Business Banking: How Virtual Cards Empower Small Businesses

By John San Filippo

Andrew Jamison, CEO and co-founder of Extend Enterprises, recently spoke with Finopotamus to discuss how his company is revolutionizing spend management for small businesses by leveraging the power of virtual cards. Unlike other solutions requiring businesses to switch banks or adopt entirely new credit cards, New York City-based Extend allows companies to layer sophisticated spend management capabilities over their existing credit cards. This innovative approach empowers businesses to generate and distribute digital cards, offering greater control and flexibility over company spending.

Bridging the Gap in Spend Management 

Andrew Jamison

“What we are in the market to deliver is spend management capabilities, delivered actually over the top of your existing credit card,” Jamison explained. He highlighted the gap Extend fills between traditional credit cards and accounts payable (AP) automation tools. While AP tools manage invoice-based spending, Extend focuses on the increasing volume of real-time, digital transactions. This includes SaaS (software as a service) payments, digital advertising campaigns, and other expenses that require immediate, controlled disbursements. “More and more of this spend happens in real time,” Jamison noted, emphasizing the need for tools that offer greater agility than traditional methods.

Jamison provided several compelling use cases to illustrate the versatility of Extend’s platform. He described how insurance providers use Extend to generate virtual cards for lodging expenses related to claims, simplifying reimbursements and streamlining the process for policyholders. Law firms utilize virtual cards for court filings, allowing them to track expenses and bill clients accurately and efficiently. Even within Extend itself, employees use virtual cards for travel expenses, eliminating the need for out-of-pocket spending, he noted. “They can book their flight. They can go and lodge that card in their Uber account,” Jamison explained. “And so, they can make their way to the location without ever putting a single penny from their own pocket into the game.”

Partnering with Credit Unions to Empower Businesses

Extend has partnered with the Jacksonville, Fla.-based FIS, a major provider of banking technology, to offer its platform to credit unions. This white-label service enables credit unions to offer cutting-edge spend management tools to their business accountholders, helping them compete against emerging fintech disruptors. Jamison stated, “Our view has always been there’s two ways to get to market. One is you build your own brand. You build a credit card. You do your own underwriting. Our view is that banks, credit unions, have been doing this for decades.”

Extend acts as a middleware layer, integrating various services, including card networks, processors, and third-party providers like LexisNexis for sanctions screening. This allows for seamless integration with a credit union’s existing. The platform offers mobile and web interfaces, as well as APIs for more digitally savvy businesses.

“We’ve been working with all of the strategic providers,” Jamison confirmed. The platform even allows for the creation of virtual cards for individual transactions, like shipping costs, with customizable limits and expiration dates. “Within seconds, you can essentially send in a request,” Jamison added, highlighting the speed and flexibility of card creation.

The Future of Physical Cards and the Rise of Digital Wallets

With the rise of contactless payments, Jamison believes physical credit cards are becoming increasingly obsolete. “COVID is probably the biggest accelerant of that as an outcome,” he observed, noting the widespread adoption of tap-and-pay technology. Extend’s virtual cards are compatible with digital wallets like Apple Wallet, further diminishing the need for physical cards.

Jamison addressed common misconceptions about virtual cards. He clarified that Extend is not a credit card issuer but partners with existing banks and credit unions, layering its technology over the institution’s infrastructure. He also emphasized that virtual cards operate on credit rails, not as cash equivalents. “We really operate on credit rails,” he stated. This distinction is important, he added, as it clarifies the intended use cases for virtual cards within a business context.

Artificial Intelligence and the Future of Spend Management

While acknowledging the “hype” surrounding artificial intelligence (AI), Jamison outlined Extend’s pragmatic approach to integrating AI into its platform. He described its existing use in receipt imaging and capture and its potential for generating insightful reports and automating tasks using agents. “What we’re now looking at with the advent of agents is becoming much, much more interesting,” Jamison shared. He envisions AI playing a crucial role in providing real-time insights and automating spend management processes, ultimately empowering business owners to make more informed decisions.

For financial institutions partnering with Extend, success is measured by increased customer retention, higher spending, and the adoption of new services, Jamison stated, adding that “It always comes down to the bottom line.”. Looking ahead, he noted, Extend intends to double its customer base and continue delivering significant value to its financial institution partners.