Blog

What is a virtual credit card?

January 14, 2022 7:00 PM

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Are you looking for new ways to make business operations more efficient and secure? Have you considered virtual credit cards yet? 

Virtual cards are a powerful tool making a big difference in streamlining business transactions and enhancing online security.

While traditional plastic cards have been the backbone of business payments for decades, the rise of virtual cards offers a more flexible, secure, and efficient alternative. 

In this blog, I’ll explain what virtual cards are, how they work, and how they can benefit your business. Whether you're a seasoned professional or new to the concept, this virtual card blog is for you if you want to simplify and secure your business finances. 

Let's dive in.

What is a virtual credit card? 

A virtual credit card is a digital counterpart of a traditional physical credit card, but instead of a piece of plastic, it exists solely in electronic form. Like a regular credit card, it consists of its own credit card information, like a 15- or 16-digit card number, an expiration date, and a security code. Virtual cards were initially designed with security in mind, making them great payment options for online purchases and B2B transactions since they mask your real account information. 

A virtual card works exactly the same as your traditional corporate card but has more advantages. For instance, if you need to make a business purchase or pay a vendor, you can instantly generate a unique virtual card number for that specific transaction. 

This temporary card number is linked to your business's main credit card account but acts as a separate card, providing an additional layer of security and reducing the risk of credit card fraud and misuse.

The beauty of business virtual credit cards lies in their adaptability. You can tailor them to specific transactions, vendors, and validity timeframes, giving your business unparalleled spending control. Whether it’s a one-off purchase or recurring transactions, virtual cards offer a blend of convenience and security that traditional payment methods cannot match.

Benefits of virtual credit cards for businesses 

Virtual cards are transforming the way businesses make and handle payments. 

Let’s take a deeper look at the key advantages of business virtual credit cards.

Ease of implementation

As a business owner, you know adopting new technologies can be daunting, especially when it involves financial operations. The great thing about virtual credit cards is they’re easy and quick to implement. Typically, implementation involves signing up with a virtual card provider and using their desktop or mobile app to generate virtual cards while seamlessly integrating with your existing payment ecosystem. 

With minimal setup, you can create as many virtual cards as you need for any business-related expense. This ease of use extends to online transactions, where you can simply enter the virtual card details just like a regular credit card, without needing a physical credit card present.

Enhanced security

One of the most compelling reasons to embrace virtual credit cards is their enhanced security. Especially since credit card fraud and data breaches are on the rise, with global losses predicted to grow to almost $50 billion by 2030, according to a recent study

In contrast to traditional cards, virtual cards equip you with advanced security features that help limit your exposure, especially when making online purchases. Each virtual card number is unique, and you can set it for a specific transaction, amount, or vendor. Not to mention virtual cards can be rendered useless after a single use or custom expiration date. Meaning that even if the card details fall into the wrong hands, fraudsters won't be able to use the card for any other transaction. 

These security features significantly reduce the risk of credit card fraud and protect your business's main credit card account from any potential threats. 

Simplified spend and expense management

Spend management is a critical aspect of any business's financial health. Still, with the many transactions and expenses that can occur when running a business, this can quickly become a challenge. This task becomes even more difficult if you rely on a single corporate card or share a stack of physical credit cards across the business. 

Before you know it, you have myriad transactions to reconcile but not enough visibility to understand how dollars are being spent, and by whom — further complicating payment processes and reconciliation. Fortunately, simplifying expense and spend management with virtual cards becomes much easier. 

You can set specific spending limits per card, monitor usage in real time, and easily reconcile expenses with added visibility and detailed transaction reports. This ensures your team can easily adhere to the business budget, and your finance team can simplify the accounting process, eliminate the need for manual tracking, and reduce the risk of errors.

Reduce plastic waste 

If reducing plastic waste is a priority for your business, virtual cards offer a compelling alternative to conventional physical plastic credit cards. 

Since virtual cards exist solely in the digital realm, they can reduce the amount of plastic that ends up in landfills or oceans, causing harm to wildlife and natural ecosystems. Opting for virtual cards means your business can contribute to reducing plastic waste, thus playing a role in preserving our environment. 

How businesses can use a virtual credit card 

Navigating the ever-evolving financial landscape requires versatile and intuitive tools, and virtual cards stand out as a powerful one to add to your business’s financial toolkit. Their digital nature and customizable features make them ideal for various business transactions and financial operations. 

