12 key virtual card use cases for businesses
Given the convenience that virtual cards provide, it’s no surprise that it’s rapidly growing in popularity as a payment method. Managing your subscriptions to making travel bookings, making, controlling, and tracking business expenses is easy with a virtual cards.
Compared to their physical counterparts, virtual debit cards have the same unique card number, expiration date, and CVV. The biggest difference is that virtual cards only exist digitally, meaning that you won’t have to carry around a plastic card to make your payments.
Instead, you can input the randomly generated 16-digit number linked to your card in digital wallets or payment gateways and make your transactions that way.
What are the business use cases of virtual cards?
1. Supplier and vendor payments
You can make supplier and vendor payments faster with virtual cards. With more and more suppliers accepting card payments, you’ll find that you can pay your suppliers on the go and ensure that all payments are made on time. Having vendor-specific cards also allow you to manage and track your expenses better.
Explore our insightful article on vendor payment automation to know the ways to streamline your vendor payment processes and enhance efficiency and maximize cost savings.
2. Procurement
Using virtual cards eases a lot of the manual work done by your procurement team. From simplifying vendor management and cutting back on the manual onboarding process to automating recurring vendor payments, you can save time while maintaining good relationships with your vendor.
Unlock the secrets to streamlining your procurement process and drive business success. Dive into our article on procurement process to know the strategies that will help you optimize efficiency, reduce costs, and enhance supplier relationships.
3. Travel and entertainment expenses
Instead of waiting for your employees to submit reimbursement claims post-trip to see how much they’ve spent, you can set pre-approved amounts in the form of virtual cards for your employees to use.
Your virtual cards can be used to book transportation and accommodation, along with other online or in-store (via digital wallets) T&E expenses.
4. Subscription services and recurring payments
The problem with relying on one physical card to take care of all your subscriptions and recurring payments is that should your card be compromised, you’ll lose access to all scheduled recurring payments.
With virtual cards, you can assign each payment a specific card, allowing you to manage your subscriptions and recurring payments better.
5. Corporate gifting
If you want to show a client appreciation, you can generate a one-time use virtual card and set a limit according to the value you’d like to gift the client. This can be used like you would a gift card by letting them know the card information. The client can then use it to make expenses.
6. Online and e-commerce purchases
Online and e-commerce purchases are perhaps the expense category most commonly associated with virtual cards and it’s for good reason.
You don’t need a physical card to make your online purchases. It’s a better idea to use a single-use virtual card. This way, merchants won’t be able to store your card data.
7. Marketing and advertising expenses
Tracking all your digital marketing ad expenses can be difficult, especially when you run them on multiple platforms.
By generating virtual cards for each individual ad campaign, however, you’ll be able to easily tell how much money you’ve spent on each campaign in just a glance. Have dedicated virtual cards for every platform you’re on.
8. Employee training and development
Enroll your employees in training and development sessions and courses while managing training expenses with your virtual cards.
Signing up your employees for a course is hassle-free when you can book slots and make your purchase in just a few clicks. With a dedicated card for it, you can also track how much you’ve spent on training and development.
9. Office equipment and maintenance expenses
Your virtual cards can be used to purchase office supplies and equipment and keep them well-maintained. This is especially true if you purchase your office equipment from e-commerce sites—which are rising in popularity for B2B purchases.
Create a card specifically for office equipment and maintenance and log all expenses in the category under that particular card.
10. Petty cash management
Long gone are the days of handing your employees petty cash to make small everyday expenses. You can assign a virtual card to an employee and set the card limit according to how much money you want them to spend. While petty cash can be difficult to track, virtual cards provide you with a safer and more visible alternative.
Related read: Petty cash book - Format, types, operation, and advantages
11. Cross-border and international payments
Instead of having to rely on costly international wire transfers, virtual cards enable you to easily make international payments.
Whether these transactions are to overseas suppliers or for overseas travel expenses, you can bypass the long wait times and costly fees of international wire transfers by switching to your virtual cards as a payment method.
Explore our insightful article on cross border payments to know how cross-border payments work for businesses in India and what are the associated regulations and guidelines.
12. Project-based payments
Your employees may get involved in short-term projects consisting of a team from different departments. Budgeting for and managing these projects can be difficult, especially if you’ll need to borrow cards from different department managers. A better solution is to generate a virtual card to be used for all payments in relation to the project during its duration.
Get greater control over your expenses
Benefits of using virtual cards
Expense management
You and your employees won’t have to worry about tedious reimbursement processes.
Instead of having your employees file reimbursement claims that your finance team will have to manually review, you can issue virtual cards to your employees and prevent them from making out-of-pocket expenses. It reduces the risk of fake reimbursement claims and allows you to monitor all transactions while empowering your employees.
No more worrying about untracked and uncategorized business expenses.
Enhanced security
When you allow employees to make expenses on behalf of your business, it’s understandable that there may be fear of fund misuse and employees making out-of-policy expenses.
The good news is that by equipping your employees with virtual cards, you’ll have better security over your company funds.
Every virtual card expense will be automatically recorded on your card management platform. You can also set individual card spending limits to ensure that employees spend accordingly.
Easy to use
Generating a virtual prepaid card is easy and can be done instantly on your virtual card management system. In just a few clicks, you can create a new card, specify a limit for it, and activate your card, allowing you to start spending as soon as necessary.
