What is a Virtual Card and Its Business Benefits

The financial landscape is evolving, with virtual cards for business emerging as a game-changer for secure online transactions. Their intangible nature may seem like a disadvantage at first, but in fact these cards are all about ease and security, and have versatile use. In this article, we'll take a deeper look into what a virtual card is, and how small startups and large enterprises alike are driving value from this innovation.

What is a Virtual Card?

Virtual cards are the same as your credit and debit cards, except they aren’t issued as physical cards, they’re only stored on your electronic devices. Equipped with their own set of card details, virtual cards have a unique card number, expiry date, and security number, so your physical card details are kept hidden from merchants.

By acting as a digital medium between physical credit cards and chosen digital applications, such as an online store, virtual debit cards enable shoppers to easily make purchases online or in-store without having to carry a physical card.

How do Virtual Cards work?

Virtual cards work just like traditional physical cards except they are limited to online payments. Your bank or payment platform of choice will provide you with the same set of details you would usually expect: a 16-digit card number, expiry date and CVV code, just without plastic. You can use them for online purchases or, in some cases, also link with your digital wallet for contactless in-store payments via smartphone.

Virtual Cards vs. Physical Cards – Do I need both?

While a virtual card exists to do the same job as a physical card with an added layer of security, there are some differences between the two.

The most notable difference between the two is their design; a virtual card only exists digitally, whereas a physical debit card is, quite obviously, physical. Although this may seem like a simple difference, it is this fundamental difference that makes these cards more secure. Virtual debit cards cannot be stolen or lost in wallets, and if someone gets hold of a user’s card details, they can freeze the card and generate a new one, with a new card number, in seconds.

Additionally, merchants cannot obtain your financial data via a virtual card, so you are not at risk if they get hacked or try to steal your details.

Despite the listed benefits of virtual cards, it is still recommended for users to keep hold of their physical cards for now for some types of transactions. For example, many hotels require customers to verify their booking with their payment card on arrival.

7 key benefits of Virtual Cards for businesses

Convenience

It’s no secret – virtual business cards are super easy to use. With enhanced digital compatibility, employees can make online payments quickly and securely, giving them more time to focus on what matters.

Low Cost

Skip the issuance and delivery fees with virtual cards for your business. Virtual cards can be created to suit any sized business operation at a fraction of the cost.

Employee Spending Managed

Set limits and keep track of how funds are spent with virtual cards for your business and employees. This ensures company funds are spent as intended, and your main accounts are never put at risk.

Vendor Payments Control

Virtual business cards can be set up with specific budgets and vendors in mind. If you’re overcharged, any relevant cards can quickly be cancelled without having to update your payment info for other vendors.

Eco-friendly Solution

Virtual cards are completely digital, so your business’s carbon footprint isn’t affected like it would be every time a physical card gets lost or expires.

Quick Setup

Most virtual cards can be issued with just a few clicks or tap in your banking platform. You can do it right before making a purchase and block it just as quickly if required.

Multiple Cards

Virtual card providers usually allow you to keep multiple or even unlimited virtual cards. This way, you can easily assign separate cards to different employees, departments, or even use them to pay different vendors, making reconciliation a much easier process.

Are Virtual Cards safe?

Yes, virtual cards are very safe. They cannot be lost or stolen, and if the card details have been compromised, they can be easily blocked and reissued. This way, you can even use a separate card every time you make a purchase from a new provider.

If the virtual payment card is prepaid it becomes even safer. To use such a card, you first need to top it up with the desired sum. This way, even if some unauthorised withdrawal appears, your main bank account is never at risk.

How to use a Virtual Card?

To better understand how to utilise virtual corporate cards, let’s take a look at some popular examples of how they can be used.

Team Budget Management

Virtual cards and their card numbers can easily be created and assigned to team members to use for their business spending. This virtual card capability enables individual employee spending to be tracked and monitored amongst the total team budget – spending limits are available to automate this process.

Supplier Settlement

Assign virtual cards to individuals or groups of suppliers to efficiently track payments. Protect your business and its bank accounts should a supplier become compromised.

Business Travel

Book flights, overnight stays, and all business-related travel with a virtual card. Quick and secure booking of necessary expenses within the card’s spending limits alleviates the stress from the booking process.

How do I get a Virtual Card?

Now we’ve explored the multitude of benefits that virtual cards can offer your business, the only question left is how to get started.

Nearly half of US & CA businesses utilise virtual cards for business, with major firms such as Uber and Shopify included in these use cases.

Apply for an online business account with MultiPass and create both virtual and physical cards for your business today. (Payment cards are available for businesses registered in the United Kingdom, Ireland, Hungary, Czech Republic, Cyprus, Malta, Latvia and Estonia.)

Not ready to apply? Learn more about cards at MultiPass.

FAQs

Can you transfer money from a virtual card?

Yes. You can transfer money from a virtual card to a bank account by linking the card to a chosen e-wallet, such as Paypal or MultiPass, and making a transfer.

Can I use a virtual debit card at an ATM?

No, virtual cards can only be used for digital transactions. To withdraw money at an ATM, a physical card is required.

Do virtual business cards have a CVV?

Yes. Each card has its own randomly generated set of card details, including a card number, expiry date, and CVV. These details can be used for making online transactions securely.

How can I get money off a virtual card?

Virtual cards cannot be used to withdraw money at an ATM – they can only be used digitally. To get money off your card, initiate a transfer back to your linked bank account or in some cases, a different e-wallet.

Depending on your virtual provider, you might be able to connect your it to Google Pay or Apple Pay and withdraw money from a contactless ATM, but this is still rare.