But how exactly can your company harness the power of virtual cards? Let’s go over how to use virtual credit cards in your business.  

1. Tailored vendor payments

As a business owner, you deal with multiple vendors, each with their own payment terms and schedules. Sharing the same credit card with all your vendors can be problematic when controlling spending, reducing overages, or preventing unauthorized charges. 

Why not assign a virtual card per vendor? Doing so will not only increase accountability and avoid overspending, but it will streamline reconciliation since you can easily categorize transactions per service provider while ensuring timely and accurate payments without the need for further manual adjustments.

2. Project-based budgeting

When juggling multiple projects, it can be challenging to allocate and track budgets effectively. But with virtual cards, it's very doable. You can assign a unique virtual card to each project or employee to streamline expense management and ensure funds are used appropriately. 

What's more, with a platform like Extend, you can create budgets within the app, empowering your employees to generate virtual cards on your behalf within an approved and predetermined budget. This ensures you can delegate without halting the progress of critical business projects, especially when you’re enjoying some well-deserved time off. 

3. Employee empowerment

Instead of issuing and keeping track of multiple physical cards across the business, send your employees virtual cards for any business expense. Employees can use a virtual card online, in-app, or on the phone, and depending on the credit card issuer, they can even add it to their mobile wallet for contactless payments. 

This flexibility and convenience not only reduces the risk associated with lost or stolen cards but helps you keep tabs on payments via real-time expense tracking and built-in approval processes. This way, unapproved purchases can be a thing of the past, and you can better understand how dollars are utilized across the organization. 

4. Instant issue for ad-hoc needs

What happens if an employee needs to charge an immediate or unexpected expense? They likely have to wait for a physical card's approval, which can take time and delay operations. 

The great thing is that with virtual cards, you can instantly generate and send virtual cards whenever a team member needs to charge an expense. Not to mention, employees can also request a virtual card, which you can then quickly approve via an app, addressing urgent payment needs without delay and on the go. 

5. Subscription management

As a growing business, you likely rely on multiple software subscriptions for smooth operations. But what happens if your corporate card gets compromised or an employee leaves the company before canceling a subscription? Either operations will hit a snag, or you will continue getting charged for software you no longer use. 

One of the most significant advantages of using recurring virtual credit cards in your business is controlling subscription costs more efficiently, especially when personnel changes occur. While traditional corporate cards may leave you inadvertently paying for subscriptions, virtual cards make it easier to discontinue payments thanks to spending limits and custom expiration date capabilities. 

Set up your virtual cards to auto-renew monthly for each essential subscription, and enjoy the peace of mind that comes with knowing you're only paying for the services your business actually needs. If a card gets compromised, there's no need to make on-file changes with every provider or shut down your entire account, adding another layer of convenience and security.

The future of business transactions 

As we navigate deeper into the digital age, the trajectory of business transactions is unmistakably leaning toward innovation and enhanced security.

Virtual cards stand at the forefront of this evolution, offering convenience, efficiency, and more online security. 

Their ability to adapt to diverse business needs, from precise budgeting to safeguarding sensitive financial data, positions them as a pivotal tool in modern finance.

As businesses continue to seek streamlined and secure transaction methods, virtual cards will play an even more integral role in shaping the future landscape of business transactions. 

Is your business ready to go virtual?

The era of virtual cards is not just imminent; it's already here. If you’re ready to reap all the benefits virtual cards have to offer, now’s the perfect time to get started. 

Learn more about implementing virtual cards in your business, or if you have any questions about getting started, we’re here to help! 

Presented by

Irais Urias

Content Marketing Manager
Blog

What is a virtual credit card?

Virtual Card Spend
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Share post

Are you looking for new ways to make business operations more efficient and secure? Have you considered virtual credit cards yet? 

Virtual cards are a powerful tool making a big difference in streamlining business transactions and enhancing online security.

While traditional plastic cards have been the backbone of business payments for decades, the rise of virtual cards offers a more flexible, secure, and efficient alternative. 

In this blog, I’ll explain what virtual cards are, how they work, and how they can benefit your business. Whether you're a seasoned professional or new to the concept, this virtual card blog is for you if you want to simplify and secure your business finances. 

Let's dive in.

What is a virtual credit card? 

