and card-verification value, appeal to some issuers because they are viewed as more secure and less expensive, as well as easier to replace, than plastic cards.

But adoption has “stalled,” Switch says, because the cards are a hassle for consumers. “Until now, activating merchant-specific virtual cards required cardholders to laboriously create and update every merchant one-by-one. Our Cardsavr API automates and simplifies the entire user process and secures the card on file at the merchant with one step,” says Chris Hopen, the company’s chief executive, in a statement. Card updates, the company adds, can be executed in “seconds.”

Information was not immediately available on how many issuers have adopted the new API.

But virtual cards are also a headache for businesses receiving payments from clients, according to separate news released Thursday. That has prompted Noventis Inc., a company that specializes in providing virtual card payments for suppliers, to team with HighRadius Corp., a cloud-based accounts-receivable software company, to take a crack at making virtual cards easier. Both companies are based in Houston.

“Suppliers are increasingly receiving virtual card payments from their buyers,” Sayid Shabeer, chief product officer at HighRadius, said in a statement. “Historically, this leaves suppliers with tedious, manual work for processing and reconciling these payments—not to mention the fact that it opens them up to higher risk and PCI-compliance requirements with the card data exposure.”

The new service from this collaboration promises to lift that burden, Shabir added. “Through this collaboration, we’re eliminating all the above for Noventis’s extensive and growing client base. For the first time, these suppliers will benefit from secure straight-through processing and reconciliation for virtual card payments,” he said in the statement.