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What is a Virtual Credit Card? 3 Things You Need to Know

Credit Card

Estimated reading time: 4 mins 

Imagine hearing about a major financial breach at another company but knowing this isn’t likely to happen to you. Suppose your finance team has already been trained to catch suspicious emails, or you have a tool to flag fraudulent payments (even when your team is working remotely).

The relief of knowing your financial gateways are secure during a crisis can help CFOs focus elsewhere. Right now, one of the biggest financial risks is credit card fraud. One research study found 9,708 instances of compromised credit card data in only the first quarter of 2019. This was a 212% increase year-over-year. 2020 is no different – the dollar volume of fraudulent credit and debit card fraud reportedly leaped by 35% year-over-year in April. When the economy is in a vulnerable state, it only makes sense to raise our defenses. One of the defenses available today that many organizations still aren’t taking advantage of are virtual credit cards – an automated payments system providing single-use card numbers for robust security. When your company chooses to implement or extend your AP automation solution to include virtual credit cards, you’ll find there’s a whole new world of benefits to be gained.

What is a Virtual Credit Card?

A virtual credit card (VCC) is a unique number generated automatically during a transaction. Vendors will process a virtual card the same way they would process a regular credit card, but without seeing the physical card number. Research indicates a strong spike in businesses using virtual credit cards. In 2018, VCC initiated purchases accounted for 169 billion; this number is projected to reach $355 billion by 2022, according to Accenture.

Virtual Credit Card

What are the benefits of a Virtual Credit Card?

The pandemic has challenged the popular belief that payment processes only need to be completed from an office building. Despite remote work, paper invoices and checks continue to run through mail boxes except now you have to make the trip to the office to collect them. Here, we’ve outlined the top three ways businesses can benefit from virtual credit cards and make remote payments transparent and accessible.

  1. Stellar security features that protect your business:  Credit and debit card fraud is a major concern for businesses globally, with fraud losses topping  $27.85 billion in 2018, up from $23.97 billion in 2017. As a measure of protection against the perils of card fraud, virtual credit cards offer businesses a set of unique security features that can effectively combat the risk.
  2. Full integration with your accounting system: The key to an efficient accounting workflow is in the integrations, and the most comprehensive workflow will include a fully integrated payments process. With virtual credit cards, payments can be approved and released to vendors directly from within your accounts payable automation software.
  3. Cash-back rebates that can earn you money: When it comes to revenue-generating accounting activities, accounts payable has never been high on that list. But virtual credit cards actually make it possible to make money through cash rebate programs, offsetting the costs of AP automation. And unlike points cards, these rebate programs will earn your business cash back on a monthly basis.

How to get a Virtual Credit Card for your business

The process of getting a virtual credit may differ depending on the provider, but the process is fairly quick and simple. You can get a virtual credit card through a:

  • Bank: You can either obtain a new card number for every transaction, or a separate number for each merchant which stays the same over time. Banks offering VCC services include, Mastercard, Visa, and American Express.
  • Automated payments software: The software will automatically create a unique VCC number for every transaction. Most payments solutions will integrate the entire AP workflow – from purchase orders to payments – with your accounting software and offer other payment options such as ACH, EFT. Beanworks and Nvoicepay are examples of automated payments providers for businesses.

Companies of all sizes will gain peace of mind from the security and efficiency advantages that come standard with virtual credit cards while capitalizing on an untapped revenue stream through cash rebates. Our white paper, Does Your AP Automation System Pay for Itself?, covers the benefits and challenges associated with virtual credit cards while providing the tools you’ll need to get your business set up with this payment type.

Getting started with Virtual Credit Cards


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