A virtual credit card is a digital counterpart of a traditional physical credit card, but instead of a piece of plastic, it exists solely in electronic form. Like a regular credit card, it consists of its own credit card information, like a 15- or 16-digit card number, an expiration date, and a security code. Virtual cards were initially designed with security in mind, making them great payment options for online purchases and B2B transactions since they mask your real account information. 

A virtual card works exactly the same as your traditional corporate card but has more advantages. For instance, if you need to make a business purchase or pay a vendor, you can instantly generate a unique virtual card number for that specific transaction. 

This temporary card number is linked to your business's main credit card account but acts as a separate card, providing an additional layer of security and reducing the risk of credit card fraud and misuse.

The beauty of business virtual credit cards lies in their adaptability. You can tailor them to specific transactions, vendors, and validity timeframes, giving your business unparalleled spending control. Whether it’s a one-off purchase or recurring transactions, virtual cards offer a blend of convenience and security that traditional payment methods cannot match.

Benefits of virtual credit cards for businesses 

Virtual cards are transforming the way businesses make and handle payments. 

Let’s take a deeper look at the key advantages of business virtual credit cards.

Ease of implementation

As a business owner, you know adopting new technologies can be daunting, especially when it involves financial operations. The great thing about virtual credit cards is they’re easy and quick to implement. Typically, implementation involves signing up with a virtual card provider and using their desktop or mobile app to generate virtual cards while seamlessly integrating with your existing payment ecosystem. 

With minimal setup, you can create as many virtual cards as you need for any business-related expense. This ease of use extends to online transactions, where you can simply enter the virtual card details just like a regular credit card, without needing a physical credit card present.

Enhanced security

One of the most compelling reasons to embrace virtual credit cards is their enhanced security. Especially since credit card fraud and data breaches are on the rise, with global losses predicted to grow to almost $50 billion by 2030, according to a recent study

In contrast to traditional cards, virtual cards equip you with advanced security features that help limit your exposure, especially when making online purchases. Each virtual card number is unique, and you can set it for a specific transaction, amount, or vendor. Not to mention virtual cards can be rendered useless after a single use or custom expiration date. Meaning that even if the card details fall into the wrong hands, fraudsters won't be able to use the card for any other transaction. 

These security features significantly reduce the risk of credit card fraud and protect your business's main credit card account from any potential threats. 

Simplified spend and expense management

Spend management is a critical aspect of any business's financial health. Still, with the many transactions and expenses that can occur when running a business, this can quickly become a challenge. This task becomes even more difficult if you rely on a single corporate card or share a stack of physical credit cards across the business. 

Before you know it, you have myriad transactions to reconcile but not enough visibility to understand how dollars are being spent, and by whom — further complicating payment processes and reconciliation. Fortunately, simplifying expense and spend management with virtual cards becomes much easier. 

You can set specific spending limits per card, monitor usage in real time, and easily reconcile expenses with added visibility and detailed transaction reports. This ensures your team can easily adhere to the business budget, and your finance team can simplify the accounting process, eliminate the need for manual tracking, and reduce the risk of errors.

Reduce plastic waste 

If reducing plastic waste is a priority for your business, virtual cards offer a compelling alternative to conventional physical plastic credit cards. 

Since virtual cards exist solely in the digital realm, they can reduce the amount of plastic that ends up in landfills or oceans, causing harm to wildlife and natural ecosystems. Opting for virtual cards means your business can contribute to reducing plastic waste, thus playing a role in preserving our environment. 

How businesses can use a virtual credit card 

Navigating the ever-evolving financial landscape requires versatile and intuitive tools, and virtual cards stand out as a powerful one to add to your business’s financial toolkit. Their digital nature and customizable features make them ideal for various business transactions and financial operations. 

But how exactly can your company harness the power of virtual cards? Let’s go over how to use virtual credit cards in your business.  

1. Tailored vendor payments

As a business owner, you deal with multiple vendors, each with their own payment terms and schedules. Sharing the same credit card with all your vendors can be problematic when controlling spending, reducing overages, or preventing unauthorized charges. 

Why not assign a virtual card per vendor? Doing so will not only increase accountability and avoid overspending, but it will streamline reconciliation since you can easily categorize transactions per service provider while ensuring timely and accurate payments without the need for further manual adjustments.

2. Project-based budgeting

When juggling multiple projects, it can be challenging to allocate and track budgets effectively. But with virtual cards, it's very doable. You can assign a unique virtual card to each project or employee to streamline expense management and ensure funds are used appropriately. 

