How to apply for a virtual credit card for your business?
With the rise of technological inventions and the increasing dependence on tech solutions for faster results, the need for more advanced and better systems is overgrowing. The business world is no different.
Especially after the pandemic, the requirement for automation and intelligent tech tools has risen. This is because all the organizations have to put some parts of their operations on autopilot so that other important ones can be taken care of with more human intervention.
One such great innovative solution is virtual credit cards.
What is a virtual credit card?
Virtual credit cards are the non-tangible versions of a standard physical credit card. Businesses apply for a virtual credit card to enjoy the added security and seamless connectivity benefits of these cards.
Just like selling, making payments is also an important business function that requires a whole team of employees, meticulous planning, and tech-induced functioning for a smooth payment flow.
Why virtual credit card is important for business?
Streamlined AP
Virtual credit cards allow businesses to make digital payments without any hurdles. This means once your invoices are processed, you can make payments to your vendors with just one click.
With virtual credit cards, your AP team would not have to run around to get cheques signed or cash personally delivered. This is an efficient way to make vendor payments, and the need to manually maintain a record of the payments is also eliminated.
Plus, virtual cards and digital payments are accepted worldwide; no acceptance errors. Ultimately the whole AP workflow of your business gets streamlined.
Better accountability
By using virtual credit cards, your employees would not have to go back and forth to collect receipts or run behind people to complete their submissions or claims. All this is required for the reconciliation and bookkeeping procedure.
When your business gets virtual credit cards, those can be assigned to different employees, departments, projects, managers, etc. This helps in keeping track of who makes which payments. Meaning all the payments are tracked, and the record is updated in real-time.
So, it becomes easy to browse through and find out which payment was made by whom, when, and the purpose. Hence, overall accountability effectively increases.
Enhanced security
Virtual credit cards are basically digital versions of the usually tangible credit cards we use. If your business gets virtual credit cards, the significant benefit that it entails is the next level of security. Virtual credit cards have a valid 16-digital number, but this number is different from the actual physical card’s number.
Plus, businesses can set limits on card spending, which would prevent any overspending. Moreover, with the real-time expense tracking feature, no transaction can go unnoticed.
Mostly, virtual credit cards are connected to some management system that allows the card owner to quickly block or freeze the card whenever any fraud is detected.
Reduces the burden of reconciliation
By getting virtual credit cards for your business, your finance team would not have to worry about referring to individual statements or other accounts statements.
As all transactions get automatically recorded, which also means that the employees are free from the duty of checking the history of all expenses.
If your virtual credit card is connected to an automated expense management system, the benefits double. All the expense matching and documented reconciliation for the transactions are automatically done.
Make vendor management easier
Vendor management becomes much more straightforward with virtual credit cards. Businesses can internally assign virtual credit cards to specific vendors.
So, whenever a payment to, let's say, your raw material vendor has to be made, you can use the specific card assigned to that vendor and make the payment.
With this, there is no mix-up between different vendor payments and no overlaps. Hence, all vendor payments are adequately separated and recorded, which makes the reconciliation and accounting processes proper.
Simple and quick payment option
The primary purpose of getting a virtual credit card is to get the ease of making a quick payment. Virtual credit cards enable businesses to transfer money from their bank accounts to the receiver’s bank account without having to hand out cash physically.
Plus, a virtual credit card comes with a certain spending amount provided by the lender or provider.
This means that the business can spend up to the borrowed amount and then pay it back with interest at the end of the month or the end of the payment cycle.
How to apply for a virtual credit card in India?
1. Check your eligibility
Step one to applying for a virtual credit card is checking and matching the eligibility criteria. Check if your credit card provider also provides virtual credit cards. If yes, then go through their eligibility criteria list.
Along with all the traditional requirements like minimum revenue generation, cash flow levels, payback capacity, etc. Some banks or providers also look at business size, put a mandate to purchase one physical credit card to get virtual credit cards, etc.
2. Compare all the virtual credit card options available
There are various virtual credit card providers in the country. Your business can get virtual credit cards from banks like SBI and HDFC, or you can go for other providers like Volopay.
VCC given by banks is linked to your actual physical credit card. The same goes for Volopay.
These cards aren’t directly linked to your bank account. Plus, virtual corporate cards given by Volopay come along with many spend control features and a comprehensive dashboard that provides all transaction-related information on the spot in real-time.
3. Prepare your applications and submit them to your card provider
To apply for a virtual credit card in India, your business has to be sure to have a few documents in place. Also, ensure that the application is submitted on time. The required documents for a virtual credit card are as follows:
• Identity proof of the business owner/stakeholders and signature. These proofs must be official government-accepted documents or ids like Adhaar cards, driver's licenses, PAN cards, passports, voter IDs, etc. The signature of the owners and stakeholders are matched against these ID proofs.
• Address Proof of the business owner. You need to have official documents stating your address, and the identities submitted can be used as backed-up proof to check the authenticity of the details in the application.
• GST certificate & GST number of the business. Every tax-paying business in India is given a GST certificate and number that needs to be mentioned in the process of applying for a virtual credit card.
