The Accredited Standards Committee X9 Inc. (X9) today announced an initiative to standardize both the creation and efficient acceptance of virtual, single-use purchase card accounts (SUA), in order to reduce overhead costs and challenges faced by suppliers. SUAs are used by businesses as an alternative to checks or electronic funds transfers for paying outstanding supplier invoices.

An SUA is good for only one purchase, and a physical card with its number is not created. Many credit card providers will issue SUAs upon request, and many large businesses use SUAs routinely to pay invoices from their trading partners. With an SUA, neither the buyer nor the supplier has to disclose financial account information in conjunction with a payment.

By some estimates, nearly $600 billion in annual invoice payments will be made in 2024 using SUAs. However, the current process of accepting SUA payments is labor intensive; issuers have different SUA email payment formats and card credential access requirements. The process to retrieve the payment card data, process the payment and apply the payments to outstanding invoice records can be a challenging experience for the suppliers of those purchased goods and services. SUA expiration dates, which can range from 72 hours (including weekends) to 30 days, add to the challenges.

The purpose of this new standard is to recognize the SUA as a payment instrument that should have the same consistent appearance as a check. The payments should also follow the invoice remittance reporting guidance provided in the ISO 20022 standard, including reasons for invoice payment adjustments when applicable.

Standardizing SUAs will benefit both buyers and suppliers, as cash application automation opportunities improve and payment exceptions are minimized. X9’s work will review methods to deliver the SUA transaction notice, propose common syntax and formats for information in the notice, define minimum levels of user authentication and payment security, and appropriate expiration dates. A key objective for the initiative is to provide guidance on formatting remittance data and identify possible APIs (application programming interfaces) that would help automate the overall process.

A major benefit of standardization will be the cost savings resulting from higher levels of automation. The newly formed working group may also include other requirements related to SUAs if its investigations reveal additional issues and needs.

X9 now seeks additional participants for this initiative, ideally including individuals familiar with the SUA process and those with backgrounds in the creation of virtual purchase card emails, ERP accounts payable applications, Payment Instruction Files and input forms buyers use to apply for the issuance of SUAs. Those interested in joining the effort can indicate this via the form on X9’s website.

"The single-use virtual payment card allows account holders to keep financial information to themselves, which is a great benefit," said X9 Executive Director Steve Stevens. "However, SUA use could increase while costs decrease, if there were more automation on the transaction processing side. A new X9 standard will increase efficiency for both suppliers and card issuers, which will in turn add value for both consumers and businesses. If virtual payment cards are one of your interests, please consider joining our efforts."

About the Accredited Standards Committee X9 Inc.

The Accredited Standards Committee X9 Inc. is a non-profit organization accredited by the American National Standards Institute (ANSI) to develop and maintain national and – through ISO -- international standards for the financial services industry. The subjects of X9's standards include: retail, mobile and business payments; corporate treasury functions; block chain technology; processing of electronic legal orders issued to financial institutions; tracking of financial transactions and instruments; financial transaction messaging (ISO 8583 and 20022); quantum computing; AI, PKI; checks; cloud; data breach notification and more.

X9 acts as the U.S. Technical Advisory Group (TAG) for ISO TC68 (Financial) and TC321 (E-Commerce) and performs the secretariat functions for ISO TC68. Please visit our website (www.x9.org) for more information.

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Judith Vanderkay jvanderkay@gmail.com +1 (781) 883-3793