What's more, with a platform like Extend, you can create budgets within the app, empowering your employees to generate virtual cards on your behalf within an approved and predetermined budget. This ensures you can delegate without halting the progress of critical business projects, especially when you’re enjoying some well-deserved time off. 

3. Employee empowerment

Instead of issuing and keeping track of multiple physical cards across the business, send your employees virtual cards for any business expense. Employees can use a virtual card online, in-app, or on the phone, and depending on the credit card issuer, they can even add it to their mobile wallet for contactless payments. 

This flexibility and convenience not only reduces the risk associated with lost or stolen cards but helps you keep tabs on payments via real-time expense tracking and built-in approval processes. This way, unapproved purchases can be a thing of the past, and you can better understand how dollars are utilized across the organization. 

4. Instant issue for ad-hoc needs

What happens if an employee needs to charge an immediate or unexpected expense? They likely have to wait for a physical card's approval, which can take time and delay operations. 

The great thing is that with virtual cards, you can instantly generate and send virtual cards whenever a team member needs to charge an expense. Not to mention, employees can also request a virtual card, which you can then quickly approve via an app, addressing urgent payment needs without delay and on the go. 

5. Subscription management

As a growing business, you likely rely on multiple software subscriptions for smooth operations. But what happens if your corporate card gets compromised or an employee leaves the company before canceling a subscription? Either operations will hit a snag, or you will continue getting charged for software you no longer use. 

One of the most significant advantages of using recurring virtual credit cards in your business is controlling subscription costs more efficiently, especially when personnel changes occur. While traditional corporate cards may leave you inadvertently paying for subscriptions, virtual cards make it easier to discontinue payments thanks to spending limits and custom expiration date capabilities. 

Set up your virtual cards to auto-renew monthly for each essential subscription, and enjoy the peace of mind that comes with knowing you're only paying for the services your business actually needs. If a card gets compromised, there's no need to make on-file changes with every provider or shut down your entire account, adding another layer of convenience and security.

The future of business transactions 

As we navigate deeper into the digital age, the trajectory of business transactions is unmistakably leaning toward innovation and enhanced security.

Virtual cards stand at the forefront of this evolution, offering convenience, efficiency, and more online security. 

Their ability to adapt to diverse business needs, from precise budgeting to safeguarding sensitive financial data, positions them as a pivotal tool in modern finance.

As businesses continue to seek streamlined and secure transaction methods, virtual cards will play an even more integral role in shaping the future landscape of business transactions. 

Is your business ready to go virtual?

The era of virtual cards is not just imminent; it's already here. If you’re ready to reap all the benefits virtual cards have to offer, now’s the perfect time to get started. 

Learn more about implementing virtual cards in your business, or if you have any questions about getting started, we’re here to help! 

Blog

What is a virtual credit card?

Author
Irais Urias
Content Marketing Manager
Virtual Card Spend
No items found.
Share post

Are you looking for new ways to make business operations more efficient and secure? Have you considered virtual credit cards yet? 

Virtual cards are a powerful tool making a big difference in streamlining business transactions and enhancing online security.

While traditional plastic cards have been the backbone of business payments for decades, the rise of virtual cards offers a more flexible, secure, and efficient alternative. 

In this blog, I’ll explain what virtual cards are, how they work, and how they can benefit your business. Whether you're a seasoned professional or new to the concept, this virtual card blog is for you if you want to simplify and secure your business finances. 

Let's dive in.

What is a virtual credit card? 

A virtual credit card is a digital counterpart of a traditional physical credit card, but instead of a piece of plastic, it exists solely in electronic form. Like a regular credit card, it consists of its own credit card information, like a 15- or 16-digit card number, an expiration date, and a security code. Virtual cards were initially designed with security in mind, making them great payment options for online purchases and B2B transactions since they mask your real account information. 

A virtual card works exactly the same as your traditional corporate card but has more advantages. For instance, if you need to make a business purchase or pay a vendor, you can instantly generate a unique virtual card number for that specific transaction. 

This temporary card number is linked to your business's main credit card account but acts as a separate card, providing an additional layer of security and reducing the risk of credit card fraud and misuse.

The beauty of business virtual credit cards lies in their adaptability. You can tailor them to specific transactions, vendors, and validity timeframes, giving your business unparalleled spending control. Whether it’s a one-off purchase or recurring transactions, virtual cards offer a blend of convenience and security that traditional payment methods cannot match.

