The largest bank in the U.S. is set to get even bigger. JPMorgan Chase is partnering with Marqeta, an innovative credit card issuing platform and processor based out of the Bay Area. The collaboration will help launch a virtual credit card product for commercial users.
JP Morgan’s commercial cardholders will have immediate access to their account and will be able to use their mobile wallets to spend any credit issued to them. And they won’t have to wait for their cards in the mail or reach into their pockets to pull out the plastic. It’s all available digitally.
Marquet is used by many major companies, such as Uber, DoorDash, Affirm, Square, and Instacart. Companies like Instacart and DoorDash issue digital cards to its delivery workers to pay for takeout orders and groceries.
Virtual cards are popular in the gig economy. Another widespread use is by contract workers who don’t have corporate credit cards to pay for their expenses. A digital card also makes it easier to set spending parameters on employees.
John Skinner, JPMorgan’s commercial cards executive, said: “This is another way of getting virtual company cards into the hands of those who need them very quickly. We know there’s a need for this product. What COVID has taught us is that there’s more use cases for this than we imagined.”
Skinner said COVID-19 accelerated the use of contactless and digital payments, making virtual cards more appealing, particularly as more American workers do their jobs from home. The JP Morgan exec said the new digital cards should be available early next year in 2021. The cards will only be available for corporate use.
JPMorgan’s teaming up with Marqeta isn’t the first time the banking giant has partnered with a fintech. In December 2017, it acquired WePay.
Marqeta earns its revenue similar to the two major credit cards, Visa and Mastercard. It takes a percentage of each transaction as well as software fees when applicable. The modern credit card provider raised $150 million in May from an unidentified investor. This sent its valuation to $4.3 billion, nearly doubling it in a few months.
Some of Marqeta’s benefactors are Goldman Sachs, Paypal’s Max Levchin, and Visa Ventures. Marqeta is said to be considering an IPO and is consulting investment bankers on the matter.