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Most companies still run spending through one or two shared company card numbers. A virtual credit card replaces each of those shared numbers with a card number created for a specific supplier or spending purpose.
That shared number might otherwise sit in a dozen SaaS accounts, an advertising platform and a travel booking tool. Finance then encounters each payment for the first time on the statement.
This arrangement becomes difficult to manage once the same number is effectively doing the job of 30 cards. Finance can only apply important controls after the money has moved, including controls over who can spend, how much they can spend, which suppliers they can use and whether supporting receipts are available.
Virtual cards move that control point to the moment the issuer creates the card.
Key takeaways
A virtual credit card is a card number without physical plastic. A company creates it for a specific purpose or supplier and applies controls at issuance rather than at the statement stage.
Virtual credit cards draw on a bank credit line. Virtual debit or prepaid cards draw on funds the company already holds, so the choice affects both financing and how strictly a limit stops a payment.
Single-use cards prevent anyone from reusing a stored card number. Recurring cards give each subscription its own limit and its own off switch.
Shared company cards can make attribution difficult. Finance may only learn who spent the money and why after the payment has already been made.
Traditional banks typically offer virtual cards within corporate card programmes. Spend management platforms can issue them to employees within approval rules set by the finance team.
Virtual cards can make month-end close easier when each transaction and its supporting records reach the accounting system without manual re-entry.
What is a virtual credit card?
A virtual credit card consists of payment credentials that exist only in software, including a card number and its authentication details.
The credentials connect to your company's card account and work anywhere the issuer permits online card payments. Where supported, the cardholder can also add the card to a mobile wallet.
The issuer does not send a physical card. Instead, the programme administrator can create and control the number directly from the account without affecting any other card in the programme.
It is important to distinguish between virtual credit cards and virtual debit or prepaid cards.
Virtual credit card
A virtual credit card draws on a credit line that the bank has agreed with the company. The company settles the balance at the end of each billing cycle.
Eligibility may depend on a credit assessment and other criteria set by the provider.
Virtual debit or prepaid card
A virtual debit or prepaid card draws on funds the company has already placed in the account rather than on a credit line.
Either funding model can support different types of virtual cards. An issuer may configure:
A single-use card that deactivates after one authorisation
A multi-use card that remains open for a project or category of spending
A recurring card that remains open for a subscription within a set limit
For finance teams, the distinction comes down to two questions:
Does card spend provide financing, or does it control an outflow of cash the company already holds?
Is the limit based on available prepaid funds or a credit ceiling?
How do virtual cards work?
A virtual card typically works in five steps.
1. Request
An employee requests a card for a named purpose and defined spending conditions. These may include:
The spending amount
The supplier
The expiry date
The relevant budget
Any applicable merchant restrictions
Alternatively, finance may create a card directly for a supplier payment.
2. Approval
Where the programme supports approval routing, the request goes to the relevant budget owner or approver.
3. Issuance with controls
The issuer generates a unique card number and attaches the relevant controls, including:
Spending limit
Expiry date
Merchant restrictions
Spending category
User or requester
4. Payment
The employee enters the number at checkout or, where supported, adds it to a mobile wallet.
The issuer checks the transaction against the controls attached to that card.
5. Record and close
Where the programme supports these features, the platform records the transaction against the requester and can trigger related processes such as receipt collection.
The card can then expire after use or remain open for its next scheduled charge.
Some virtual card and mobile wallet systems also use tokenisation. The exact security technology and controls depend on the issuer and card programme.
Company credit cards versus virtual cards
The problems with a traditional company card can compound as headcount grows, particularly when one credit limit and statement must serve dozens of people.
Dimension | Traditional company credit card | Virtual card |
|---|---|---|
Card number | One number that a team may share and supplier websites may store | A unique number per purchase or supplier, depending on the programme |
Issuance | May require an application, credit assessment and physical card delivery | The issuer can generate the card digitally after approval |
Spending limit | A credit limit is assigned to the card and adjusted by the programme administrator | A limit can be set for an individual card at issuance |
Funding | Typically draws on a credit line and is settled later | Can use a bank credit line or a prepaid or debit balance |
Visibility | Transactions appear on statements and programme reports | Spend management platforms can associate transactions with a named requester as they happen |
Cancellation | Finance can cancel the card, with a physical replacement potentially required | An administrator can freeze or cancel an individual virtual card without replacing physical plastic |
Receipts | Finance may need to match receipts to transactions after the fact | Receipt capture can be connected directly to the transaction where supported |
The key difference is the ability to create individual cards for specific purposes rather than relying on a shared card number.