Benefits of virtual credit cards for businesses 

Virtual cards are transforming the way businesses make and handle payments. 

Let’s take a deeper look at the key advantages of business virtual credit cards.

Ease of implementation

As a business owner, you know adopting new technologies can be daunting, especially when it involves financial operations. The great thing about virtual credit cards is they’re easy and quick to implement. Typically, implementation involves signing up with a virtual card provider and using their desktop or mobile app to generate virtual cards while seamlessly integrating with your existing payment ecosystem. 

With minimal setup, you can create as many virtual cards as you need for any business-related expense. This ease of use extends to online transactions, where you can simply enter the virtual card details just like a regular credit card, without needing a physical credit card present.

Enhanced security

One of the most compelling reasons to embrace virtual credit cards is their enhanced security. Especially since credit card fraud and data breaches are on the rise, with global losses predicted to grow to almost $50 billion by 2030, according to a recent study

In contrast to traditional cards, virtual cards equip you with advanced security features that help limit your exposure, especially when making online purchases. Each virtual card number is unique, and you can set it for a specific transaction, amount, or vendor. Not to mention virtual cards can be rendered useless after a single use or custom expiration date. Meaning that even if the card details fall into the wrong hands, fraudsters won't be able to use the card for any other transaction. 

These security features significantly reduce the risk of credit card fraud and protect your business's main credit card account from any potential threats. 

Simplified spend and expense management

Spend management is a critical aspect of any business's financial health. Still, with the many transactions and expenses that can occur when running a business, this can quickly become a challenge. This task becomes even more difficult if you rely on a single corporate card or share a stack of physical credit cards across the business. 

Before you know it, you have myriad transactions to reconcile but not enough visibility to understand how dollars are being spent, and by whom — further complicating payment processes and reconciliation. Fortunately, simplifying expense and spend management with virtual cards becomes much easier. 

You can set specific spending limits per card, monitor usage in real time, and easily reconcile expenses with added visibility and detailed transaction reports. This ensures your team can easily adhere to the business budget, and your finance team can simplify the accounting process, eliminate the need for manual tracking, and reduce the risk of errors.

Reduce plastic waste 

If reducing plastic waste is a priority for your business, virtual cards offer a compelling alternative to conventional physical plastic credit cards. 

Since virtual cards exist solely in the digital realm, they can reduce the amount of plastic that ends up in landfills or oceans, causing harm to wildlife and natural ecosystems. Opting for virtual cards means your business can contribute to reducing plastic waste, thus playing a role in preserving our environment. 

How businesses can use a virtual credit card 

Navigating the ever-evolving financial landscape requires versatile and intuitive tools, and virtual cards stand out as a powerful one to add to your business’s financial toolkit. Their digital nature and customizable features make them ideal for various business transactions and financial operations. 

But how exactly can your company harness the power of virtual cards? Let’s go over how to use virtual credit cards in your business.  

1. Tailored vendor payments

As a business owner, you deal with multiple vendors, each with their own payment terms and schedules. Sharing the same credit card with all your vendors can be problematic when controlling spending, reducing overages, or preventing unauthorized charges. 

Why not assign a virtual card per vendor? Doing so will not only increase accountability and avoid overspending, but it will streamline reconciliation since you can easily categorize transactions per service provider while ensuring timely and accurate payments without the need for further manual adjustments.

2. Project-based budgeting

When juggling multiple projects, it can be challenging to allocate and track budgets effectively. But with virtual cards, it's very doable. You can assign a unique virtual card to each project or employee to streamline expense management and ensure funds are used appropriately. 

What's more, with a platform like Extend, you can create budgets within the app, empowering your employees to generate virtual cards on your behalf within an approved and predetermined budget. This ensures you can delegate without halting the progress of critical business projects, especially when you’re enjoying some well-deserved time off. 

3. Employee empowerment

Instead of issuing and keeping track of multiple physical cards across the business, send your employees virtual cards for any business expense. Employees can use a virtual card online, in-app, or on the phone, and depending on the credit card issuer, they can even add it to their mobile wallet for contactless payments. 

This flexibility and convenience not only reduces the risk associated with lost or stolen cards but helps you keep tabs on payments via real-time expense tracking and built-in approval processes. This way, unapproved purchases can be a thing of the past, and you can better understand how dollars are utilized across the organization. 

