Credit cards frequently get a bad reputation due to the possibility of loss or misuse. With the rise in online payments and growing security concerns, virtual credit cards are ushering in a new way of making payments.
Are you tired of sharing physical card information with recurring vendors? Do you want to mitigate the risk of fraudulent activity on your card? Then, use a virtual card to avoid the above situations.
According to Juniper Research’s report, virtual card spending is predicted to grow from $1.9 trillion in 2021 to $6.8 trillion by 2026. This means that virtual cards are taking over the finance and business world.
Let’s understand the concept of virtual credit cards and why businesses should use them for security and strategic spending.
What is a virtual credit card?
It is an online credit card with no physical existence, and all relevant details (card number, expiry date, and CVV) are found online. Virtual cards can be secured by encryption and be used to pay online or offline.
Virtual credit cards are add-ons to existing credit cards. You can get it from a net banking facility with a few clicks. Once generated, they are available for immediate use.
There are multiple benefits of using them, let’s explore these benefits.
5 Reasons Your Business Should Use Virtual Credit Cards
Virtual credit cards are the new sensation due to their secure nature. They can help you streamline and better manage your payments. So let’s explore their benefits and how they can impact your business.
1. Protection from fraud and threats
Virtual credit cards offer more protection from fraud as there is zero chance of revealing sensitive bank details. The 16 digits of the card are unique, and you get one-time use bank credentials. This way, you can share the CVV, card number, and expiry date without sharing your physical card details.
Moreover, the validity of every transaction is 48 hours. You can also set spending limits to prevent yourself or fraudsters from overspending.
It also gives you protection in the form of a hassle-free card cancellation process. If you are suspicious of fraud, you can quickly freeze or cancel the payment through any net banking facility. Plus, there is no waiting period for a new card.
2. Cost-saving and more convenient
Virtual cards are issued at zero cost, and you can get one for free without paperwork.
If you don’t have a credit card, you can avail of a virtual card on your debit card or bank account. You can select an amount from your bank balance that will be transferred to the virtual card. Credit card holders can get it without paperwork. While traditional cards have fixed spending limits set by the bank, virtual credit card holders can customise spending limits.
You can terminate the card without hampering your bank account activities in case of foul play. On the other hand, if you have to close your primary bank account due to fraud, you can continue using the virtual card.
3. Helps manage expenses of the business
Keeping track of expenses is an enormous task for both large and small to medium businesses. But virtual credit cards will help you manage your expenditure.
For better allocation of funds, you can provide a different virtual card to each team in your company. This ensures greater transparency and makes it easy to record or manage transactions.
Additionally, you can get a separate card for every transaction to better manage spending data. Virtual cards offer considerable control, such as a unique card number and spending limit, and allow one-time use.
4. Gain control over vendor payments
Businesses that regularly pay vendors or enter new partnerships can control their card information with the help of virtual credit cards. Companies using physical cards to pay for recurring payments compromise their card information, as leaks or misuse are more likely.
To avoid this situation, you can set up a separate virtual card for each vendor or supplier. Then, you can lock or unlock the card whenever you make the transaction. This way, even if the card is compromised, your business functions will continue to run smoothly.
5. Organise business processes
You can use virtual cards to organise your spending according to your business goals. For example, instead of assigning a separate physical card to each department, you can give them a virtual credit card to manage departmental spending. This way, you’ll know which department spends how much and on what transactions.
Virtual credit cards offer several benefits over physical credit cards. Virtual cards can protect your business from fraudulent activities, save costs, manage business and employee spending, and control vendor payments. Hence, they have a promising future and will gain popularity in the upcoming years.
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