For finance teams, this can change the fraud question from:
“How much could we lose on this card?”
to:
“What did we cap this card at?”
It can also make reconciliation easier when transactions already carry information such as the requester, purpose, approval and receipt.
Fraud and security
Card-not-present transactions can create fraud exposure because card details may be stored across multiple supplier websites and systems.
For a shared company card, each website that stores the number creates another potential point of compromise. Virtual cards can reduce that exposure through controls applied before authorisation.
Single-use numbers
A card number can become unusable after the authorised purchase.
Per-card limits and expiry
Individual limits can cap how much can be spent, while expiry settings can reduce how long the credentials remain active.
Merchant restrictions
Where supported, transactions outside the intended merchant or category can be declined.
Instant freeze
An administrator can freeze or cancel an individual card without disrupting the rest of the team's spending.
Virtual cards can also improve accountability. When a card is issued to a named requester for a stated purpose, the programme can create a clearer record of who requested the spend and what it was for.
Spend visibility
Visibility can start when the programme creates the card rather than when the statement arrives.
Where supported, the platform can attach the following information to the card before the transaction takes place:
Requester
Purpose
Approver
Spending limit
Supplier
Budget
The transaction can then carry that context into the finance workflow.
Approving a card request before spend and reviewing an expense claim weeks later are fundamentally different processes. The first gives finance an opportunity to control the amount and purpose before money moves. The second records what has already happened.
Subscriptions show the difference clearly. A recurring SaaS charge on a shared card can become one line among dozens. Putting individual subscriptions on separate virtual cards lets finance apply individual limits and disable a card when it is no longer required.
Cancelling a card may prevent future card authorisations, but businesses should separately terminate any supplier agreement where required.
Convenience and efficiency
Traditional corporate cards can require applications, checks and physical delivery before an employee can start spending.
A virtual card can be generated digitally once the relevant approval and issuer requirements are complete.
This can reduce situations where a new employee pays out of pocket and claims the money back, or borrows a colleague's company card.
With a configured virtual card workflow, a manager can approve the request and the issuer can generate the card without waiting for physical plastic to arrive.
When someone leaves, an administrator can also cancel their virtual card without affecting cards used by the rest of the team.
Why switch to virtual cards?
Virtual cards move more spending controls to the point before a transaction is authorised.
Rather than investigating spend after it appears on a statement, finance teams can approve requests, set limits and review exceptions within the card workflow.
Common use cases include:
SaaS and subscription renewals: One card per tool, with its own limit and its own off switch.
Paid media and advertising accounts: A capped card for each platform rather than one shared card number.
Supplier invoice payments: Finance can issue a card for a specific supplier payment.
Contractor and new-hire onboarding: Give someone a card when they need it and cancel it when they leave.
Travel and event bookings: A card per trip or event rather than a shared company number.
One-off procurement and trials: A single-use card for an individual purchase.
What else changes when you switch to virtual cards?
Virtual cards can also reduce out-of-pocket claims and move budget checks earlier in the purchasing process.
When they are part of a wider spend management platform, the request, approval, payment and supporting documentation can form one connected record.
Fewer out-of-pocket expenses
An employee with an approved virtual card does not need to pay upfront and wait to be reimbursed.
Budget alignment at approval
The approver can review the request against the relevant budget before approving it.
A cleaner audit trail
The platform can keep the request and approval connected to the card, transaction and supporting documentation.
Control over later card charges
Cancelling a card can prevent later card authorisations. However, it does not itself terminate a supplier contract or payment obligation.
Single-use and recurring virtual cards
Use a single-use virtual card for a one-off purchase and a recurring card for anything that renews.
A conference ticket, one-time supplier order or ad hoc tool purchase can use a card that leaves no active number behind once the payment is complete.
Recurring virtual cards can stay open for a named subscription with a set limit, giving finance greater control over future charges.
Cancelling the card can prevent later card authorisations, but finance should separately end the supplier agreement where required.
Issue as many cards as you need
A spend management platform can let you issue separate cards for suppliers, subscriptions and projects.
This makes it possible to move away from one shared company card number and give different spending purposes their own controls.
