How Virtual Cards Prevent Fraud and Abuse

how virtual cards prevent fraud and abuse

Businesspeople, and finance professionals in particular, love to talk about the bottom line – how much money is the business making, or in the worst case, losing. It’s a critical question that drives nearly every action we take in our professional lives.

One element of that question is preventing fraud, abuse, and theft. Whether that’s fraud on the businesses corporate card or theft of physical property, every business needs to make sure it’s not losing money to malignant actors.

In the past, with the widespread adoption of corporate credit cards came a parallel increase in fraud risk that these cards created. This has been a significant challenge for businesses as corporate cards have, for the most part, helped businesses make the payments they need to support their business.

However, in the last few years, a new payment method has emerged that can help significantly reduce the risk of fraud and abuse – virtual cards. Below, we’ll take a closer look at how this new solution can help businesses mitigate the risk of fraud.

Card Fraud, Theft and Abuse

At first glance, it seems like the risk of fraud and abuse are the same. But there is an important distinction between the two and virtual cards can help reduce both risks.

Fraud and theft

This includes anytime someone outside of the business or organization obtains payment information or is somehow able to impersonate a legitimate card holder. This is a straightforward security risk and should be thought of in that manner.


This is a bit trickier, because abuse can come from within an organization. For instance, if an employee who has access to a card goes off on a personal shopping spree, that’s a case of abuse rather than fraud.

This might seem like a minor difference, but it’s important to understand the risks because virtual cards help in both cases in different ways.

Security Challenges of Standard Company Credit Cards

Traditional corporate credit cards have long been favored by businesses because they are easy to obtain and everyone knows how to use them. But they are no longer the most secure choice. In fact, shared corporate cards open the doors to cyber threats and fraud.

Because credit cards are so easy to use, they are also easy to abuse. Finance managers have little visibility into how much is being spent and on what until the end of the month. This means that employees can overspend or make unauthorized purchases for weeks before anyone finds out. Even then, the finance department must comb through each line of a credit card statement in order to uncover any wrongdoing. This leaves the company open to credit card fraud and overspending.

Furthermore, the physical nature of credit cards as payment means that they can be easily lost, stolen, or misplaced. And while spending can be suspended with a quick phone call (once the card is noticed missing), it can cause delays in payments and leave employees temporarily unable to make purchases. If the card has to be replaced and the number and expiration date changes, all pre-approved charges and subscription payments must be updated, which can be time-consuming and frustrating.

What are virtual cards, exactly?

There are two types of payment methods that have earned the title “virtual” and while their names are quite similar, their functionality has some key differences so it’s important to set them apart.

Virtual card numbers are one-time numbers you can create and link to an existing credit card account for a specific payment. Think of them like single-use tokens.

Virtual cards, on the other hand, are payment cards that exist entirely online. They are like any other physical payment or credit card, with a unique number, expiration date, and CVV, they just exist solely as information in a system and their users never receive a physical card.

Digital security vs. physical security

The first way that virtual cards help prevent fraud and abuse lies in the fact that they are entirely digital. They only exist online, so there is no physical card that can be stolen, or have its number copied. That also limits exposure to credit card skimmers and other devices that might be used to steal the payment details. 

Since they are entirely virtual, payment details are generally stored in online platforms that can be secured with modern technology: encryption, rigorous passwords, two-factor authentication, etc. While no system can provide 100% safety, they are well tested and provide a high level of security that doesn’t always exist for a physical card.

Additionally, they can help prevent abuse within a business since there isn’t a physical card that can simply be passed around amongst employees when they need to make a payment.

However, physical cards are still convenient to use. That convenience is one of the reasons Mesh has developed Plug & Pay cards. These are numberless physical cards that can be linked to virtual cards. It gives users the best of both worlds.

Security Benefits of Virtual Cards

More control

Because virtual cards are digital first, that means they are usually integrated into online platforms where users can control them or tailor them to their specific use case. With these digital controls comes the ability to cancel or suspend cards, set specific limits, and more.

With a physical corporate card, businesses are generally confined to more old fashioned controls or limits put in place by the card issuer.

At Mesh, we also provide users the ability to lock virtual cards to specific vendors. So even if the payment details are somehow obtained, they can’t be used to make payments to other businesses.

Greater visibility

Virtual cards, by nature of their integration with online platforms, provide a higher level of visibility into the payments you make with them. This makes it easier to flag fraudulent payments.

