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.

However, it’s important to understand what the risk is and exactly what virtual cards are.

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.

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 cards 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.

While both are helpful in preventing fraud, this post focuses on virtual cards.

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 its Plug & Pay cards. These are numberless physical cards that can be linked to virtual cards. It gives users the best of both worlds.

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.

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