Some virtual card programmes include unlimited virtual cards on paid plans, so issuing individual cards does not necessarily create an additional per-card cost.
For example, a company with 40 SaaS subscriptions could give each one its own virtual card instead of storing the same company card details across all 40 accounts.
Integrate virtual cards with expense management
A virtual card delivers more operational value when the card platform can send the transaction and its supporting records directly into the company's finance and accounting processes.
Connecting card transactions with purchase requests, approvals, invoices and receipts reduces the amount of information finance teams need to reconstruct manually at month-end.
Receipt capture at the point of payment can also allow finance teams to review transactions throughout the month rather than waiting until the close.
Where can you get a virtual credit card?
Virtual cards are available from traditional banks and spend management platforms.
The right option depends on factors including:
Your business size
Your eligibility
Whether you want access to a credit line
How much of the surrounding approval, receipt and accounting workflow you want the platform to handle
1. From a traditional bank
Several major UK and European banks offer virtual cards through their commercial and corporate card programmes.
These programmes are typically designed for business payments and may require:
Credit approval
An existing banking relationship
Additional eligibility requirements
Bank virtual card programmes can work particularly well for larger organisations that want supplier payments connected to an existing corporate credit facility.
For smaller and mid-sized companies that want employees to request and receive cards as part of their day-to-day spending workflow, a spend management platform may offer a more suitable approach.
2. From a spend management platform
A spend management platform provides virtual cards as one part of a wider spending workflow.
The platform can connect the card to the original request and approval, then associate the resulting transaction and receipt with the same record.
Spendesk is an all-in-one spend management platform combining:
Company cards
Expense management
Accounts payable
Procurement
Budgeting
For card spending, this means finance teams can keep the request and approval connected to the resulting card, transaction and supporting documentation.
Spendesk's smart company cards are prepaid or debit-based rather than credit cards. The company funds spending using money it has already placed in the account rather than drawing on a traditional revolving credit line.
Individual card limits then provide another layer of control over how much can be spent.
Paid Spendesk plans include unlimited virtual cards, so teams can create cards for individual suppliers, subscriptions, employees and spending purposes without a per-card charge.
Choosing virtual cards for your company
The statement does not need to be the first place finance encounters a card payment.
Creating cards for specific purposes can give finance visibility of the requester, purpose and spending limit before the transaction is authorised.
When the card is connected to a wider spend management platform, the request, approval, transaction and receipt can also form part of the same workflow.
A sensible place to start is by listing the suppliers and subscriptions currently charging a shared company card. Include:
Advertising accounts
Recurring software
Travel platforms
Supplier portals
Other regular online purchases
Together, these form the set of virtual cards you could issue first, as well as the shared-card exposure you could begin to retire.
If uncontrolled card activity is the problem, Spendesk's smart company cards can apply spending limits and approval rules before a transaction, giving employees a clear way to spend while finance retains control.
Frequently asked questions
Can you use a virtual credit card in a physical shop?
Sometimes.
Many issuers let you add a virtual card to a mobile wallet, which can make it usable at contactless terminals. Other providers restrict virtual cards to online payments and other remote channels.
Check your issuer's terms and wallet support before assuming that a virtual card can be used for in-person payments.
Are the funds on a prepaid virtual card protected like a bank deposit?
Protection depends on the specific product and its issuer.
It also depends on the issuer's legal entity and fund-holding arrangement, so no single universal rule applies.
Does Strong Customer Authentication apply to virtual cards?
Whether Strong Customer Authentication applies to a virtual card payment depends on factors including:
Transaction type
Card configuration
Issuer
Merchant
Jurisdiction
Requirements can vary between providers and payment scenarios. Businesses should check the guidance provided by their card issuer when setting up or using virtual cards.
Do all suppliers accept virtual card payments?
No. A supplier needs to accept the relevant card payment method for a virtual card to work.
Acceptance can vary between suppliers, payment channels and issuers. Some virtual cards are designed primarily for online and in-app payments, while others can also be added to a mobile wallet for contactless payments.
Before relying on virtual cards for a particular supplier or type of spend, check which payment methods the supplier accepts and which channels your card issuer supports.
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Maxime Reding
Originally from Luxembourg and educated at the Rotterdam School of Management, he brings a sharp analytical mindset and a background in strategic management to our finance team. Maxime joined Spendesk in 2021 and has grown steadily through the ranks since, becoming our resident finance engineer.
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