How to Choose the Best Virtual Credit Card for Your Business

How to Choose the Best Virtual Credit Card for Business

Virtual credit cards can be an excellent way to control company spending.

Many businesses are shifting to virtual forms of payments to enjoy better accountability and transparency. Entrepreneurs can choose from several virtual cards available in the market with varying features. But how do you ensure you choose the best virtual credit card for your business?

What is a virtual credit card for business, and how do they work?

A virtual card is essentially the same as its plastic counterpart, without the plastic. Virtual cards usually act as prepaid debit cards. The user loads a selected amount from their balance to be transferred directly onto the card. 

As soon as you click the generate button, a card will be created with a random 16-digit card number, CVV/CVC2 code, and an expiry date that is selected by the cardholder. 

After the user designs and creates the card for their specific needs, the virtual card is immediately available for online purchases, phone orders, and subscriptions.

Benefits of virtual cards for your business

The short answer is: getting full visibility and control over your payments, preventing fraud and boosting security.

First, virtual cards have the option of being single-use. Once the transaction is concluded the card will expire, and become unable to make subsequent purchases. 

Second, the randomly generated card number and limited information displayed on the card eliminates the possibility of storing card details to be used for future payments. 

Third, a virtual credit card can be canceled with the click of a button. Unlike physical cards, virtual credit cards do not display the account number and are not connected to a bank account. As a result, a card can be canceled or suspended without the need to suspend the whole account — which can be an expensive and time-consuming operation.

Additional benefits include:

Keeping track of your expenses

In large companies, it is difficult to keep track of spending. With multiple business cards passing from employee to employee it can become unclear as to the purpose of each transaction, and who made it. Many businesses have to employ teams to check and approve purchases. This can be time-costly and an expensive process. 

The beauty of virtual cards is that each card is generated for a specific transaction. In a sense, you are logging the expense before the transaction instead of chasing up on the purchase after it occurs. Cards can be generated and shared with employees on a when and needed basis. Not only does this reduce the chances of fraud, it paints a clear picture of how much, where, and who made a purchase. 

Easy to navigate internal controls 

Virtual credit cards for businesses provide flexible controls on a wide range of features. The account holder can easily select:

  • Amount per period: cards can be limited to a set amount within a specific period (great for subscriptions!).
  • Multi-use or One-time use: users can choose whether you would like the card to be for one-time use, or for multiple transactions.
  • Suspend or cancel a card at any time: The card can be suspended and reactivated when needed so that businesses don’t need to be afraid from unauthorized charges.
  • Authorizations: via multi-level authentication and hashed keys cards will be securely generated to the account owner.

Drawbacks of traditional corporate credit cards

The traditional plastic credit card is vulnerable to fraud, both from employees and scammers. Business cards not only show the information needed to make online and offline purchases but also display sensitive information such as the account number. An employee can use business cards for personal expenditure in numerous ways. As the card can be passed from one employee to the next around the office, it is very difficult to have complete oversight of the cards. Employees can use the card, or store the details of the card, for personal transactions that cost businesses thousands of dollars each year       

Additionally, the majority of business credit cards were not built with businesses in mind. They’re essentially personal credit cards that are used by businesses. As we mentioned before, this leaves the cards open to fraudsters and scammers, who can exploit the information exposed on the card. As most business cards are linked to one central bank account, a misplaced or stolen card may put the entire account at risk before noticing the card is missing or being abused. 

How to choose the best virtual card

Businesses need to keep an eye for a few card-specific features and functions to ensure they get the best card. First, determine your needs so you can select the right virtual payment option for your business. Then you can compare features to find the best fit for your company.

Some features to consider include:

Ability to Issue Unlimited Cards

Your virtual credit card should meet the growing needs of your business. You should be able to issue as many cards for as many employees or payments as you want. Along with that, look for a card that lets you issue unlimited cards for free.

Otherwise, your expenses can add up over time.

Spending Controls

Virtual cards should come with robust controls to manage your budget. You should be able to set spending limits or vendor locks to prevent fraud and overspending.

In addition, the best virtual credit card should also let you:

  • Set card behaviors like one or two-time use
  • Delete or freeze cards and accounts
  • Define expiry dates

Always choose a card that lets you stay within your budget with the least effort.

Real-Time Spending Visibility

According to a PwC survey, businesses lost $42 billion in 2020 due to fraud. One of the biggest causes for this is poor visibility into company expenses and lack of accountability.

A good virtual credit card can help you overcome fraud with real-time spending visibility. You get an instant notification every time an employee uses their card to make a payment or buy something. Along with that, you get additional i