As the world has shifted online, so have payment methods. One of the most innovative developments in recent years has been the rise of virtual payment cards.
Virtual payment cards are a growing trend in the market for digitising corporate payments. We’ll have a look at how this exciting tech works, and what it means for your business operation, especially if you’re running a small or medium-sized company.
What are virtual payment cards?
While reasonably new technology, virtual payment cards are taking off in a big way. They do exactly what their name suggests: these nifty online products act as debit or credit cards, but they’re entirely an online entity, with no physical card.
You receive a generated 16-digit card number, complete with an expiry date and card verification number. This information is linked back to your account, and then works the same way as a traditional payment card: you can use it to spend money online through your suppliers but without the constraints of having a physical card.
When to use virtual payment cards
In an online environment, you can use a virtual payment card practically anywhere you would use your physical credit card:
In a world where companies are increasingly using multiple software subscriptions, managing these payments can be a nightmare, especially if the physical card you are using to pay for these software subscriptions is lost or compromised. That’s where virtual payment cards can come in handy. You can usually create multiple virtual cards with ease, each with their unique number. What this means is that you improve security and reduce any overheads associated with losing card details. These virtual cards can usually be cancelled through an online portal at any time, so another easy way to manage and cancel any software subscription you don’t need anymore.
Single online purchases
What’s great about virtual payment cards is that you can create individual payment cards for one-off payments. Simply set the amount you need to pay, and then once the payment is made the card number becomes inactive, never to be used again. This makes them ideal for making large purchases, without the worry of having an extra payment card lying around or for giving to an employee to make a single purchase on your behalf.
Reducing work for your finance teams
You can assign cards to specific team members or departments, which allows you to keep track of your budget and spend. At the same time, these employees will be empowered to spend what they need to get their job down, without having to hunt down finance to get approval on expenses or ask for the details of that single corporate card.
Virtual payment cards even let you drill down to specific expense codes and departments, so when you make payments your information is translated immediately to your financial system. This eliminates the scramble of chasing down receipts or invoices, and streamline your reconciliations each month while maintaining an agile approach to business transactions.
Are virtual payment cards secure?
One of the big benefits of using a virtual payment card is the improved level of security you enjoy. SMEs are especially vulnerable to security risks, with cyber incidents costing them $29bn every year, according to a study by the ACSC and PM&C. Adopting the most advanced technologies is generally considered an effective way to minimise cyber risks.
With all those benefits, we expect to see this new technology be adopted by more businesses in Australia.
Neil Luo, Head of Growth, Airwallex