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Using Virtual Credit Cards In Your Business

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virtual credit card payments

For decades, businesses have used credit cards to fund investments and pay for expenses.

Today, entrepreneurs of new startups may use their personal or business credit cards if they have one to manage shortfalls in cash flow.

In 2022, 29% of businesses applied for funding via business credit cards, according to Forbes Advisor.

Today, the business credit card is more likely to be a virtual credit card than a physical one.

Virtual credit cards are a game-changer for businesses, including how they manage expenses and spending.

Are you considering virtual cards in your company, or do you have them but need tips on using them effectively?

This business blog shares 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 like 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

Digital wallets, or e-wallets, are software programs where you can store, accept and pay using digital payments. Keep your digital currencies, for example. However, not all digital wallets are the same. Some can store 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. You can view your cards and 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.

Speed of Service

One advantage is the speed of service. Virtual credit cards can be generated and issued quickly, allowing businesses to respond promptly to changing needs or unexpected expenses.

Additionally, virtual credit cards often facilitate faster payment processing than traditional methods. This can be particularly advantageous when dealing with time-sensitive transactions or taking advantage of early payment discounts offered by vendors.

For example, you immediately transfer funds and payments. With your physical credit card, there is a delay between 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.

Virtual credit cards offer an extra layer of security compared to physical credit cards. This is because they are typically single-use or limited-use cards, reducing the risk of fraudulent activities. This feature can be especially valuable for online transactions or when dealing with unfamiliar vendors.

Tracking and Reporting

Virtual credit cards often come with robust expense-tracking tools and reporting features. Businesses can easily monitor and categorize transactions, helping them gain insights into spending patterns and identify areas where costs can be optimized.

Integration with Accounting Software

Many virtual credit card providers offer seamless integration with accounting software. This simplifies the reconciliation process as transactions are automatically recorded, reducing the need for manual data entry and minimizing the chances of errors.

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

Fraud protection

Assigning and locking virtual card numbers is a good security measure and fraud prevention feature.

Businesses can issue virtual credit cards specific to particular vendors or projects. This helps quickly identify and track expenses related to a specific supplier or project, streamlining the reconciliation process.

Other virtual cards can remain active even if fraud is detected on one specific card number.

Spend management platform

You can set spending limits on each number using spend management software and virtual credit cards. This will prevent transactions exceeding your established limit, or an alert will be sent directly to you. Businesses have better control over how virtual cards are used and by whom.

Maintain complete visibility on all transactions.

Visibility is also critical 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, 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.

Spend insights

Another vital tip for using your virtual credit card more effectively is ensuring you – or your finance department – are taking advantage of spending insights. These are often provided by your expert pay 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.

Summing Up

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 performance. You can also use these cards to monitor your spending habits and prevent overspending.