JPMorgan Chase & Co. is launching its Single-Use Accounts commercial card product in Canada, the company announced Sept. 12. The bank has offered single-use cards in the U.S. since 2004 and in recent years also in Europe.
By providing a one-time-use, 16-digit credit card number for individual business-to-business payments, the product can reduce fraud on corporate card accounts as well as streamline purchase orders for both buyers and sellers, Allison Tobin, Chase SUA product manager, tells PaymentsSource.
The fraud rate on Chase’s single-use commercial cards is .00001%, she says.
Analysts say single-use cards, or virtual cards, for commercial payments are expanding rapidly as corporations rely on them more heavily for specific payments that can be easily tracked and monitored to prevent misuse and fraud.
Citigroup in July said it has expanded the reach of its virtual commercial cards to 56 countries (
American Express Co. for years has offered virtual commercial cards products in “dozens” of global markets, the card network says.
Chase notes that spending on its single-use card product has quadrupled from 2008 to 2010.
“In the U.S. we’ve had a tremendous amount of traction with (single-use cards), for a variety of reasons, not the least of which that it reduces fraud,” says Tobin. “It’s also convenient and easy to use and can be used at any card-accepting supplier.”
It made sense to open up the product to the Canadian market as companies there seek to reduce corporate card account fraud and streamline their payments systems, she says.
“We have a significant number of commercial card clients in Canada and we saw the demand of clients wanting to get rid of check payments,” Tobin says. A handful of clients are in the implementation stages now, she says, though she declined to name the exact number or the company names.
One analyst says she is not surprised the product is growing so fast because it is efficient and it significantly lowers fraud and abuse on corporate accounts due to its unique card numbers that can only be used within a specific timeframe and then become inactive.
“Fundamentally what is happening in the commercial card space is movement into virtual cards so the companies don’t have to invest in plastic,” Nancy Atkinson, an analyst at Aite Group, tells PaymentsSource. “Companies like to use the (single-use cards) for spend because they don’t have to identify hundreds of employees and evaluate them for credit and get cards issued to them.”
The capability of tracking payments electronically also is a tremendous value because it is faster for both the buyers and sellers to close the transaction, rather than waiting for expense accounts to be approved and turned in, Atkinson suggests.
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