Due to the natural course of technological advancement in the business industry, one component of business payments that have become increasingly popular in recent years is virtual credit cards. It may be that you’re considering implementing virtual cards into your company or that you already have, and you’re just looking for tips on optimizing their usage.
Even if you already have the best business virtual credit card, are you using it effectively? In this business blog, we share all we know about virtual credit cards and how you can use them in your business.
What Are Virtual Credit Cards?
A virtual credit card works the same way as physical alternatives, i.e., plastic cards. The only difference is that virtual credit cards are digital and stored in your digital wallet, not your physical wallet or purse. You may be wondering about digital wallets and whether they are just for digital credit cards.
Digital wallets, also known as e-wallets, are essentially software programs where you can store, accept and pay using digital payments. Storing your digital currencies, for example. However, not all digital wallets are the same. Some can store many items like car keys, coupons, and ID cards, whereas other digital wallets are just for digital currencies.
When virtual credit cards are stored within your digital wallet, it could be a mobile app that allows financial transactions, just like a mobile banking app. This is where you can view your cards, see your payments, and top-up any money on them.
Benefits of Virtual Credit Cards
There are many benefits to using virtual credit cards, which may explain their rise in popularity throughout the business world.
One advantage is the speed of service. For example, you immediately transfer funds and payments. With your physical credit card, there is a delay in when you make a payment and when the transaction occurs, which can be frustrating if you want to use it for online purchases.
Also, virtual cards today can come with heightened cybersecurity, so fraud or sensitive data theft is much less likely.
Plus, the costs are lower than traditional credit cards, and tracking your spending is easier.
Virtual Credit Card Use In Business
When using virtual cards in your business, there are many things you can do to optimize their effectiveness, including:
- Fraud protection
- Manage spending limits
- Transactions transparency
Assigning virtual card numbers and locking them is a good security measure and fraud prevention feature. Other virtual cards can remain active even if fraud is detected on one specific card number.
Spend management platform
Using spend management software and virtual credit cards, you can set spending limits on each number. This will ensure any transactions which might exceed your established limit will be prevented, or an alert will be sent directly to you. Features like this will help you better control how your virtual cards are used and ensure you’re managing corporate spending much more successfully.
Maintain full visibility on all transactions
Visibility is also highly important when using your virtual cards, as it helps you have a clear picture of how much money is being used by each card and, in turn, what your business is spending as a whole.
With the right spend management software, you’ll be able to gain real-time data on every transaction in real-time including:
- How much was spent
- What the money was spent on
- The company that received the transaction
- Which card was used
Transaction data will help you maintain a keen eye on all your corporate spending, and you can adjust the controls on each virtual card accordingly, if necessary.
Another vital tip for using your virtual credit card more effectively is to ensure you – or your finance department – are taking advantage of any spending insights. These are often provided by your expert spend management software, and they’ll offer a detailed analysis of each transaction made with the cards and show you different ways you could optimize spending.
For example, you might find insights that show you a cheaper alternative to a transaction you made – such as paying for a Software as a Service (SaaS) subscription, for instance. This will help you stay one step ahead of all your payments and constantly evolve how you spend money to be more cost-efficient wherever you can get in your business.
Virtual credit cards are a great way to manage your company’s finances and keep track of where your money goes. They allow you to create multiple accounts and assign individual spending limits to each account. You can also use these cards to monitor your spending habits and prevent overspending.