In the card issuance space, a predictable pattern exists with plastic cards, Very Good Security CEO and co-founder Mahmoud Abdelkader told Karen Webster.
Consumer demand card. The issuer prints the card, sends it and quickly loses contact and context about that card. The security risks of plastic cards in the field are well known: lots of Personally Identifiable Information (PII) and, of course, the card number that is there as well.
Necessity is the mother of invention, as they say – and necessity is driving financial institutions (FIs) to consider issuing virtual cards in greater numbers.
The pivot to issuing virtual cards can be linked to a push along supply chains: namely, the continuing shortage of chips, Abdelkader said. The supply of the chips, transistors, and components that go into tangible boards has been problematic. But there is a gap between putting virtual cards in the hands of consumers and getting them to use these cards.
“It is a very important revenue model for companies that issue cards,” Abdelkader said. “And they’re getting a bit of the trade back.”
Special opportunities are in place when it comes to virtual cards, he said. These cards can, for example, integrate offers and promotions – and even loyalty programs (a Netflix subscription, for example) – that can put these virtual cards at the top of the list and at the top of the wallet.
But, as Abdelkader noted, issuers need to know they’re compliant while controlling the entire end-to-end user experience. But navigating card launches quickly and achieving PCI compliance isn’t easy. He highlighted the use of the alias as an essential means of protecting data and the consumer, from the registration of the card to the use of these virtual offers on a daily basis.
At a high level, aliasing has been described as a process in which data is imitated but is not transported to – and does not reside in – end systems.
The increased security levels, Abdelkader said, can also help businesses protect their back office operations. Hackers and ransomware are bypassed because sensitive data is simply not there to be stolen.
Control the experience
For issuers, he said, “it’s important to be able to control the experience, to give that user a conversion experience, to make sure that revenue is maximized and optimized for that particular transaction.” FIs can then use the alias strategically to increase revenue, enticing a user to transact with that same card as part of an app (or rewards program, for example).
Metadata, Abdelkader explained, helps the FI understand how individuals transact because they are motivated to make purchases. FIs also get an added benefit: they don’t have to spend extra money on advertising campaigns or brand awareness efforts. Instead, they can turn security, compliance, and connections into competitive advantages. In the meantime, consumers will eventually be able to monitor and control their data in ways that were not previously available to them.
Abdelkader cited the example of a bank in Texas that had a strict deadline to enter the market with one of its commercial cards. It turned out that in developing these cards, the VGS customer found a sticking point in terms of compliance and security. This hampered their efforts to bring the cards online, as well as their efforts to determine how individuals would interact with their FIs when activating, using, or reporting issues with these cards. The alias, he said, can intercept an email or text message from a customer and “rewrite” it by replacing a card number with the alias – so sensitive data never gets to it. the client agent.
Consider this to be about bridging the deployment and use of the card, as well as creating a constant flow of transactions.
“The point of all of this is that we are solving the back office issues, but also helping customers live faster,” said Abdelkader – and the increase in transactions has been significant, around 15-20%, observed VGS. “These transactions don’t need to be ‘fed’ for the bank to start seeing revenue immediately,” he added.
Give context to maps
Abdelkader said that the flexibility and programmability of virtual cards can result in scenarios where the cards satisfy real-world use cases such as budgeting, where spending limits are in place over a period of time and only for certain elements. Or the cards, he said, can be provided to children, with similar limits, to teach them good spending habits. In the business setting, virtual cards can be budgeted in the same way or limited to treasury functions, or limited by departmental expenses.
Going forward, there are product development initiatives that can give users the option to “sign up” to move their cards to the top of the wallet (with promotional activities to prompt those decisions) or to push a fad. preferred payment. As Abdelkader told Webster, to help FIs innovate in their card programs, exploring data and data privacy, “we have built a platform for you to build applications on sensitive data. , and we know that the interfaces you use today to collect sensitive data themselves should be a platform.
As he told Webster, with the data alias, “the virtual card issuance coin is over. Now card issuers can focus on what they can activate on those cards.”