Of course, most card providers include some level of fraud prevention along with their service. But, being able to see all of the expenses your company paid for in one platform gives finance teams the ability to monitor payments on their own and not simply trust in a 3rd party securing their payments.

Preventing fraud is just one aspect of the benefits virtual cards provide. Beyond that, when virtual payment cards are included as part of a more robust spend management platform, it can dramatically improve the way your business tracks and handles critical expenses.

How to Cut Overspending and Streamline Expenses

Use Virtual Cards

Using virtual credit cards instead of physical ones is also a great way to reduce overspending. Providers like Mesh create customized e-credit cards with personalized limits and spending rules. Businesses can also create one-time cards to pay for approved expenses.

Mesh virtual credit cards give you real-time visibility into employee expenses as they happen. You don’t have to wait till the end of the month to get your expense report. Businesses can be notified of suspicious expenses instantly and take action right away.

You can also view vital information like cardholder and approver details, receipts or invoices, and more. Organizations can ensure each expense is accurate and on-budget without hours of review.

Set Up Purchase Approvals

Businesses can bring down expense violations and stay on budget by requesting purchase approvals before all transactions. If an employee wants to spend, they will need to first get approval from a manager or supervisor.

Virtual credit cards enable employees to seek instant approval. The purchase will show up on the manager’s mobile or desktop for instant approval or denial. You don’t have to submit a paper request or wait for days for the manager’s approval or try to track them down over the phone or email.

Employees are less likely to violate rules when they know every expense is visible to their manager.

Analyze Expenses

Analyzing your credit card expense report is key to understanding spending behaviors. With Mesh, you get end-to-end payment intelligence to generate valuable insights about your expenses. Best of all, Mesh automates the whole process and provides you ready insights to take action.

Apart from fraud, payment intelligence works well to track spending patterns, suspicious transactions, and duplicate expenses. You can zoom in on every expense and strengthen your understanding of how your employees are spending — and ensure that your company is not overspending.

Businesses should also issue an expense policy to reduce spending violations.

Get a Spend Management Tool

Technology is an excellent way to reduce effort, increase accuracy, and boost productivity. It can also help you streamline your credit card expense report and kill overspending before it occurs.

A spend management solution acts as the central platform to manage all expenses. You can keep track of unlimited virtual cards and expenses for all employees in real time.

One way a spend management tool like Mesh can reduce fraud is by automating receipt collection. Businesses can match all receipts with payments to identify any gaps. The tool automatically collects electronic receipts and will remind your employees to submit receipts until they complete the task.

Managers can get instant notifications when a receipt is added with complete transaction information. As a result, they can detect unapproved purchases immediately and spot discrepancies when receipts don’t match transactions.


What is the bottom line in business, and why is it important?

The bottom line in business refers to the company’s net income or profit after all expenses have been deducted. It is essential because it indicates the financial health and profitability of the business.

How can businesses prevent fraud, abuse, and theft?

Businesses can prevent fraud, abuse, and theft by implementing robust security measures, monitoring transactions regularly, setting spending limits, and using secure payment methods like virtual cards.

What are the security challenges of using standard corporate credit cards?

Traditional corporate credit cards pose security challenges, such as increased fraud risk, lack of visibility into spending until the end of the month, and the potential for physical cards to be lost or stolen.

What are virtual cards, and how can they help reduce fraud and abuse?

Virtual cards are payment cards that exist entirely online and have unique numbers, expiration dates, and CVVs. They help reduce fraud and abuse by eliminating physical cards that can be stolen or copied and by offering greater control and visibility over payments.

What are the security benefits of using virtual cards for business expenses?

Virtual cards offer more control over spending, the ability to set specific limits and cancel or suspend cards, and greater visibility into payments made. They also reduce the risk of fraud and provide real-time insights into employee expenses.

How can businesses cut overspending and streamline expenses using virtual cards?

By using virtual credit cards, businesses can set personalized limits and spending rules, request purchase approvals before transactions, and analyze expenses to understand spending behaviors and identify areas for improvement.

How can a spend management tool like Mesh help reduce fraud and improve financial management?

A spend management tool like Mesh can automate receipt collection, match receipts with payments, provide real-time insights into expenses, and centralize all expense management in one platform, making it easier to detect and prevent fraud and overspending.

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