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What is a virtual credit card?

See the keys to this new technology and find the perfect virtual cards for your business.

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Unlike traditional credit or debit cards, virtual bank cards are created online for one-time or recurring use. They're usually prepaid with a specific balance determined by the cardholder.

Virtual cards exist exclusively online which make them accessible from anywhere, while reducing the risk of fraudulent purchases. They contain the same card details as their physical counterparts: card number, expiration date, and security CVV code.

Centralized control

When your online purchases and company expenses increase, so does your risk of experiencing credit card fraud and security breaches. With virtual cards, you get full control and visibility over all your company spending.  

With a virtual card provider and complete spend management tool like Spendesk, you can set spending policies and approval workflows, automate reporting and accounting tasks and track every transaction in real time.

How do virtual cards work?

Unlike a physical bank card which has a static card number, expiration date, and security code, virtual credit cards are generated with different card details every single time you want to use one for a purchase. 

Once you reach the checkout step of an online payment, enter the unique credit card information generated by the card issuer for one-time or recurring use. The purchase detailswill be logged into your connected spending app or dashboard, depending on which card provider you are using.

Virtual company cards simplify online spending on:

  • Subscriptions and renewals of SaaS software

  • Business trip expenses such as accommodation, car rentals, and travel

  • Miscellaneous expenses like office supplies, event fees, etc.

Recurring vs single-use cards

Virtual credit cards come in two main varieties:

  • Single-use cards work for one-off payments. Amazon purchases are a good example. These cards can only be charged once and then cease to work. 

  • Recurring (or subscription) cards can be charged multiple times, but only by the assigned vendor and for the amount specified. Spending over that amount is impossible unless the settings are changed by an account admin. 

Most startups use more than 50 paid SaaS services and managing all these subscriptions across different credit cards can be a nightmare. Even for companies that use SaaS management platforms to manage their yearly subscriptions, there can still be wasted budgets due to poor visibility over recurring payments. 

With recurring payments made using virtual cards, you can manage all your subscriptions in one place by pausing or deleting a card at any time, while allowing your other subscriptions to continue. This simplified process helps:

  • Avoid going over budget on softwares that aren't actively used

  • Enable easy tracking of ongoing subscriptions that need to be canceled or renewed

Recurring cards still have unique virtual credit card numbers and expiry dates - no two recurring cards are the same. So you're still in complete control and have total security.

Key benefits of virtual payment cards

Reduce risk

Shield your company from internal and external fraud and abuse virtual cards generate single-use credit card numbers that are effectively impossible to duplicate and hack. 

An additional layer of security: virtual cards' pre-set balances are not connected to your company's bank account. 

Use easily

Say goodbye to slow onboarding and confusing technical set-up. All teams and employees can request and use virtual cards in seconds, with no special training required. Virtual credit cards work just like traditional corporate cards, including for purchases with Amazon, Google AdWords, Facebook advertising, and anywhere else you regularly spend online.

Boost productivity

No more asking around who has the company card or where it was last seen. Save time and money by eliminating manual exchanges and lengthy approval processes. Employees and managers can focus on core tasks, without wasting time on admin tasks.

Monitor spend

Online and offline transactions are displayed in real time in the spending dashboard. As a manager, you can limit the balance that cardholders can set on their individual virtual cards.

Benefits for finance teams

Sharing your company's actual credit card details over text message or email is an outdated and unsafe practice. Virtual cards remove this risk and protect your company against data breaches and unauthorised charges. 

Virtual payment services enable finance teams to:

  • Control the spending limits of different teams across their company or organization without any micromanagement.

  • Eliminate tedious manual calculations, every payment is logged and tracked automatically.

With tangible benefits of increased accessibility, safety, and efficiency there's no surprise that more and more companies are swapping out physical credit cards for digital wallets. 

Benefits for employees

It's never been so easy to distribute and use company cards. Virtual cards are as easy and quick (if not quicker!) for employees to use as physical cards. 

Companies can easily choose the card provider of their choice for employees. There are countless options available on the virtual market, including Mastercard, Visa, American Express, and Discover. 

Employees can instantly make hassle-free purchases with online retailers, using virtual cards that have been pre-approved by managers or the finance team. 

If you have employees traveling on the road for work, you can issue each of them their own unique virtual card and automatically collect receipts using an integrated app like Spendesk.

Virtual credit and debit cards give employees the freedom and accountability to make their own choices when it comes to company expenses. Empowering your workforce to make independent financial decisions also increases transparency across internal communications and how the company manages finances.

Ready to make the switch? 

Try out Spendesk's virtual cards and all-in-one spend management solution today. Make life and spending easier, smarter, and safer for your managers, employees, and finance teams.

Take back your time and get real control

Make the switch to smarter company spending today.

Empower your team to make faster decisions

A simple and effective spending process that works for everyone at your company.

Last update: August 16, 2021