• CIN Number. When your business gets registered with the Ministry of Corporate Affairs (MCA), a unique CIN is assigned to every business. You can get MCA registered through the Registrars of Companies (ROC).
• Bank account statements for the last 6 months. This statement is required to check and analyze the business’s spending patterns and capacity.
4. Wait for card issuer’s decision
Once you submit all the required documents within the given time frame, all you have to do is sit and wait for the card issuer’s decision.
Looking for virtual cards to manage your business expenses?
Factors to consider when you apply for a virtual credit card
Business requirements
Naturally, you would only be able to get the virtual credit card for which your company fulfills all criteria. So before filling out any form to apply for a virtual credit card, consider all the requirements and eligibility bases.
If your company checks all the boxes, then fill out the application. While choosing a provider, you must also assess your business’s needs.
Research the features and controls offered by various VCC providers and then pick the ones which are most suitable to solve your challenges. These issues can vary from poor spending management to better security tools.
Suggested read: 5 best virtual credit cards for businesses in 2024
Interest rates and charges
While deciding which virtual credit card to choose for your business, look out for interest rates and repayment cycle.
Why would you want to pay extra interest or charges when you might get almost the exact features for a little less?
Hence, after prioritizing your pain point and issues that need to be addressed by getting a virtual credit card, browse around to find that virtual credit card that would solve your challenges at a lesser interest rate and also provides a flexible repayment cycle.
Ease of applying
Online applications where you just have to fill in your basic information and the rest of everything can be dragged and dropped into the required fields is the easiest way to fill out an application.
Why would you want to sit through hours filling out an application, wait in lines, or for your turn to get your form in?
Hence, look for a virtual credit card provider that allows you to apply for a virtual credit card online. Or the best would be to get a platform like Volopay. *Once you have a Volopay business account, you can instantly create virtual cards and use them immediately.
*Terms and Conditions applied
Spend tracking and analytics feature
Whichever virtual credit card you choose, ensure that it provides your business with advanced spend tracking and analytics features.
Features like spending limits, real-time transaction updates, and approval workflow to let an expense go forward are essential for seamless control over your business expenses.
Along with this, analytical tools like expense reports, transaction detail reports, spending patter, or performance analytics dashboard is a plus for the company.
Integration feature
One of the essential features of a virtual credit card is integration flexibility. The virtual credit card your business decided to operate with must integrate with other systems or solutions.
This can be accounting software, ERP solution, scheduling, or other spending platforms. A closed virtual credit card limits your ability to reap maximum benefits from the card.
Card security
The primary reason businesses get virtual credit cards is security. Your virtual credit card must have all the features or tools to prevent unauthorized transactions or fraud.
The card should centralize all your expenses and give your employees access to the company funds but only with transparent spending visibility.
Along with this, features like freeze or block from the mobile app and rejection of expenses should be considered.
Support
Last, but not least is the requirement for customer support. Your virtual credit card provider must be able to help you during crisis situations.
This means their customer support has to be quick and active at most times. If not personal human support, for some situations, a bot customer support would also do.
Why Volopay virtual cards are the best option for businesses
Virtual cards have revolutionized the way businesses make payments. However, different providers offer different features in virtual credit cards.
The best for your business would be the one facilitating string spend controls and supporting an overall expense management workflow.
To get your hands on such a card, get Volopay. Following are the virtual card features offered by Volopay:
1. Automated accounting
Volopay virtual cards have an in-built integration with accounting automation software. Hence, all the transactions made through the card are automatically reconciled and updated in the accounting sheet under the correct categories.
The category bifurcation is done with the auto-categorization and expense mapping rules.
2. No hidden charges
Volopay does not charge you a dime to get virtual cards. If it is a virtual debit card, there is absolutely no charge; you can create as many as required.
3. Unlimited virtual cards
Once you get a Volopay business account, you get the facility to create unlimited virtual cards. This means you can assign individual virtual cards to employees, projects, departments, vendors, etc. This way, all your expenses stay separate, and reporting is simple.
4. Cheaper FX rates
Volopay virtual cards gives its users the feature to make international transfers. These international transfers are made at a competitively cheaper FX rate than the market. So you don’t only get efficiency, you also get the benefit of saving money by using Volopay virtual cards.
5. In-built spend controls
To provide users with seamless expense control, Volopay offers in-build spend controls. Such as card spend limit, approval for expenses, compliance with budget, rules for making spends, etc. Using these, you would not have to worry about overspending or unnecessary expense undertaking.
6. Spend analytics and real-time tracking
Volopay virtual cards are connected to the Volopay expense management platform with a comprehensive dashboard. This dashboard provides extensive spending analytics and reports. You also get a real-time tracking feature. So all the transactions made through the card are instantly tracked and recorded in the system.
7. Card security
Volopay virtual cards are embedded with various features to provide high-level security.
For example, the 16-digit virtual card number is different from the actual credit card number, insistent freeze, or block card, plus the card is not directly connected to your bank account.