At Payhawk, we're often asked, what exactly is a virtual card for business? Is it the same as Google Pay and Apple Pay? Well, yes and no. As consumers, many business leaders have experience with virtual payment methods, but they're still discovering the benefits of digital transformation when it comes to their business finances.
For a start, virtual company cards have existed for a really long time. In some sectors like travel, they have already become one of the primary means of payment.
There are several kinds of virtual cards across both business and consumer fronts, but there are three main types in general.
Types of virtual company cards for business
- The single payment virtual card. For example, this card is created for a specific vendor or amount; think digital gift cards.
- A virtual card that's connected to a physical card: in this example, your team members could all have access to a virtual card that's ultimately connected to a plastic or metal company card.
- Virtual cards with a dedicated budget, so you can assign funds to your marketing team for LinkedIn campaigns or to your product team for SaaS subscriptions, for example.
Now, you might be thinking: what's the difference between a virtual card and a digital wallet?
Often, virtual company cards don't have a physical carrier and can't be used in a regular shop. A virtual card is just a set of data (a card number, an expiration date, a security code, and a pin code) that you can apply to online payments.
However, thanks to digital wallets like Apple Pay and Google Pay, you can "carry" your virtual card in your phone and pay at shops and restaurants, etc., as long as they have up-to-date POS terminals.
The benefits of business digitization are huge, especially now, with distributed, hybrid, and remote working becoming the norm. Expense management software and company cards are one way your business can digitize its spend to empower your people all over the globe to pay for work necessities. But, what other benefits can virtual cards bring to your business?
Are virtual company cards more time and cost-efficient?
Virtual cards can be used when your team needs to make company purchases outside of traditional supplier invoice payments, especially when they need to make them quickly. Instead of asking your employees to wait for a plastic card in the post, you can issue a virtual card in one click and allow your team to spend straight away without interfering in their productivity.
Your accounts payable (AP) team will be liberated from a lot of manual work thanks to virtual company cards too. Instead of relying on cash or other payment methods, all the transactions are digitized, which allows your team to operate with less process and admin.
Virtual company cards also eliminate the whole employee reimbursement process, empowering your employees and giving more time back to your payroll and HR departments.
For each part of the expense management process that’s removed and automated, your business can save costs too. Work out your company's hidden payment and expense management costs here.
Virtual cards are lower risk
At Payhawk, we offer virtual cards for businesses that aren't directly linked to your primary corporate bank accounts. Instead, the virtual company cards are connected to a virtual wallet, so your information isn't at risk. Adding these cards to your e-wallet via Google Pay or Apple Pay adds another layer of safety.
Another security feature includes the virtual card number itself; thieves and scammers can't trace a virtual credit card number unless the cardholder's identity or actual credit card has been identified. This security measure prevents theft of personal information and its possible misuse.
Finally, virtual cards also have a minimum and maximum credit limit per transaction each day, and they're only valid for a specific period, identified by the card issuer. Meaning end-users who identify suspicious activity on their cards can block them immediately online.
Less plastic, more sustainable
A couple of years ago, an environmental study from WWF International mentioned that people worldwide could be ingesting five grams of microscopic plastic particles every week, the equivalent weight of a credit card.
The environmental impact of plastic pollution is well known, and researchers mention that consumption changes can help diminish the effects. One simple way could include introducing virtual company cards at your business.
Budget accuracy and transparency
Virtual company cards allow you to manage spend limits in real-time. Breaking up your budget and allocating it via different virtual cards quickly and efficiently is way better than dealing with multiple payment accounts. Also, you can track all transactions and add spend control policies to each of the cards, so you don't have to worry about overspending.
While there are a lot of great benefits to virtual cards, there are a couple of issues to consider. For instance, sometimes vendors don't accept virtual card payments if they use an old POS terminal. Or, you might find that your virtual card for business isn't connected to the appropriate ERP or accounting software, for example. For Payhawk customers, this isn't an issue as we integrate with several accounting and ERPs systems, so there's no extra work required for your finance team or end-users.
If you like the sound of virtual company cards, book a demo now, and find out about our other features and how they can transform the way you manage payments and expenses in your business.