In a world where digital payments are the norm, businesses need greater control over how and where money is spent. Whether it's to reduce fraud, streamline expense management, or maintain tighter alignment with operational policies, dynamic spend controls are a powerful tool in the modern payments ecosystem.
Dynamic spend controls enable real-time customization of card transaction authorizations, ensuring that every transaction meets specific, predefined conditions. These controls not only help businesses mitigate fraud but also give them the flexibility to implement spending rules that reflect their unique operating models.
In this blog, we'll dive into how dynamic spend controls work, explore the difference between authorization and velocity controls, and highlight the role of Just-in-Time (JIT) funding in creating powerful, real-time decisioning systems.
What are dynamic spend controls?
At their core, dynamic spend controls are configurable rules that dictate how, when, and where a payment card can be used. These rules are enforced in real time, at the point of transaction authorization. Only modern card issuer processors have the infrastructure and flexibility to support this level of real-time customization and control at the point of authorization.
For example, a transit benefit card might be programmed only to allow purchases related to commuting. If the card is used at a grocery store, the transaction is declined immediately.
Spend controls can be based on variables such as:
- Merchant ID or merchant category code (MCC)
- Time and date
- Currency type or country
- Transaction amount or frequency
- User-specific data, such as role or employee ID
These controls empower organizations to enforce rules at the moment of purchase, ensuring compliance, reducing risk and putting the card program manager in full control of each and every transaction authorization.
The two pillars of spend control: authorization and velocity
Spend controls fall into two broad categories: authorization controls and velocity controls. Each serves a different purpose and can be layered for even greater precision and security.
Authorization controls: Who, where, and what
Authorization controls set the rules around who can spend, where they can spend, and what they can spend on. These parameters are enforced before any transaction is authorized.
Typical authorization variables include:
- Merchant ID – Limit card usage to approved merchants.
- Merchant Category Code (MCC) – Restrict spending to certain categories like fuel, lodging, or restaurants.
- Currency type and country – Prevent unauthorized foreign transactions.
- Time and date – Ensure usage during specific hours.
- Transaction amount – Cap individual purchases based on user role or policy.
Example in action:
Imagine a food delivery platform issuing cards to couriers. Authorization controls can limit each courier to specific restaurants (merchant IDs), require the exact amount of a given order to match, and enforce a transaction window during the active delivery timeframe. These rules reduce the risk of fraudulent purchases and ensure the payment directly maps to the order.
Velocity controls: How often and how much
Velocity controls define the pace at which transactions can occur. These limits are typically expressed as thresholds across specific timeframes.
Common velocity controls include:
- Daily or weekly transaction limits
- Frequency of use per hour or day
- Aggregate spend caps over a defined period
Velocity rules are often layered on top of authorization controls for enhanced security and relevance.
Example in action:
An employee fuel card could be configured to only allow purchases between 9 AM and 6 PM, Monday through Friday. On top of that, the card might be restricted to fuel station MCCs and capped at a certain number of transactions or total spend per day.
Adding more real-time intelligence with Just-in-Time (JIT) funding
Dynamic spend controls become even more powerful when combined with Just-in-Time (JIT) funding - a method where cards maintain a $0 balance until a transaction is authorized and funded in real time.
With JIT, the system checks spend control rules at the point of purchase and only releases the necessary funds if all conditions are met. This ensures no excess funds sit on the card, reducing the potential for misuse.
Marqeta supports two forms of JIT funding:
- Managed JIT funding
In this model, Marqeta enforces predefined spend rules to make authorization decisions automatically. It’s efficient and straightforward, though it can be somewhat limited. Transactions are evaluated based on preset rules without any reference to external data sources at the time of the transaction.
- Gateway JIT funding
Gateway JIT takes things a step further. In this model, Marqeta forwards the authorization request to your own system, allowing you to make funding decisions in real time using your own business logic and datasets.
With gateway JIT, you can:
- Validate the geolocation of the cardholder
- Check merchant details in real time
- Reference your internal systems (e.g. booking systems, CRMs, invoicing platforms)
- Append metadata such as invoice numbers or loan IDs to transactions
This opens the door to fully contextual decision-making, where every transaction is evaluated not only against predefined controls but also in light of broader business data.
Real-world applications of gateway JIT and dynamic spend controls
Let’s look at how gateway JIT and dynamic spend controls come to life in real-world scenarios.
Online Travel Agencies (OTAs)
An OTA can use the original hotel booking transaction ID to validate and authorize any additional charges, such as a customer extending their stay. By referencing internal records during authorization, the OTA ensures the additional transaction aligns with the initial booking, reducing the risk of errors or fraud.
Buy Now, Pay Later (BNPL) providers
BNPL firms can dynamically assess a borrower’s creditworthiness at the moment of purchase. They can validate user identity, reference the requested purchase amount, and instantly approve or deny funding based on up-to-date loan or repayment data. Gateway JIT also allows them to tag each transaction with the appropriate loan ID for seamless reconciliation.
Expense management platforms
Expense management companies often develop their own custom rules engines to enforce spending policies across client organizations. With dynamic spend controls and Gateway JIT, these platforms can reference their internal rules at the point of authorization to enforce policy compliance in real time, down to the department, role, or employee level.
Beyond purchases: Controlling refunds in real-time
One often-overlooked benefit of dynamic spend control and Gateway JIT is real-time refund decisioning.
Using a dual-message transaction process (separating authorization and clearing), businesses can now make non-funding decisions, like whether to allow or deny a refund, during the initial refund authorization.
This is especially useful for platforms that want to reduce fraudulent refund activity or enforce refund policies based on customer behavior, transaction history, or merchant compliance. Traditionally, refunds are accepted offline and only show on reports the next day. Now, platforms can act on them instantly.
Dynamic spend controls matter
The payment landscape has evolved dramatically, with digital wallets, virtual cards, and embedded finance reshaping how to manage money. But with innovation comes complexity—and risk.
Dynamic spend controls provide a much-needed layer of protection and personalization in this new environment. They allow companies to:
- Reduce fraud and misuse
- Align spending to real business needs
- Gain granular control over transactions
- Improve compliance and reconciliation
- Respond to changes in real time
At the same time, they support innovation. By allowing organizations to tailor rules for each user, use case, or business model, spend controls empower agility, rather than restrict it.
A dynamic duo
Marqeta’s dynamic spend controls, especially when paired with Gateway JIT funding, give companies a way to help manage spending intelligently, with real-time context, flexibility, and precision.
Whether you're managing gig economy payouts, employee expenses, or customer loans, dynamic spend controls turn every card transaction into a customizable, data-driven decision point.
Want to learn more?
Check out our tech brief.
