Business owners are understandably reluctant to allow employees, contractors and freelancers take the company credit card. But asking them to use a personal card raises other issues, such as scanning receipts for reimbursement.

In co-founding Extend nearly a year ago, CEO Andrew Jamison felt a much easier way to address this problem would be to combine a virtual business card payment with the model of most P2P apps by enabling business expenses to be made from a phone number or email address.

At the network level, Extend is best defined as a platform that can account for mass generation of "virtual cards" through the sharing of a different tokenized account number. But the company is adamant that its product is not a virtual card generator.

Extend co-founders from left, Guillaume Bouvard, Danny Morrow and Andrew Jamison.
Extend co-founders from left, Guillaume Bouvard, Danny Morrow and Andrew Jamison.


"We are not underwriting customers or issuing virtual cards, but establishing the communication rail for account numbers to make their way from one person to the next," Jamison said.

In that manner, the simplicity of the credit card sharing is akin to making a Venmo money transfer on mobile phones, but the Extend model is closer to the Zelle P2P network because the company works with banks and integrates its platform into the bank payment systems, as opposed to creating its own rails.

From a single business card account, Extend creates a different card number with a unique funding limit and specific date range for its use so a company can send it to an employee needing to make a purchase at a certain time, Jamison said. The employee can request a top-up of the amount if the cost of the needed materials or service is over the limit set on the Extend transfer.

"We don't really define it as a single-use account because that is not what the end user wants," Jamison said. "It leverages the single-use capabilities that are prominent in the B2B or P2P space, whether we are working through Mastercard or other payment platforms."

Any type of reversal on a charge through an Extend transaction — if an employee determines the purchase didn't work out, or a product had a defect — goes to the back office on the proper account number and money is returned to the underlying funding account, Jamison said.

While a freelancer might have the digital account on his mobile phone for a specified period of time, the account owner (employer) can turn the account off or on as needed under certain circumstances.

The company completed a $3 million seed financing round late last year through Point72 Ventures, with investments from Plug and Play, Reciprocal Ventures, WorldQuant Ventures, and various individuals. The company's initial bank provider is Silicon Valley Bank.

Extend's twist on the P2P model caught the attention of investors who were looking for something they felt could deliver on the key element of anything payments-related — reaching scale fairly quickly.

"We saw this evolving in much the same way as Venmo and Zelle have evolved," said Evan Pope, senior ventures associate for fintech at Plug and Play Ventures. "In a very short period of time, the bank-supported Zelle has far outstripped the volumes processed by Venmo, and we believe the same will hold true for Extend because of their partnership model."

Banks have often struggled to solve customers' needs related to insights and controls, Pope added. "As a result, companies have preferred to let their employees use their personal cards for their ad hoc business expenses," he said. "In some cases, they resort to prepaid cards, but they have their own challenges around managing balances and acceptance at critical merchant locations, like car rental agencies."

Any bank already integrated with Mastercard's upgraded In Control for Commercial Payments software (ICCP 2.0) can deploy Extend immediately. Extend has worked with both Mastercard and Visa to make the mobile account transfer system available to its U.S. issuers.

Business cardholders and those who would receive digital card account numbers can download the Extend app from Apple or Google app stores to access the platform.

In the future, Extend might work with companies that provide small-business loans, Jamison said.

"We have been approached by online lenders for both consumers and businesses that are looking to possibly leverage our platform," he said.

The lenders are asking whether, instead of loaning money, if they could possibly send a virtual card instead — and then more easily monitor the transaction to assure that the money was used for what the business intended, Jamison added.

The use of virtual account numbers is already coming into play in other areas that financial supporters feel Extend can have an impact.

"They become a natural fit for expense and procurement software platforms, which are looking for a single channel to banks in the same way as customers are trying to ensure that they curate a single set of user experiences for their employees and contractors," Plug and Play's Pope said.

In addition, businesses like insurance companies, in addition to lenders, will seek help from a company like Extend to "streamline their own internal processes by issuing virtual cards," Pope added.

Based in New York, Extend was founded by Jamison, who had nearly a decade of experience at American Express; chief operating officer Guillaume Bouvard; and chief technology officer Danny Morrow.

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