Virtual cards replace your credit card in a virtual form rather than a physical one. When using a virtual card, you’re given a unique number to share with businesses instead of your actual credit card number, effectively protecting your privacy. It’s common to use a 16-digit number and three-digit CVC in this context.
Virtual cards are a relatively new payment method but have gained popularity in the last few years for business owners who want to streamline B2B payment processes. A lot of the reason for such widespread adoption is the rise of mobile device usage, which makes sense in the modern digital age. There was also a digital shift in mid-2020, where concerns over the COVID-19 pandemic drove the need for digital transactions. For example, 64% of B2B buyers expect the ability to pay for their purchases online, according to data reported by PYMNTS. Here’s why virtual cards help streamline B2B payments and why you might consider
1. Enhanced security
Enhanced security options are the biggest draw for virtual cards, with national fraud reaching new levels of up to $25.6 billion annually. When you use a traditional credit card, you expose personal information, including your name, address, credit card number, and security code. If you regularly do business with a specific corporation, this sensitive information is likely stored in their database, making you vulnerable to hackers. Virtual cards are one of the best solutions for fraud because they don’t contain any hard data, and their set limits avoid overcharging.
2. Streamline AP processes
Incorporating virtual cards into AP payments is a smart idea because they work well with their existing accounting and ERP systems. This ensures smooth B2B payments without significant delays or other inconveniences. Virtual cards also benefit working capital since the payments are completed instantly. AP teams can hold onto cash for extended periods and optimize Days Payable Outstanding.
3. Avoid excessive paperwork
Virtual cards make it easier to streamline a transaction than accounting staff waiting to print, sign, and mail paper checks to multiple locations. Plus, business owners who use virtual cards enjoy rebate benefits if they use them often enough. A common rebate opportunity is 0.5 cashback on all virtual card payments, which increases over time.
If you have any questions about streamlining B2B payments, visit my website or call 617.843.5700. I help small to medium-sized business owners drive down payment costs to enjoy perpetual savings. I’d love to help you hit your goals.