When making payments, all you’ll have to do is enter your card data and verify it. There are no long wait times or complicated processes involved in using a virtual card.
Reduced incidents of fraud
Unlike their physical counterparts, losing or misplacing a virtual card is impossible. You also prevent the possibility of criminals stealing your card data by generating cards for one-time use, which disables vendors from storing your card data and eliminates fraud risk.
In the unfortunate situation where criminals get access to your card data, you can also instantly freeze and block your cards and simply create a new one.
Better record keeping
Tracking your business expenses is easier than ever with virtual cards. Link your virtual cards with a card management system to get all your transactions automatically reflected on your dashboard, giving you better visibility and more accurate reports.
With the added ability to easily generate single and multi-use cards, you can create vendor or subscription-specific cards to monitor all your payments and allow you more control. Expense management is made even simpler.
Cost-effective
Some virtual card providers will offer credit for your cards. This helps you improve your cash flow, allowing you a grace period before you have to make your credit repayment.
If you can get interest-free credit, you could end up saving yourself from tough spots without incurring extra fees. Some virtual cards will also give you the added benefit of reward programs while not needing to worry about additional fees like physical card printing fees.
Take charge of your business expenses
How to implement virtual cards in your organization?
Assess the organizational needs
Before you even plan to apply for a virtual card, you first want to identify what your business needs are. Determine what you’ll need virtual cards for and what kind of purchases you will be using them to make. You want to consider what benefits you want to get from using virtual cards.
Note what your current processes and pain points are. If you do a lot of manual employee reimbursements, you may want virtual cards to cut down on the processing time and manage your employee expenses better.
Research the right virtual card provider
Many card providers can provide you with virtual cards. You want to do some research into each provider before coming up with a list of virtual card providers that you think will help you manage your expenses better.
Consider factors like ease of use, application process, expense management tools, security, and accounting integrations when you’re looking into the different virtual card providers. You also want to compare their features and pricing models at this stage.
Selecting the right provider and onboarding
After doing your research, you’re bound to have a list of virtual card providers that are the most appealing to you. You want to revisit your business needs and match up the different providers with these needs. Pick the one that you think you can take full advantage of and can provide you with the most benefits.
However, make sure that you also review your selected provider’s contractual terms. Ask how your data is protected by your provider of choice and ensure that you are aware of all details. It also helps you guarantee that your virtual card provider complies with regulations.
Integrate with existing accounting system
Ideally, you want to go with a virtual card provider that supports integration with your existing accounting systems. When the time comes to start using your virtual cards, you’ll want to integrate them with your accounting software of choice to make bookkeeping easier in the future.
With direct integrations, you’ll be able to fetch information straight from your accounting software and sync your transaction data with your software. After the initial setup, future reconciliation will be a breeze.
Establish usage guidelines and procedures
It’s important that you set up a solid, clear, and distinct virtual card policy before you start issuing cards to your team. Make sure that you’re aware of what your expectations from card usage are and create guidelines and procedures to support those expectations. List down the consequences of any out-of-policy usage.
The clearer your guidelines are, the less likely it is for your employees to misuse their virtual cards. You want to cover everything from card creation to card expense reporting in your guidelines. Have clear procedures for every step involved in virtual card usage and review them with your finance team.
Educate employees and stakeholders
After you’ve created a virtual card policy with clear guidelines, procedures, and consequences, you’ll need to communicate this policy with employees and all other stakeholders. A great way to introduce virtual cards and integrate them with your existing processes is by conducting training sessions on virtual card usage and the policies concerning them.
You want to ensure that you and your employees are on the same page. Educate your employees on how to use virtual cards and which policies they have to adhere to. Be sure to also address any concerns and answer any questions that employees may have.
Continuous evaluation and improvement
You can track and monitor all virtual card usage easily via a card management system linked to your virtual cards. Make sure that you are taking full advantage of that and regularly monitoring and evaluating your card expenses. You can only enjoy the benefits of a streamlined expense management process if you utilize the tools available to you.
It’s best if you have regularly scheduled reviews of your expenses, allowing you to see how much you have spent each month. You also want to make a note of what your biggest expenses are and which spend categories are the most expensive.
Review and make adjustments
When you have all this data available to you readily, the best way to use this data is by analyzing it and identifying patterns. Seeing what your spend patterns look like can help you in making future decisions, allowing you to save money and cut back on some costs.
It’s also important as it helps you review your virtual card usage guidelines and procedures. If you think some things aren’t working, then you may want to go back and review your virtual card policy to reflect your new findings. Being flexible is the key to better expense management.
Volopay virtual cards to better manage business expenses
You can streamline your expense management and start spending smarter by using Volopay virtual card for your business. Starting from subscription management with vendor-specific cards to online travel bookings, all your payments are easy to make using your virtual cards.
In just a few clicks, you can generate and activate your cards and immediately use them for transactions. Not to mention that everything will get recorded in real-time on Volopay’s platform!
Issued by Visa and equipped with industry-standard encryptions, your virtual cards are secure payment methods that reduce fraud risk. Keep your funds safe, empower your employees, and monitor all your business spending with Volopay virtual cards through just one platform.