4. Instant issue for ad-hoc needs

What happens if an employee needs to charge an immediate or unexpected expense? They likely have to wait for a physical card's approval, which can take time and delay operations. 

The great thing is that with virtual cards, you can instantly generate and send virtual cards whenever a team member needs to charge an expense. Not to mention, employees can also request a virtual card, which you can then quickly approve via an app, addressing urgent payment needs without delay and on the go. 

5. Subscription management

As a growing business, you likely rely on multiple software subscriptions for smooth operations. But what happens if your corporate card gets compromised or an employee leaves the company before canceling a subscription? Either operations will hit a snag, or you will continue getting charged for software you no longer use. 

One of the most significant advantages of using recurring virtual credit cards in your business is controlling subscription costs more efficiently, especially when personnel changes occur. While traditional corporate cards may leave you inadvertently paying for subscriptions, virtual cards make it easier to discontinue payments thanks to spending limits and custom expiration date capabilities. 

Set up your virtual cards to auto-renew monthly for each essential subscription, and enjoy the peace of mind that comes with knowing you're only paying for the services your business actually needs. If a card gets compromised, there's no need to make on-file changes with every provider or shut down your entire account, adding another layer of convenience and security.

The future of business transactions 

As we navigate deeper into the digital age, the trajectory of business transactions is unmistakably leaning toward innovation and enhanced security.

Virtual cards stand at the forefront of this evolution, offering convenience, efficiency, and more online security. 

Their ability to adapt to diverse business needs, from precise budgeting to safeguarding sensitive financial data, positions them as a pivotal tool in modern finance.

As businesses continue to seek streamlined and secure transaction methods, virtual cards will play an even more integral role in shaping the future landscape of business transactions. 

Is your business ready to go virtual?

The era of virtual cards is not just imminent; it's already here. If you’re ready to reap all the benefits virtual cards have to offer, now’s the perfect time to get started. 

Learn more about implementing virtual cards in your business, or if you have any questions about getting started, we’re here to help! 

About the author

Irais Urias

Content Marketing Manager

Irais is the Content Marketing Manager at Extend. An ambitious and performance-driven professional, Irais brings over five years of experience in journalism, content marketing, social media, and communications. Before Extend, she was the Marketing Communications Specialist at DATAMARK, where she led content marketing and social media campaigns, further deepening her skills in strategic storytelling and augmenting brand affinity. She earned a B.S. in Multimedia Journalism with a minor in Marketing from The University of Texas at El Paso.

Frequently asked questions about virtual credit cards for business

How does a virtual credit card work?

A virtual credit card operates similarly to a traditional credit card but exists solely digitally. It provides a unique card number, expiration date, and security code, which you can use for online and in-person payments via mobile wallets. Some virtual cards are designed for single use, while others can be used multiple times until expiration.

What is the difference between a virtual card and a credit card?

Both virtual cards and traditional credit cards facilitate financial transactions. However, while a conventional credit card is a tangible piece of plastic you carry, a virtual card operates digitally, often accessed via a platform or app. A notable advantage of virtual cards is their adaptability. You can set specific spending limits, custom expiration dates and even generate distinct card numbers for individual transactions or vendors. This enhanced control not only streamlines financial management but also amplifies security, safeguarding against potential unauthorized use.

Are virtual credit cards safe?

Virtual credit cards are not only safe but also provide superior online security compared to traditional credit cards. Virtual cards have a unique card number that you can use for specific transactions, vendors, employees, projects, or client accounts, enhancing both accountability and control. Given their ability to expire after just one use or be instantly deactivated with a click of a button, they greatly minimize the chances of unauthorized transactions and potential fraud.

Do virtual credit cards cost money?

Virtual credit card costs vary depending on your credit card issuer and the platform you decide to use. Extend virtual cards are typically a complimentary feature if you hold a commercial credit card with one of our partner banks. 

Can I use a virtual credit card in a store?

With the increasing popularity of mobile payment systems, you can now load virtual cards into your mobile wallet to use in physical stores via contactless payments. It's important to note that the ability to do so depends on your credit card issuer.

Are virtual credit cards accepted everywhere?

Virtual credit cards are widely accepted by online retailers, and their acceptance is rapidly growing in physical stores as more retailers modernize their payment infrastructure and embrace contactless payments via digital wallets. With retailers that have yet to accept contactless payments, you can still complete transactions by manually entering the 16-digit virtual card number. It's worth noting, however, that certain situations, like booking a hotel or renting a car, might still require a physical credit card. But with the continuous advancements in technology, it's only a matter of time before digital solutions become ubiquitous.

