Protect Your Business Transactions Using Virtual Cards

For companies, keeping track of their spending is just as important as tracking revenue growth. Every business needs a solution for tracking, securing, and easily managing their regular payments and costs. Many companies use checks or business credit cards. While these might be beneficial for some costs, they do not offer an easy-to-use solution for cost management and monitoring. This is what a virtual credit card can do for you. But let’s start with the beginning! So what is a virtual card?

Do Businesses Use Virtual Credit Cards?

You may use a business virtual card in the same way as you would use a real credit card. The only thing is that it is completely virtual; no physical card is tied to it. Virtual cards are typically linked to a central business account, allowing for the creation of individual card numbers for specific purposes. These can be employee expenses, vendor payments, or online purchases.

For example, you may generate a virtual card number to make a certain business transaction, be it travel expenses, corporate launches, or business software purchases. The categories can be different — it is up to you what you choose. Once you’ve made the purchase, you may retire the number, making the virtual corporate card inactive and unchargeable. This level of granularity enables businesses to track and manage their spending more effectively, with the ability to set spending limits, monitor transactions in real time, and quickly disable individual card numbers if necessary. There are different use cases for virtual business credit cards.

Online Purchases

If you have a new vendor and you do not want to provide your banking information, a virtual credit card is an excellent alternative. When acquiring goods or raw materials via global supply chains, it is common to interact with a large number of international middlemen. You may not always have a connection with these companies, and disclosing your whole credit card information may not be a good idea. Creating a single virtual credit card for online purchases might relieve any concerns and enable you to interact with more merchants and providers without risking fraud or disclosing unnecessary personal information.

Employee Business Travel

Employee travel is one of the most difficult costs to monitor for any company. Keeping track of costs may be time-consuming for both the employee and the person on your accounting or HR team who has to approve travel budgets. A virtual card allows each employee to arrange travel and other costs using their allotted credit card number. Your accounting staff has a considerably simpler time validating spending, and there is no need for reimbursement.

Virtual business credit cards are particularly ideal solutions for small businesses when it comes to last-minute travel since they may be generated instantaneously as required. They are also simpler to manage than each employee’s own personal credit card account.

Control Service Overages

Some commercial services, such as hosting or SaaS packages, may have substantial overage fees incorporated into the contract or user agreement. You may manage them using a virtual card number with a predetermined spending limit. If you notice any unexpected overages that you disagree with, you may contact the vendor before they charge you to find a solution. This is particularly true when some suppliers engage in deceptive techniques that you are unaware of until an unexpected overage charge or service fee shows on your bill.

One-Time Uses

Using a virtual credit card is a good idea if you have a business emergency and need to make a one-time payment to a vendor. You may set up your virtual credit numbers to expire after a single usage. This function guarantees that you never face unexpected costs or other complications after making a payment.

Recurring Payments

As has already been mentioned, using a virtual credit card can also help your company with regular payments. Some recurring transactions are difficult to cancel and require you to initiate a chargeback with your issuing bank. This takes time, and it may not always be effective in stopping regular payments. Even if the bank sends you a new physical card, the company may usually move regular payments to the new one. A virtual card number solves this issue and offers you power if you believe your user agreement with a provider is unfair.

Benefits of Virtual Credit Cards for Businesses

There are many benefits of virtual cards, and they are different for each company:

• Reduced Fraud Risk — Using virtual cards significantly reduces the risk of fraud. In certain circumstances, using one-time card numbers with additional restrictions may completely eliminate the possibility of fraud. They may protect your business. For example, certain virtual card numbers might be restricted to particular payments or quantities. If you employ these extra security elements, you may eliminate the majority of the risks associated with using a corporate credit card. This involves a data breach or other security incident in which a number is compromised when making online payments.
• Generate Card Number Instantly — If an employee wants to arrange a last-minute trip to visit a customer, there is probably not enough time to provide an actual credit card. However, with a virtual card, your employee may promptly schedule their trip arrangements. Employees who travel or work outside the office might benefit from virtual credit cards to help control their spending.
• Reduce a Risk With Recurring Payments — So many business tools are now only accessible as software as a service (SaaS). In some respects, this is useful. However, a contract dispute might result in continuous payments even after you seek to cancel. Virtual credit cards generate a unique number for each recurring payment service you use. If there is a problem or dispute, you may suspend the card number and prevent any further charging.
• Easy Accounting — Accounting teams that work with complicated expenditure reports might benefit from virtual card numbers. You may assign individual virtual card numbers to project teams, departments, and individuals. Issuing virtual cards in this manner is significantly quicker and simpler than acquiring and monitoring actual cards. Most virtual card systems may interface with your current accounting software, making things even simpler.

Summary

There are many use cases for virtual business credit cards. Although the use cases may be different, the advantages remain the same — secure online transactions, easy cost management, and accurate control over your company expenses.