Virtual Corporate Cards: The Future of Business Payments

With technology and innovation taking over everything today, our payment methods have also evolved considerably. With virtual corporate cards being one of the newer additions, knowing how they can benefit your business and help you achieve profitability is essential. 

Most corporate cards provide benefits such as managing card limits, easy approvals, cashback, and ease of reporting. Virtual corporate cards also offer all these benefits, plus many more. 

What are corporate cards?

Corporate cards are credit cards issued to a business for their purchases. Corporate cards are designed for a particular company, which they then give to their employees for use. 

A corporate card is used by employees for a company’s expenses and not their personal expenses. The bill generated at the end of a billing period is thus approved and paid by the company, not the cardholder. 

What are virtual corporate cards?

Virtual corporate cards, as their name suggests, are corporate cards that are present virtually on an employee’s device. Thus, these aren’t physical cards per se but have all the details a physical card has and can be used to make purchases. 

Virtual credit cards are more accessible and secure than physical cards. With virtual credit cards, you avoid the hassle of storing multiple cards and the risk of losing your card or getting stolen. 

They are also comparatively easier and faster to create, as you don’t have to wait for your card to be printed and delivered. 

Components of a virtual corporate card

A virtual corporate card has essentially the same components as a physical card, except it is present virtually. These are the details you’ll find in a virtual corporate card:

• 16-digit card number - A virtual corporate card contains a 16-digit number used to identify the card, similar to a physical card. This number can be used as the card number for transactions. 
• Cardholder’s name - The cardholder’s name can contain the name of the employee to whom the card has been issued. Some cards might also mention the company’s billing address and name for correspondence and identification. 
• Expiration date - Virtual corporate cards can be used for a one-off payment or issued to an employee for a set amount of time. However, a virtual corporate card also contains an expiration date or is a valid up to date, after which a new card might be issued to the cardholder.
• CVV - The card verification value is a three or four-digit number on a card, which is used to prevent fraud. This number is generally present on the backside of a physical credit card and is hidden on a virtual credit card, to be revealed with a few clicks. 

Benefits of virtual corporate card for your business

Virtual corporate cards provide many benefits over physical cards and other payment methods. Here are a few you can enjoy after switching to virtual corporate cards:

Streamlines accounts payable processes.

With the help of virtual cards, all your vendor payments can be consolidated on a single platform. This reduces the amount of paper invoices processed by your AP accountants daily and reduces the load of manual work from their shoulders. You can also view all your monthly spending on a single platform, reducing the hassle of consolidating data for presentation. 

Secure method of payment

Since all payments are managed via a single and secure platform without the risk of corporate cards getting stolen or misused, virtual corporate cards provide a risk-free payment method for your company. You can rest assured that all your vendor payments follow the standard approval process, reducing the risk of invoice fraud and vendor fraud. 

Cost savings

Virtual corporate cards, like any other credit or debit card, come with offers and cashback. This provides you with cash-saving opportunities as and when you spend. With a load of manual accounts payable tasks also getting reduced, freeing up your accountant’s bandwidth, they can also focus on more essential strategic cost optimization tasks. 

Virtual credit cards can also be easily created and removed without any extra cost. 

Improve flexibility for employees.

With virtual credit cards, your employees can make purchases and submit bills remotely without submitting paper invoices and receipts at your office for reimbursement or payments. 

Real-time spend tracking

Virtual card payments can also automatically be reflected in your accounting system with intelligent two-way sync. This allows you to track and manage your spend in real-time, knowing whether the current purchases stick to your allocated budgets and better plan for future purchases. 

Set strict budgets for purchases.

The flexibility of setting a budget limit for your virtual cards also allows you to maintain a strict budget for each spend category, ensuring that any over-budget spend happens with proper approvals in place. This improves the responsibility of your employees to ensure cost optimization for your company. 

Easy to create and distribute

Virtual cards are also straightforward to create and distribute, with multiple cards linked to one bank account. Unlike physical cards, you also don’t have to worry about the card getting lost in delivery or the card delivery getting delayed due to logistical reasons. 

Improve compliance

Any transaction made on a virtual card will create an elaborate paper trail stating the timing, who made the payment, how much was paid, and to which vendor and which business head has approved the transaction. This will aid in creating elaborate audit trails, allowing you to detect frauds, flag non-compliant vendors, and efficiently conduct accounts payable audits. 

Customizable and easy approval workflows

Most vendors like ClearTech also allow you to customize your approval policies according to your company's work, such as setting approval groups for high-value transactions or a set of approvers for a particular vendor. You can also set observers for a bill, who will be notified of the expense but are not responsible for approving it. This lets you quickly process your payments without tracking the correct business approvers.

Conclusion

Virtual corporate cards are company-owned credit or debit cards issued to an employee for purchasing goods or services for the company. A virtual credit card is only present digitally and can be used like a physical card. Like physical cards, they also contain a 16-digit card number, expiration dates, cardholder name, and CVV. Virtual cards provide a company with many benefits, such as cost savings, attractive cashback and discounts, streamlined accounts payable processes, real-time budgeting and spend tracking, and customizable approval policies, all without the hassle of delayed delivery time and extra card creation costs. Your business can benefit dearly from adopting virtual credit or debit cards. 

FAQs

• What is a virtual corporate card?

A virtual corporate card is a digital credit or debit card issued by a company to its employees for company-related purchases.

• How do virtual corporate cards work?

Virtual corporate cards work like physical corporate cards, except they are only available virtually. All virtual cards have a unique 16-digit card number linked to the company’s bank account for billing and payment purposes.

• What is the difference between a virtual card and a corporate card?

Virtual cards are only present virtually on a mobile device, whereas corporate cards are generally present physically. 

• How do I create a virtual card?

You can create a virtual card by signing up for a card program. You might be required to provide your company details, bank account, and billing information and wait for your request to be approved.