How long does a virtual credit card last?

A virtual credit card's duration can differ and is typically customizable based on preference. Some are set for single use and expire shortly after the transaction, while others can be set for recurring payments, lasting up to their predetermined expiration date, much like conventional credit cards. 

What is the difference between a virtual credit card and a digital card?

A virtual credit card has a unique card number, which exists solely in digital form and isn't linked to your existing physical card. On the other hand, a digital card is a digital version of your existing physical credit card, which means it carries the same card number over to the digital realm. While both offer a digital way to pay via mobile wallets, a virtual credit card is distinct, whereas a digital card mirrors your actual physical card.

Blog

What is a virtual credit card?

Presented by

Irais Urias

Content Marketing Manager

Are you looking for new ways to make business operations more efficient and secure? Have you considered virtual credit cards yet? 

Virtual cards are a powerful tool making a big difference in streamlining business transactions and enhancing online security.

While traditional plastic cards have been the backbone of business payments for decades, the rise of virtual cards offers a more flexible, secure, and efficient alternative. 

In this blog, I’ll explain what virtual cards are, how they work, and how they can benefit your business. Whether you're a seasoned professional or new to the concept, this virtual card blog is for you if you want to simplify and secure your business finances. 

Let's dive in.

What is a virtual credit card? 

A virtual credit card is a digital counterpart of a traditional physical credit card, but instead of a piece of plastic, it exists solely in electronic form. Like a regular credit card, it consists of its own credit card information, like a 15- or 16-digit card number, an expiration date, and a security code. Virtual cards were initially designed with security in mind, making them great payment options for online purchases and B2B transactions since they mask your real account information. 

A virtual card works exactly the same as your traditional corporate card but has more advantages. For instance, if you need to make a business purchase or pay a vendor, you can instantly generate a unique virtual card number for that specific transaction. 

This temporary card number is linked to your business's main credit card account but acts as a separate card, providing an additional layer of security and reducing the risk of credit card fraud and misuse.

The beauty of business virtual credit cards lies in their adaptability. You can tailor them to specific transactions, vendors, and validity timeframes, giving your business unparalleled spending control. Whether it’s a one-off purchase or recurring transactions, virtual cards offer a blend of convenience and security that traditional payment methods cannot match.

Benefits of virtual credit cards for businesses 

Virtual cards are transforming the way businesses make and handle payments. 

Let’s take a deeper look at the key advantages of business virtual credit cards.

Ease of implementation

As a business owner, you know adopting new technologies can be daunting, especially when it involves financial operations. The great thing about virtual credit cards is they’re easy and quick to implement. Typically, implementation involves signing up with a virtual card provider and using their desktop or mobile app to generate virtual cards while seamlessly integrating with your existing payment ecosystem. 

With minimal setup, you can create as many virtual cards as you need for any business-related expense. This ease of use extends to online transactions, where you can simply enter the virtual card details just like a regular credit card, without needing a physical credit card present.

Enhanced security

One of the most compelling reasons to embrace virtual credit cards is their enhanced security. Especially since credit card fraud and data breaches are on the rise, with global losses predicted to grow to almost $50 billion by 2030, according to a recent study

In contrast to traditional cards, virtual cards equip you with advanced security features that help limit your exposure, especially when making online purchases. Each virtual card number is unique, and you can set it for a specific transaction, amount, or vendor. Not to mention virtual cards can be rendered useless after a single use or custom expiration date. Meaning that even if the card details fall into the wrong hands, fraudsters won't be able to use the card for any other transaction. 

These security features significantly reduce the risk of credit card fraud and protect your business's main credit card account from any potential threats. 

Simplified spend and expense management

Spend management is a critical aspect of any business's financial health. Still, with the many transactions and expenses that can occur when running a business, this can quickly become a challenge. This task becomes even more difficult if you rely on a single corporate card or share a stack of physical credit cards across the business. 

Before you know it, you have myriad transactions to reconcile but not enough visibility to understand how dollars are being spent, and by whom — further complicating payment processes and reconciliation. Fortunately, simplifying expense and spend management with virtual cards becomes much easier. 

