A virtual card can improve the security of account holders when shopping online. Virtual credit cards are similar to real credit cards, but they offer additional protection and security by preventing sensitive data from falling into the hands of criminals.

What is a virtual card?

As the name suggests, virtual cards are a debit or credit card that are created entirely online. They are a randomly generated 16-digit number, complete with a card verification number and expiration date. They behave in the same way as traditional credit and debit cards - without the need for a physical card. They are issued by Mastercard or Visa and American Express and are accepted wherever credit cards are normally accepted. The difference between these cards, however, lies in their operation and ease of use.

Virtual credit cards streamline payment processing for both vendors and suppliers, and there are a number of compelling benefits for your business.

How does a virtual card work?

With online shopping, the use of digital payments has increased dramatically. At the same time, online banking is becoming more popular and banks are also adapting to the digital payments revolution. They have made it so easy to transfer money just by using a smartphone. Virtual cards work behind the scenes as a digital payment method, providing you with a secure payment option while protecting your data from compromise.

Virtual cards increase payment security

A virtual credit card is used only once and has precise security mechanisms such as usage data, usage types and available amount. Therefore, using a virtual card for business transactions keeps cybercriminals out of your wallet and helps prevent fraudulent activity on your accounts. In turn, as cybercrime increases worldwide, cybersecurity must become an immediate priority for businesses that rely on secure virtual money exchange on a regular basis.

Virtual cards offer an ideal way to protect your business accounts.

Virtual cards simplify supplier payments

Visibility into spending is critical to controlling costs, negotiating discounts and optimizing cash flow for businesses. Virtual debit cards attach payment data to the credit card number transmission, allowing both buyer and supplier to locate a transaction with the exact date, amount, buyer and item. This allows accounting departments to automate the reconciliation of expenses and free up time to analyze the valuable data collected. Identifying trends and anomalies enables companies to better plan spending, expertly negotiate contracts with high-frequency vendors, and avoid wasteful spending.

Virtual cards save money on accounts payable

Because virtual debit and credit cards streamline payment processing, companies that adopt virtual payments reduce the time spent on manual processes, allowing their staff to focus on strategy and analysis.

Companies that adopt virtual debit cards will realize both productivity gains and savings. With a virtual card, your suppliers can receive your payment in real time. It also delivers payments to vendors in a more efficient and timely manner and reduces human error associated with paying by check. In addition, many virtual payment programs come with a discount that turns a cost center into a profit center.

How do I choose a virtual card provider?

If your business needs virtual cards, look for a provider that offers flexibility and security. With the best virtual card platforms, you can configure credit, implement spending controls and assign authorization to each transaction. Payments are critical to your business operations. Therefore, choose a company that is stable and can scale as you grow. The best providers delve into understanding your operations and goals and maintain a consultative approach to help you optimize the program for the life of the solution.

Easy to create and use

Previously, digital cards were only available to large businesses, but with recent advances in fintech, these products are now available to everyday businesses. Companies like FINOM allow small businesses to create virtual cards in seconds. All you need to do is set up a FINOM account (which you can do entirely online). You can start creating it for your business in 5 easy steps. With digital cards, you can pay anywhere in the world using Google Pay or Apple Pay. Instead of relying on your bank, make contactless payments. You can choose the currency you want, set a spending limit for the card, and define the types of merchants where the card can be used.

One of the biggest issues with corporate cards right now for finance teams is the time it takes to find the owner of the transaction to help reconcile or collect receipts. The typical finance professional may have to track multiple people just to understand what the transaction was for.

With FINOM virtual cards, you can assign the card to a specific person, a specific or department (up to 50 cards). Moreover, you can also block the free credit cards online at any time. This will allow your company to easily allocate expenses to the right account quickly and also identify the right people to request receipts for specific transactions, saving a lot of time.

Conclusion

Although there are some reasons why you may want to avoid using virtual credit cards, consider the benefits of this payment method. Not all credit card companies offer this service, so it may be worth considering if you're looking for a new card. With the increase in fraudulent online activity, few people will resist a method that can help protect their money and their account.