In today’s increasingly digital economy, businesses are only getting hungrier for innovative ways to streamline operations and control costs — and virtual credit cards are proving to be one of the most powerful tools available to do just that.

According to Juniper Research, the virtual card market is expected to grow by 280% by 2027, from $2.4 trillion to $9.1 trillion. Research from Visa also shows that in Canada and the United States, 74% and 93% of businesses, respectively, find virtual cards attractive. 

Yet, despite this rapid growth, only 38% of companies use virtual cards to make or receive payments. 

So, what’s holding them back?

For many SMBs, it's simply a matter of awareness. Virtual cards were once seen as tools for large enterprises, but the truth is that they’re tailor-made to help lean finance teams save time, reduce risk, and gain control over spending. And they’ve never been more accessible than they are today.  

Let’s examine what they are, how they compare to physical credit cards, and why now is the time to implement them in your business.

What is a virtual credit card?

A virtual credit card is a digitally generated card with its own 16-digit number, expiration date, and security code — just like a physical credit card, but without the plastic. Although they operate much like standard credit cards, they offer additional layers of security and control, making them particularly beneficial in any business setting. Virtual cards are linked to an existing business credit card account and can be created and distributed instantly. 

Virtual credit cards vs. Traditional credit cards

Traditional business credit cards are physical cards issued by banks based on a pre-approved credit limit. They are widely accepted and convenient payment methods that can be swiped or tapped in-store or online.

Virtual credit cards, on the other hand, are digital “extensions” of traditional credit cards. Each one has a unique number and can be tailored with specific rules:

• One-time use or auto-refill
• Assigned to a specific vendor, project, or employee
• Custom expiration dates
• Fixed spending limits

Benefits of using virtual credit cards for business 

Grasping the full utility of virtual credit cards involves recognizing their impact on business operations—making them more secure, efficient, and manageable. 

Let’s review some of the key benefits that have made virtual cards an invaluable tool in modern business financial management.

1. Enhanced security & fraud protection

Virtual cards protect your sensitive credit data by keeping it out of the wrong hands. Unlike traditional credit cards, which are more susceptible to theft and misuse, virtual cards offer stronger security and control through unique card numbers that can be tied to a specific transaction or vendor — making them virtually useless if compromised. Instead of sharing your company’s physical card details with vendors or employees, you can issue virtual cards with a set dollar limit for specific payments. Once it’s used, it can be set to automatically deactivate, minimizing the risk of fraud, overbilling, or data breaches. Cards can also be manually deactivated in seconds should the need arise. 

2. Greater control over business spending

With virtual cards, you can set and enforce spending limits through every single virtual card. This is especially helpful for distributed teams, field employees, or anyone who needs to make purchases on behalf of the business. Instead of handing over a shared company card and hoping for the best, you create a virtual card with clear rules and full transparency. No more surprise statements or end-of-month panic. You stay in control in real time.

3. Improved expense management & visibility

Virtual cards simplify expense management from start to finish. Traditional methods often rely on manual data entry, paper receipts, and slow approval processes. With virtual cards, everything — from issuing to tracking to reconciling — happens digitally. By issuing pre-approved virtual cards, you can cut down on expense reports entirely and set custom rules to automatically categorize and approve transactions in real time. This will save you time but also reduce human error, making financial reporting and audits far more efficient.

4. Streamlined accounts payable & vendor management

Paying vendors doesn’t have to be a manual, time-consuming process. With virtual cards, you can skip the check runs and wire transfers by issuing a dedicated card to each vendor — complete with spending limits, expiration dates, and auto-refill settings for recurring payments. This approach brings clarity and control to your accounts payable process. Every transaction is automatically tracked and categorized, helping you stay on budget, avoid duplicate payments, and speed up month-end reconciliation. And if a card is ever compromised? No problem. Just deactivate that one card — no need to update payment details across all your vendors.

5. Flexibility and convenience

Virtual credit cards are both versatile and convenient, supporting online and in-store payments — including contactless options via mobile wallets. You can issue them in seconds, avoiding the delays that come with traditional cards, making them ideal for time-sensitive or ad-hoc purchases. Plus, virtual card platforms often integrate seamlessly with your existing accounting software, helping you streamline expense tracking and simplify reconciliation. Their speed and flexibility give your team the agility to adapt quickly to changing payment needs.

6. Reduced risk of overspending

With traditional cards, it’s easy for employee spending to get out of hand — especially when teams are sharing a single card. Virtual cards let you stop overspending before it happens. You can assign specific budgets, timeframes, or merchant categories to each card so employees get to pay for what they need — without putting your cash flow or budget at risk.

Addressing common concerns about virtual cards 

Virtual cards offer a number of benefits, yet it’s only natural to have some questions or concerns as you consider implementing them in your business. The most common questions generally revolve around pricing, vendor acceptance, and usability, and while these are all valid aspects to consider, don’t forget the benefits of virtual cards substantially outweigh the limitations.

Cost implications

When it comes to the cost, it's important to remember that pricing can vary greatly depending on your credit card issuer and the virtual card vendor you choose. In the case of Extend, there are typically no additional fees if you hold a commercial credit card from one of our partner banks.

Vendor acceptance 

Most online vendors and many in-person merchants accept virtual cards, especially through mobile wallets. Some sectors, like hotels or car rentals, may still require physical cards today, but adoption is growing quickly as more physical stores update their payment systems to accommodate contactless payments.

Ease of use 

Virtual cards are generally easy to use and implement. Especially if you partner with a virtual card payment provider like Extend, which doesn't require you to leave your bank or open new lines of credit. This means that within a few minutes and with a quick and intuitive onboarding, you can equip your team with a payment tool whenever they need one. You can also integrate with your existing finance and accounting software for an even smoother and seamless workflow. 

Get started with virtual cards 

As the business world continues to shift to digital, virtual cards will only become the better option to keep up with both day-to-day operations and long-term financial goals. If you're ready to enhance your business's financial efficiency and security while streamlining spend management, there’s no better time to get started with virtual cards.