You can set specific spending limits per card, monitor usage in real time, and easily reconcile expenses with added visibility and detailed transaction reports. This ensures your team can easily adhere to the business budget, and your finance team can simplify the accounting process, eliminate the need for manual tracking, and reduce the risk of errors.

Reduce plastic waste 

If reducing plastic waste is a priority for your business, virtual cards offer a compelling alternative to conventional physical plastic credit cards. 

Since virtual cards exist solely in the digital realm, they can reduce the amount of plastic that ends up in landfills or oceans, causing harm to wildlife and natural ecosystems. Opting for virtual cards means your business can contribute to reducing plastic waste, thus playing a role in preserving our environment. 

How businesses can use a virtual credit card 

Navigating the ever-evolving financial landscape requires versatile and intuitive tools, and virtual cards stand out as a powerful one to add to your business’s financial toolkit. Their digital nature and customizable features make them ideal for various business transactions and financial operations. 

But how exactly can your company harness the power of virtual cards? Let’s go over how to use virtual credit cards in your business.  

1. Tailored vendor payments

As a business owner, you deal with multiple vendors, each with their own payment terms and schedules. Sharing the same credit card with all your vendors can be problematic when controlling spending, reducing overages, or preventing unauthorized charges. 

Why not assign a virtual card per vendor? Doing so will not only increase accountability and avoid overspending, but it will streamline reconciliation since you can easily categorize transactions per service provider while ensuring timely and accurate payments without the need for further manual adjustments.

2. Project-based budgeting

When juggling multiple projects, it can be challenging to allocate and track budgets effectively. But with virtual cards, it's very doable. You can assign a unique virtual card to each project or employee to streamline expense management and ensure funds are used appropriately. 

What's more, with a platform like Extend, you can create budgets within the app, empowering your employees to generate virtual cards on your behalf within an approved and predetermined budget. This ensures you can delegate without halting the progress of critical business projects, especially when you’re enjoying some well-deserved time off. 

3. Employee empowerment

Instead of issuing and keeping track of multiple physical cards across the business, send your employees virtual cards for any business expense. Employees can use a virtual card online, in-app, or on the phone, and depending on the credit card issuer, they can even add it to their mobile wallet for contactless payments. 

This flexibility and convenience not only reduces the risk associated with lost or stolen cards but helps you keep tabs on payments via real-time expense tracking and built-in approval processes. This way, unapproved purchases can be a thing of the past, and you can better understand how dollars are utilized across the organization. 

4. Instant issue for ad-hoc needs

What happens if an employee needs to charge an immediate or unexpected expense? They likely have to wait for a physical card's approval, which can take time and delay operations. 

The great thing is that with virtual cards, you can instantly generate and send virtual cards whenever a team member needs to charge an expense. Not to mention, employees can also request a virtual card, which you can then quickly approve via an app, addressing urgent payment needs without delay and on the go. 

5. Subscription management

As a growing business, you likely rely on multiple software subscriptions for smooth operations. But what happens if your corporate card gets compromised or an employee leaves the company before canceling a subscription? Either operations will hit a snag, or you will continue getting charged for software you no longer use. 

One of the most significant advantages of using recurring virtual credit cards in your business is controlling subscription costs more efficiently, especially when personnel changes occur. While traditional corporate cards may leave you inadvertently paying for subscriptions, virtual cards make it easier to discontinue payments thanks to spending limits and custom expiration date capabilities. 

Set up your virtual cards to auto-renew monthly for each essential subscription, and enjoy the peace of mind that comes with knowing you're only paying for the services your business actually needs. If a card gets compromised, there's no need to make on-file changes with every provider or shut down your entire account, adding another layer of convenience and security.

The future of business transactions 

As we navigate deeper into the digital age, the trajectory of business transactions is unmistakably leaning toward innovation and enhanced security.

Virtual cards stand at the forefront of this evolution, offering convenience, efficiency, and more online security. 

Their ability to adapt to diverse business needs, from precise budgeting to safeguarding sensitive financial data, positions them as a pivotal tool in modern finance.

As businesses continue to seek streamlined and secure transaction methods, virtual cards will play an even more integral role in shaping the future landscape of business transactions. 

Is your business ready to go virtual?

The era of virtual cards is not just imminent; it's already here. If you’re ready to reap all the benefits virtual cards have to offer, now’s the perfect time to get started. 

Learn more about implementing virtual cards in your business, or if you have any questions about getting started, we’re here to help! 

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