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JPMorgan Chase works with fintech start-up Marqeta to carry "digital" bank cards to the market

A smartphone with the symbols for the J.P. Morgan apps.

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JPMorgan Chase throws away plastic for some of its credit cards.

The Wall Street giant's commercial cards team works with Bay Area start-up Marqeta to bring only digital credit cards to the market. With the new function, JPMorgan company cards can be used immediately in mobile wallets such as Apple Pay or Samsung Pay – without having to wait for a physical version in the email.

"This is another way to quickly get virtual corporate cards into the hands of those who need them," John Skinner, Commercial Cards Manager at JPMorgan, told CNBC in a phone interview. "We know that this product is needed. Covid has taught us that there are more use cases than we imagined."

This type of instant "virtual" card has been used in the past for gig economy or contract workers who may have to pay costs but would not qualify for a company card. In the digital version, certain expenditure parameters and daily rates as well as restrictions on an employee's expenditure can also be specified.

Since many Americans work from home during the pandemic, this could also help those who do not have access to their offices or the main address where a company card normally arrives. The pandemic has also accelerated the introduction of digital and contactless payments and made digital cards more attractive.

Skinner said the feature will be available in early 2021 and only for commercial cards. He didn't say whether the bank had plans to expand to Chase's consumer side.

Marqeta offers the same technology for DoorDash and Instacart, which issue virtual cards to deliverers to personally pay for groceries or take away orders. Square also uses Marqeta for a virtual debit card that was introduced through Square Cash and for a plastic debit card that was launched in January.

JPMorgan has long worked with and bought up fintech companies. Silicon Valley-based start-up WePay was taken over in December 2017. In this case, Marrieta CFO Omri Dahan said it took years for the Wall Street giant to build a similar product in-house.

"These large financial institutions are tied to the legacy systems they have been building on for years. They find it difficult to access modern technology," Dahan told CNBC. "We can give them access without having to work hard on it."

Marqeta makes money in a similar way to the established companies Mastercard and Visa – by reducing the percentage of every transaction by customers and a few software fees. The company would not comment on the financial details of the JPMorgan agreement.

Marqeta recently raised $ 150 million from an undisclosed investor in May and has doubled its valuation to $ 4.3 billion within a few months. Other high profile supporters are PitchBook Goldman Sachs, Visa Ventures and PayPal alumni Max Levchin. The card company is reportedly trying to hire investment bankers to advise on an IPO, Reuters reported in early July. A Marqeta spokesman declined to comment on plans to go public.

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