Virtual cards can be a lifesaver when it comes to business travel, now that checks and cash have become inefficient. Over time, they were replaced by more convenient digital payment methods, which offer numerous advantages for both businesses and employees who travel for work. Enter virtual cards – an exciting step toward smart corporate spending.
What are virtual cards?
A virtual card is a digital copy of your physical card that's stored on your phone. For businesses in particular, virtual cards can also exist without a physical one. They can be used for contactless payment in stores or for online transactions. A virtual card has all the details and identification info of a physical credit or debit card, including:
- Cardholder’s name
- Card number
- Billing address
- CVV
- Expiration date
The difference is that virtual credit cards provide online retailers with dynamic information – every time you pay with one, the verification code is different. The 16 digits are created to pay a predetermined amount for a single transaction.
Types of virtual cards
There are two types of virtual cards for business travel:
- Virtual credit cards: A corporate virtual card is like a regular card. Your management platform will add a credit amount to your card, which will be your balance. When money is added to an account, it’s possible to create a virtual credit card, assign budgets, make payments, and pay the amount spent at the end of the payment period.
- Virtual debit cards: Virtual debit cards are similar to ATM cards but can be used for business as well. With virtual debit cards, your company can load a specific amount to a business bank account, which is reflected in the card balance. Business travelers can pay with the company’s money using virtual debit cards, eliminating the need for reimbursement.
How virtual cards affect business travel
The travel sector has been using virtual cards for over 20 years. This payment method became indispensable for business travel because of its accessibility, ease of issuance, and high level of transparency.
5 benefits of virtual cards for business travel
A virtual credit card program has plenty of benefits for your company. Here are five of them:
1. Improved cost tracking
By removing the traditional card from the equation, business travel expenses are automatically tracked and every trip’s total cost is kept in one place.
2. Fraud prevention
With no more lost cards or hacked accounts, the chances of fraud will drop. You can freeze, cancel, or delete virtual credit cards instantly if there’s ever a security breach.
3. Real-time visibility of payments and transaction activity
With virtual cards, you get the info you need when you need it. Cardholders can view the card balance and transaction details to keep track of their spending. Both travel managers and travelers are notified of declined, canceled, or suspended cards, as well as of spending limits. This enables business travelers to have higher accountability.
4. Simplified expense management
Business travel managers can collect your company’s payment information and track payments across remote teams. This allows for controlled and secure corporate spending, with no need for reimbursement or cash advances.
5. Improved spending control
With virtual cards, you can set up cards for each expense and designated budget. You can set limits that don’t allow spending beyond the assigned budget, with notifications updating you of balance changes.
What can virtual cards be used for during business travel?
Virtual credit cards can optimize many aspects of business trips:
1. Transportation
Traveling employees can use virtual cards for taxis, Uber, or other rideshare services. Cards can also be loaded with per-diem amounts to cover any online or in-app purchases.
2. Streamline the accounts payable process
Virtual payment cards are an effective replacement for inconvenient paper and labor-intensive tasks. With virtual cards, the accounts payable team can focus on financial planning and other responsibilities.
This saves time and decreases human error while streamlining the entire accounts payable process.
3. Hotel booking and payments
Just like with transportation, it's more convenient to pay with a virtual card than with a physical one. Also, accommodations are likely to cost more than ride sharing, so virtual cards can protect you from fraud and financial threats.
4. Food and drink expenses
With a virtual card, business travelers can easily use contactless payment for any business expenses directly from the company balance, all while keeping track of their budget. This way, corporate travelers can stay within budget and not pay out of pocket during their trips, since the card can be loaded by the company.
Duty of care and virtual cards
In terms of improving the safety and security of business travelers, virtual credit and debit cards are highly beneficial. They offer streamlined, contactless payment for things like hotel check-in, which can otherwise involve a lot of human interaction.
Plus, these cards are safe and secure, limiting the risk of theft while on a work trip and managing duty of care for business travelers.
Virtual cards and invoicing business travel
Virtual cards from a secure and well-chosen provider offer total control since they can be integrated with your accounts payable automation system. The process for requesting, approving, and generating virtual credit cards is based on your unique business needs.
This is similar to invoice processing, but purchases are approved in advance. Virtual cards also capture transactions automatically since they can be synced with your enterprise resource planning system.
Virtual cards and vendor management
You can create virtual payment cards on your card management platform based on the number of vendors you have. This way, you see your company’s total number of vendors across all departments, as well as how much money is spent on them.
This visibility of accounts payable is also useful for expense analytics and insights.
Considering all these factors, virtual cards are more beneficial than physical ones for corporate travel management. When it comes to collaboration with partners or vendors during business travel, timely payments are another guaranteed feature.
Large and small businesses can benefit from increased security and efficiency that comes with providing business travelers with virtual cards.
Business travelers also benefit from the convenience of virtual, contactless payments that are timely and secure.
